Basics of Safe Money

What is a safe money account?

In the simplest terms, a safe money account is a place to put your money that has no market risk, similar to a bank CD. A safe money account is a type of savings place that is with an insurance company.It is a place where your money will never go down in value because of a stock market decline, and safe money accounts have no fees. These safe money accounts are also principal protected, meaning you’ll have a guarantee that your principal will never go down in value. That’s what I call “principal protected.”  You’ll be issued an actual contract or policy that will spell out all of the guarantees that you’ll be receiving from the insurance company. In my opinion, the life insurance industry is the most stable industry in the country. It survived the Great Depression when large numbers of banks were failing. It has also survived the recent market meltdowns we have had in 2000 and 2008. Life insurance companies are the ones that have these safe money accounts where you can put money you don’t want to lose. Life insurance companies have life insurance, health insurance, disability insurance, but they also have safe money accounts. These safe money accounts are primarily called fixed annuities. There are 2 basic types of annuities, a deferred annuity and an immediate annuity. We will cover the benefits of both later on.