Life Insurance for Real Estate investment

[Xavier A. Malave]

Hello,

I’m currently putting $20,500 every year towards my Roth Tsp Account (401k). I was wondering if should put that money into a Life Insurance account so I can them use that money to invest it now, instead of having that money sitting there for 25 years. l have done some research but I’m not sure if is a good idea. I love the idea of using the money now and make it double or triple instead of leaving it for years. 

Anyone who’s using life insurance for real estate investment? Any tips?

I’ll love some tips or get some knowledge from someone who’s doing it right now or have some knowledge in that.

Thanks! 

[Thomas Rutkowski]

Quote from @Dmitriy Fomichenko:

@Xavier A. Malave,

You don't have to wait 25 years to invest your 401k funds, you can do that now. But if you wish to invest your retirement funds into real estate you will need a self-directed IRA or 401k.

Using life insurance for investments is a bad idea. There are several problems with it. First, you have to pay commissions and fees so immediately you have negative return. Then there is an actual insurance cost, which goes up every year (if you need life insurance consider term which is fixed for 20 or 30 years). Finally, whatever is left over goes into "savings" bucket, BUT you can't use those funds to invest in real estate, you would have to take a loan against your policy and pay interest to the insurance company to borrow your own money! Does this make any sense? 

Many insurance salespeople will jump to promote this idea but it is your money, do your research and don't be mislead! 

 Do you work for free? There are commissions to buy real estate, investments, get mortgages. Its a fact of life.

If all you can say is "Don't buy it because it has a commission", then you clearly don't understand the business model.

And it's important to realize that despite the fees, the Life Insurance Double Play absolutely works. In a properly-designed, maximum over-funded policy, ~85% of the premium goes to the cash value. That 85% can be leveraged AND still keeps earning dividends. Putting your money to work in two places at one time will result in greater wealth accumulation over time.