Aftershock: Protect Yourself and Profit In The Next Global Financial Meltdown, Second Edition

How Will Other Investment Vehicles, Such as Life Insurance, Annuities, and Collectibles Perform?

Life Insurance and Annuities

As we already mentioned in Chapter 6, term life insurance is fine; whole life insurance is not. Whole life or even hybrid life insurance (combination of term and whole) will do poorly simply because much of the money is often invested in bonds and mortgages, some real estate, and a bit in stocks—all of which will do poorly during the Aftershock. So many whole life insurance companies will go bankrupt. And even government-insured policies will not be protected because in this case the government will not be able to cover these.

Term life insurance is fine since it is not really an investment. However, keep in mind that with very high inflation, the value of the payoff amount will be greatly reduced. On the other hand, the real cost of the annual premium payments will also be reduced by inflation. Also keep in mind that once the bubbles burst, quite a few life insurance companies may go under and not be able to pay their claims. So once the value of the dollar begins to fall, keep a close eye on the health of your insurance company and increase your term life insurance to keep pace with inflation.

Annuities take your premiums in lump sum payments and invest the money in the same investment vehicles as whole life insurance companies do (bonds, real estate) and then they pay you over the course of your life based on their returns. But if those investments are ...