Fraternity-Testvériség, 1959 (37. évfolyam, 1-12. szám)

1959-12-01 / 12. szám

FRATERNITY

5

IS LIFE INSURANCE AN INVESTMENT?

An argument over whether or not life insurance is an investment is largely an argument over semantics. You can define the word, “investment”, either to include or exclude life insurance. We'll venture to state that as the average person thinks of an “investment”, life insurance is NOT one. However, zee’ll also venture to state that the average person has no business monkeying with zehat he usually thinks of as “investments”. For the average person — no, for the MAJORITY of people — life insurance is SUPERIOR to an investment.

The problem of the majority of people is not making investments but having cash zehen money emergencies arise. Investments are a poor way to be sure that money re ill be there when you need it — at least a poorer way than is life insurance.

Investments arc “IF” money. They’ll provide cash for emergencies IF they are selected with a great deal of luck; IF you can hang onto them in the face of a “bargain” in a new car, nezv house, nezo anything. Investments can total an estate for your family IF you live long enough.

Will you?

For the majority of people, the time to start fiddling with investments is after they have sufficient life insurance — and zehen zee say “sufficient”, zee aren’t thinking in terms of two or three or five years of income. We are thinking of income AS LONG AS A MAN’S FAMILY NEEDS IT AFTER HIS IS CUT OFF — and as long as he zvill need it in old age.

THE QUESTION OF MUTUAL FUNDS

A young acquaintance of ours recently told us he is putting $20 a month into a. mutual fund.

A mutual fund is a fine investment. Someday, when we have enough life insurance to guarantee the income we estimate our family would need, or zee will in old age, we’re going to buy mutual funds. (And by the way, our estimate of what income will be needed isn’t based on how much it costs to live today but on hoze much it will probably cost IN THE FUTURE.)

Someday, like our young friend, zee are going to buy mutual funds; but zee wonder about his doing it today. At his present age, $20 a month woidd buy $10,000 of Ordinary life insurance in a typical company. That would mean that he would have an estate of $10,000 for his family reith the payment of the first $20,