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  • Walt Wilson

What is the ideal financial instrument?


Ideal financial instrument can be many items such as checking and savings accounts, bonds and annuities, 401k’s, IRA's, Roth IRA's, real estate and trusts.

What are the characteristics you would like in your ideal financial instrument?

The following are characteristics that I feel are essential for an ideal financial instrument:

1. The ability to access your cash anytime for any reason without having to qualify for it without incurring any penalties. Example would be checking and savings accounts.

2. The ability to generate a guaranteed positive rate of return. Example would be bonds or certain annuities.

3. The ability to access growth on your money without having to pay taxes on the increase. Example like a Roth IRA.

4. The ability to use your money as collateral to secure a loan. Example like you can with real estate or other property.

5. The ability to protect your money for creditors and judgments. Example like you can with 401(k)’s and IRA’s.

6. The ability to bypass the probate process by going directly to your beneficiaries without having to pay income tax or estate tax. Example, certain types of trusts.

7. The ability to leave a legacy to your heirs or loved ones in the event you pass before being able to reach your accumulation goals. Example life insurance.

8. The ability to continue to contribute to your account in the event that you become disabled and unable to work. Example like disability insurance.


Part of our purpose is to provide our clients Certainty

As you review this list of characteristics for the ideal financial instrument, what instrument would you choose that could do all of the above. I know of only one financial instrument that will do all of the above and that instrument is called a dividend paying whole life insurance. Dividend paying whole life insurance is one of the least understood types of insurance in the marketplace. In today's marketplace, term insurance is the primary choice of most individuals to safeguard their financial assets. The problem with term insurance is that it only provides one benefit which is a death benefit. Dividend paying whole life insurance is defined as a specific benefit, which is guaranteed and is not a benefit that is contingent upon an event that may or may not take place during a specified period of time. A properly structured dividend paying whole life insurance policy shares many of the favorable characteristics of the most popular financial instruments around. This gives you control and liquidity of your money.

Unlike most financial instruments, dividend paying whole life insurance policies:

1. Does not require you to qualify to get your money back like a mortgage would.

2. Does not penalize you for accessing your money before a certain age or require you to begin withdrawals or limit the amount of your contributions. Like a 401(k), IRA or Roth IRA.

3. Does not restrict where you can put your money, like most qualified plans.

4. Does not burden you with unknown future tax liabilities like 401(k)’s and IRA’s.

5. Does not subject your hard-earned money to real estate or stock market declines.

6. Does not require you to die before you can benefit from a policy like term insurance.

7. A properly structured dividend paying whole life insurance policy is the only vehicle where you can use your money for anything you want and still earn interest on it as though you hadn't even touched it!


What is the ideal financial instrument that would give you the flexibility or the ability to control your financial assets and reduce taxes on these assets? In my opinion, it’s called dividend paying whole life insurance.

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