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hfoste01 · Oct 5, 2007, 06:18 PM

I want to know if I can invest my money in other things rather than just the traditional stocks and bonds etc. Can I collect the dividends on the invested difference?

RichardBondMan · Oct 5, 2007, 06:26 PM

You mention "insurance" in the title but not in the question. Your question mentions the "difference" but the difference between what? Can you be more specific?

hfoste01 · Oct 6, 2007, 04:26 AM

Sorry, I have term insurance and I want to know how to invest the difference with my insurance. From my understanding, I can buy term and invest the difference. The difference can be invested in Stocks Mutal Funds and other things. I was wondering what else I could I invest in with the difference from the insurance. Also, can I collect the invested money from the difference that I've invested in?

ebaines · Oct 6, 2007, 11:54 AM

Please clarify what you mean by "the difference." Perhaps someone has told you that since term life insurance is less expensive than alternatives such as whole life or variable life, you could invest the money you save by switching from one of those policies to a term life policy -- is that what you're getting at?

ebaines · Oct 8, 2007, 09:19 AM

Follow up - through email the OP advised that he is interested in "Buy Term and Invest the Difference." This is basically a strategy of spending less on term life than you would on a typical whole life or universal life policy, and investing the difference on your own. There's a good discussion of this topic here:

Buy term and invest the difference - Wikipedia, the free encyclopedia

I believe this is a good strategy - in general I am not a fan of either whole life or variable life, as the fees they charge tend to be high and your choice of investments is limited. However, it does require discipline to make sure that you keep up with regular investments - no one's going to send you a quarterly bill, so it's easy to put off making additional investments on a regular basis. The investments also won't have the tax deferral advantages of an insurance policy, unless you are making the investments into an IRA, 529 savings account, or annuity. Since this is self-directed, you have a very wide range of investment options, and should be able to find investments such as mutual funds which have much lower fees than you would have been paying to the insurance company.

If you put the difference into a non tax-advantage account (such as a standard brokerage or mutual fund account) you can of course do with investment and its returns as you wish - it's your money.