Notes increasing US support for the BTID insurance strategy, i.e. buy low cost term life insurance and invest the difference between the cost of this and of whole life insurance. Points out some other investment possibilities and compares the terminal and interim wealth accumulation potential of five different insurance/saving combinations for both sexes at five ages, taking tax into account. Discusses ease of access to savings, taxation of death proceeds and restrictions on creditor rights to distribution for various types of insurance/savings and considers the implications. Draws some conclusions about the best investment performance but stresses that investment choice also depends on individual factors, e.g. tax bracket, risk, tolerance and investment knowledge.
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Carney et al. (1998) studied this question.