Most companies need to amortize the cost of acquisition because they incur costs over and above the actual cost of the death benefit. These include medical exams, records, clerical and underwriting expenses, and the compensation for the licensed agent. Agents don’t work for nothing, and generally, these costs are assessed or amortized over the first few years of the insurance policy.
For example, if you put in $100,000 and before you even had any credits, the accumulation value is $90,000, you might think, “Oh, wow, I didn’t make any money.” No, you don’t choose this as a short-term, get-rich-quick investment. You choose investments based on which ones will generate the most value at the time in life when you need the money the most, whether that’s 5, 10, 15, or 20 years down the road.
To learn more and see some examples, claim a free copy of my book, The LASER Fund. Click on the link below, contribute towards the shipping, and I’ll cover the rest. I’ll pay for the book.
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