Insurance Based Investments

Insurance-Based Investments PDF

If you have an investment portfolio you will be acutely aware of the market volatility of the past several months. There are widespread economic and geopolitical risks. We are in an era of certain uncertainty. But market volatility is nothing new, and it’s here to stay. But what if there was a ‘seat belt’ for the safety of your investments? Well, there just may be… a particular type of investment I will refer to herein as “Insurance-Based Investment” (“IBI”). Just to be clear – IBIs do not involve life insurance in a traditional sense and there are no medical requirements.

What Are IBIs?

IBIs are a professionally managed pool of funds similar to mutual funds but combined with an insurance contract. IBIs can keep you invested in the market for higher potential investment returns BUT with a unique layer of protection for your money. Therefore, they may also appeal to conservative investors in cash equivalents and GICs. They are available for money earmarked for your use or to be passed on as an inheritance and are also available for corporate investors.

How Is Protection Achieved?

There are guarantees within the contracts for recouping amounts invested. If the value of the investment increases, investment gains are reaped as usual. But, if there is a loss on the investment at i) the investment maturity date or ii) at time of death of the contract holder, the guarantee will reduce or eliminate the loss.

Also, resets are offered on certain contracts. Resets, at prescribed intervals, enable an investor to lock-in increases in the value of the investment by increasing the maturity and death benefit guarantee amounts to include investment growth too.

Therefore, the contract holder, or beneficiary if the contract holder passes away, can recoup higher amounts. Many investors place greater value on the death benefit guarantee than on the maturity guarantee. The death benefit guarantee can be especially important to older investors or individuals with a serious health condition at a greater risk of passing away sooner after the investment is made.


As with all investments, IBIs are not suitable for everyone. But, they can preserve and enhance wealth as part of an overall investment portfolio. They have additional characteristics conducive to retirement and estate planning. IBIs are usually protected from creditors and exempt from probate fees.

Please reach out if you would like to explore IBIs, one of the core offerings in our practice.

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