Evaluating your financial strategy can often be a challenging endeavor—where do you even start? How do you know if you’re making the most of your finances? Visiting with your financial professional is always a great place to start. Prior to that, here are a few questions you can ask yourself to determine if your money is working toward your financial strategy and goals.
How Accessible is My Money?
Tucking money away may seem smart—especially in today’s world when unexpected things happen all the time. But how can you make this money even smarter? Should the unexpected happen, you may want access to your funds to help support yourself and your loved ones. What types of restrictions or limits does your account have? During times of emergency, would these restrictions make it hard to access the money you may need? Some life insurance policies offer living benefits, like access to the death benefit, while you’re living to help cover the costs of a qualifying illness. Consider an option that provides the flexibility you need, and one that may offer other benefits that you’re able to use.
Is My Money “Working Hard” Enough?
According to the FDIC, the average interest rate for a savings account is 0.09%.1 While flexibility and accessibility are both important, something else to consider is what, if any, potential growth does your account offer. How can your savings potentially accrue more value while sitting in an account? Make your savings work for your financial strategy by considering options that offer higher interest rates or other features to help grow your funds. While life insurance isn’t the same as a savings account, indexed universal life insurance can offer the opportunity to grow cash value at potentially higher rates while remaining accessible through loans and withdrawals.
What Fees Am I Paying?
Tucking funds away should be an easy way to protect their value, right? It should be that simple, but in reality it isn’t. Make sure you’re aware of any fees you’re being charged in relation to your account. For example, some banks may charge consumers if their account dips below a certain balance or may charge an annual service fee. If you need to access your funds, flexibility when you need it is an important factor when deciding where to place your money.
Is My Money Being Leveraged Enough?
Should the unexpected happen, what funds will you leave behind for your beneficiaries and loved ones? In a savings account, your beneficiaries will receive the money as is with any interest accrued. Life insurance immediately leverages funds into a larger, generally tax-free death benefit, allowing you to leave more behind.
Whether you keep your money in an account at your local bank, a bond, or even a coffee can, it’s important to recognize how your funds are working toward your financial strategy. Keep your options in mind and determine what can set you up best for your future and the legacy you leave.
1.FDIC, https://www.fdic.gov/regulations/resources/rates/, Accessed February 13, 2020.
Indexed Universal Life Insurance products are not investments in the “market” or in the applicable index. They are subject to all policy fees and charges normally associated with universal life insurance.