Primerica Life Insurance Pushes Policyholders Toward Savings
Since 1977, Arthur Williams looked at financial planning differently than many others in the insurance industry and actually discouraged them from buying whole life insurance, a more expensive savings vehicle than term life insurance. His philosophy of buying term life and putting more money in a savings account is still part of the philosophy of Primerica Life Insurance, which has grown from his first, small insurance company. It is the company's theory of decreasing responsibility that makes this theory more understanding to many of their subscribers.
Primerica Life Insurance essentially sees the financial role of parents in a slightly different light. When they are young, they have no dependents and very few financial responsibilities. With the role of life insurance being to take care of surviving family and the few financial obligations, they are better off with a term policy from Primerica Life Insurance and an individual retirement account or some other savings vehicle.
As they grow older, get married, buy a house and have children, their financial obligations increases and the amount of insurance they will need will also increase to meet the family's financial needs in the event of their death. They can adjust the policy limits on their term policy from Primerica Life Insurance while still adding to their savings.
Obligations Diminish As Age Increases
In later years when the kids are out of the house, no longer dependents and the house is paid off, the financial obligations are lower, allowing even more of the income to be set aside in their savings plan, guided by the experts at Primerica Life Insurance, to enable them to enter retirement comfortably. Once passed the highest peak of obligations they can return to planning for their retirement.
The savings and any investments made during the first years should be enough to help maintain a lifestyle through retirement. Primerica Life Insurance also touts what they call the rule of 72 to determine how long and how much will need to be invested to insure having enough money for retirement. The rule quickly shows how it will take a person's savings to double at different interest rates.
For example, using Primerica Life Insurance's Rule of 72, a savings account earning three percent interest, will double the principal in 24 years. At six percent, it will take only 12 years to double in size. This gives folks a tool to determine if they need to look for higher interest rate accounts or increase the amount in their savings.
