The pandemic made a lot of people realize the value of securing their family’s financial needs, now and in the future. Life insurance and real estate top the most of the people’s lists.
You might have been putting off buying that life insurance for years or you might have been thinking about investing in that high-rise condo for quite some time. But if you are more focused on buying an asset and investing as a result of this situation, then, remember that there is never a bad time to make financial and investment plans.
For many, life insurance is a good consideration, in case of an accident or illness that takes us away from our loved ones. Life insurance allows those we left behind to collect the money they need to survive without our income.
You might probably have life insurance through your job or privately purchased but you may not know how important it is for your real estate investment needs.
If you are a real estate investor, you can use life insurance for your business, too. However, to make it more valuable, you have to understand what it is that you are buying into. If you are planning to invest in real estate and would like to explore life insurance in order to do so, here are some of the things that you need to know about life insurance and real estate investing.
Life Insurance as an Investment
Life insurance is a good investment for people who want to protect their loved ones financially even after they pass away. Like any other investments, you should be able to learn and understand the right type of insurance for your needs in order to come up with an informed decision. Depending on the type of life insurance that you invest on, you and your family can benefit from the safety blanket it offers.
Life Insurance Cost
The cost of a life insurance policy can vary greatly depending on the type of policy and other variables that can affect your life expectancy such as age, weight, health, gender, occupation, and lifestyle, among others.
Kinds of Life Insurance to Consider
Most people decide between the two basic types of life insurance which are the term and whole life insurance policies.
Term Life Insurance will cover you for a specific period of time, during which you pay premiums and receive a benefit should something happen, typically between 10 and 30 years. However, once the period expires, so does the coverage. The money you put into the policy does not come back to you.
On the other hand, Whole Life Insurance covers you from now until the last day of your life. It guarantees that your family will receive some amount of money when you pass on. Whole Life Insurance may seem to be the better investment, but it can be more expensive than the Term Life Insurance.
Compared to other investments, life insurance does not fluctuate in value. Your beneficiaries’ death benefit depends on how much premium you pay unlike other investments that are dependent on the current state of the market.
Life Insurance Investment Benefits
Life insurance can be a powerful tool for protecting your future as well as the financial confidence of the people who depend on you. Here are some benefits that you can get from your life insurance investment.
● Provide Peace of Mind and Financial Security - When you’re insured, you have some peace of mind knowing that should anything happen to you, your family still gets some form of financial security.
With other types of investments, it can be difficult for your family to have it liquidated into money that they can use for their financial needs.
● Pay Off Your Debts - If you have debts to pay, it will fall on your family’s shoulders to pay off those debts after you pass away. Life insurance helps them to have some financial capacity to pay your debt.
● Replace Lost Income – If you are the provider for your family’s living expenses, your unexpected death can make it difficult for your surviving family to find income. Your family can survive comfortably on the death benefit long enough to find another source of income.
● Provide Business Stability – Aside from your family, life insurance can also benefit your business partners. Should you pass away, your business partner can use the death benefit to pay for any business obligations.
● Borrow from Whole Life Insurance Policy - One specific insurance benefit that is often overlooked by investors in real estate is the ability to borrow from whole life policies.
You can borrow from the policy to help you make real estate investment deals that you might not have the capital to handle otherwise. With this, you get insurance and access to capital.
Real Estate Investing
Real estate investing pertains to the purchase of property as an investment to generate income rather than using it as a primary residence. You can invest
There are various options to consider to make money from real estate.
Property Value Appreciation: Usually, property value continues to increase even in the situation of inflation in the economy, therefore, investing in real estate is a smart decision.
Rental Income: Renting out your property, whether residential or commercial, is always a good idea for generating a passive income in the long run.
Commission: Property management companies, sales agents or brokers can make money in the form of commission by facilitating the exchange of property among the buyer and the seller.
Income from Ancillary Real Estate Investment: Aside from regular income from business or salary, one can develop a source of additional revenue such as installing a vending machine in the properties you are renting out.
Real Estate Investment Benefits
● Protection Against Inflation: Unlike other assets, real estate is not adversely affected by inflation. Instead, property value and income increase with the rising economy.
● Rent Pays Off: Residential and commercial properties are the only assets which have the capability of generating income through rentals to pay off the interest on their mortgage.
● Second Source of Stable Income: Real estate can be seen as the most significant source of generating passive income. The investors can rent out their property to earn a steady cash inflow.
● Tax Benefits: Real estate investors can enjoy tax exemptions on the rental income up to a specific limit.
● Own Decision Making: As a real estate investor, you are free to make your own decision. You are your own boss.
● Financial Security: As we know that putting money in real estate is a long term investment.
● Property Value Appreciation: Real estate investment is the purchase of property which encounters capital appreciation in the long run.
Life Insurance as a Good Option for Real Estate Investing
You are probably wondering what life insurance has to do with your investment portfolio. It turns out that there is one type of life insurance that covers you for the rest of your life and grows in cash value - the Universal Life Insurance.
As you make payments to your insurance company, Universal Life Insurance will allow you an unusual benefit with your plan - you can borrow money against the cash value the policy holds. As you put in more and more money toward your insurance, you can withdraw cash for your business. Most plans will also allow you to withdraw funds with a fixed return rate to avoid paying huge penalties.
Investors who also want a new line of credit can consider Universal Life Insurance as another way of getting it. It is a great option if you have explored all your other avenues but still have a high income with which you can continue investing.
With Universal Life Insurance, you can borrow from the policy to help you make real estate investment deals that you might not have the capital to handle otherwise. With this, you get insurance and access to capital.
Why Real Estate Investors Need Life Insurance
Most real estate investors have specific needs for life insurance other than the usual benefits that we know. Life insurance can provide the seed capital to not only keep the real estate business going but also to help it grow after you pass away.
If you have been Googling and searching for the advantages and disadvantages of using life insurance to invest in real estate, you have probably realized that there are not enough resources to refer to. But understanding the concept of “Double Play” will make you understand it better.
Double Play is a strategy wherein you put your money to work in two places at one time and leverage the cash value at a maximum overfunded cash life insurance policy.
If you leverage the cash value of a maximum overfunded life insurance policy to invest in real estate will help you achieve greater long term wealth accumulation compared to simply investing directly in real estate alone.
With this strategy, you can actually make more money by putting it to work in two places at one time. If you are a real estate investor putting your own money into deals then this approach will help you make more money to use for real estate investing.
Most people know the basics of Life Insurance, but they have not really put it all together to see the bigger picture.
● It’s no secret that permanent life insurance has cash value.
● Most people know that the cash value of permanent life insurance earns interest/dividends. They thought it was lower in value or took longer time to accumulate.
● Most people know that they can cash out their policy or avail loans.
Most people mistakenly think that you can borrow from the cash value of your life insurance policy. However, this is not the case. You borrow against your cash value, instead. Your cash value can still grow even when you borrow against it to invest in real estate. You literally have two assets working for you at the same time.
If you are looking for a real estate investment, condos can be attractive investment opportunities that you may want to explore.
Top property developer, Vista Residences offers condominiums that are of quality and good location.
Vista Residences is the condominium arm of the country’s largest homebuilder, Vista Land & Lifescapes, Inc., which offers ready for occupancy and pre-selling condominium projects in Manila and Quezon City that are strategically located within inner-city areas, in close proximity to premium universities and developed business districts.
At Vista Residences, unit owners can take advantage of the property’s centrality. The properties of Vista Residences are strategically located near the country’s premium universitiesand CBDs, making them an attractive investment for both local and foreign investors.
Vista Residences has ready for occupancy condo projects in Manila such as Vista Taft, Vista Heights, Vista GL Taft, 878 Espana, and Crown Tower University Belt. It also has pre selling projects in the said area which include Vista Recto, Plumeria Heights, Tennyson Heights, Bradbury Heights, Sky Arts Manila, and Kizuna Heights.
Meanwhile, its ready for occupancy projects in Quezon City include Wil Tower, the Symphony Towers, Pine Crest, and Vista 309 Katipunan. It also has pre selling condo projects in the said city such as Hawthorne Heights and Vista Pointe.
Living in Vista Residences enables you to enjoy convenience, where everything is pretty much within walking distance or a few minutes away from the property; comfort because the project features and amenities are designed to deliver comfort at all times, which makes condo living a worthy investment; security that is 24/7 and CCTV monitoring, which makes the residents safe and secure within the property.
In line with Vista Residences’ thrust to offer convenience among its residents, it also features an AllDay Convenience Store and Coffee Project in all its projects.
Vista Residences is part of Vista Land’s roster of condominium brands that cater to millennials and young professionals. The other vertical brands include Camella Manors, COHO, and Crown Asia.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.
