Alternatives to CDs

With today’s returns close to 0.5%, everybody knows that Certificates of Deposit are poor investments. To make a bad situation worse, you have to pay income tax on this paltry return. That’s why many people call certificates of deposit, “Certificates of Disappointment”. People keep money in C.D.’s for safety (up to $250,000) and liquidity but what if there was another way to have both safety and liquidity as well as bring far higher returns without ever receiving a 1099 on the inside build-up of the gains?

Here’s the alternative…convert your C.D. into a life policy that also provides the safety and liquidity that C.D.’s provide. The policy will far exceed the value of the C.D. with the cash values growing tax-deferred. Unlike C.D.’s, that means you will never receive a 1099 on the gains while they are growing within the policy.

The safety is provided by the strength of the life insurance carrier. Our carriers each have billions in assets and are all rated A  (or better) by A.M. Best. The liquidity is provided by the policy which allows the policy owner to withdraw money from the policy as needed with no restrictions or penalties on the use of the money whatsoever.

This option is not for everybody but is a superior option for those with money languishing in C.D.’s, especially for those of us who are older. With our inflation now what it is, your money has to work harder than ever to perform. The reality is that a C.D. is losing money for its investor if it is only earning roughly 0.5% and inflation is as high as it has been.

This option of converting a C.D. to a life policy generates far more income than a C.D. does and, while doing so, provides a tax-free windfall to one’s beneficiary. In fact, if a healthy 65 year-old female converted a $100,000 C.D. into a life policy, the death benefit would be roughly $218,000. At the same time, the cash value is growing far greater than a C.D. will grow. C.D.’s simply can’t achieve these multi-level advantages.

If you want to learn more about this alternative to poorly performing C.D.’s, contact me to let me know what you want to achieve with your money. As with all life policies, an application must be made for acceptance. Past and present medical history dictates acceptance.