The Living Jacket: Protection That Grows as You Do

When it comes to financial security, many of us think of an emergency fund as our “umbrella”—a fixed amount of savings set aside to protect us when things go wrong. But, like a real umbrella, an emergency fund has limits. It can keep us dry in the short term, but it doesn’t grow, expand, or adapt as our needs evolve. In a world where inflation erodes value and responsibilities grow over time, a fixed-size emergency fund is a static shield that risks becoming outdated.

Now imagine an alternative—a Living Jacket. This isn’t a static fund; it’s a protection that grows as you do. Like a well-designed whole life insurance policy, this “jacket” provides a safety net that strengthens over time, adapting to meet your needs as they expand. While a traditional savings account (the “umbrella”) remains stagnant, a Living Jacket policy, such as a 10-pay whole life insurance policy, grows in value each year, ensuring that you’re not only protected but also equipped to face the future with confidence.

Aligning with Our SECURED Beliefs

1. Seize Financial Control: With a Living Jacket, you aren’t just building a static emergency fund. You’re taking proactive control of your financial security, choosing a tool that grows with you and adapts as life changes. Just as Shelby the Tortoise confidently moves forward, this strategy empowers you to take charge of your future.
2. Embrace Mastery of Cash Flow: A Living Jacket helps you optimize cash flow by giving you flexible access to cash through policy loans when you need it most. It’s about knowing exactly where your money is going and making it work harder to support your financial goals.
3. Create a Financial Safety Net: Like Shelby’s sturdy shell, a Living Jacket is a source of protection. Unlike traditional savings that diminish with inflation, this “living” safety net expands, ensuring you are covered through all of life’s unexpected events and stages.
4. Understand Financial Choices: Choosing a Living Jacket over a traditional emergency fund reflects a deeper understanding of financial options. You know the difference between static and dynamic protection and can see the long-term benefits of uninterrupted compounding.
5. Reap the Benefits of Compound Growth: Just as Shelby the Tortoise makes steady progress, your Living Jacket builds wealth through the power of compound growth. Over time, your financial protection grows exponentially, providing increased value for you and your family.
6. Embrace Financial Flexibility: Life is unpredictable, and your financial strategy should reflect that flexibility. With the Living Jacket’s policy loans, you have access to cash without sacrificing the growth of your funds, allowing you to adapt as life changes without stress.
7. Develop Wealth and a Lasting Legacy:More than just a safety net, the Living Jacket is a foundation for generational wealth. This approach ensures that your financial strategy provides a legacy that supports loved ones for years to come, fulfilling the long-term vision of creating a lasting impact.

Understanding the Growth Protection Matrix

Consider the Growth Protection Matrix:

The umbrella represents a traditional emergency fund, which provides static protection. It starts at $50,000 in value and stays at $50,000, regardless of how much the cost of living or risk of emergencies may increase over time. The Living Jacket, however, represents a 10-pay whole life policy that grows in value each year. Starting with the same $50,000, it increases as time goes on, adding cash value and a death benefit, providing both growth and protection.

The Power of a Living Jacket: Growth with Protection

A traditional emergency fund is like an umbrella that stays the same size and strength regardless of the storm. Its value may even diminish over time due to inflation, leaving you less protected when you need it most. On the other hand, a Living Jacket, like a whole life policy, offers a growing level of protection, compounding in value and strength to provide greater security as your responsibilities increase.

Our assumptions:

• Inflation 2.5% and
• Average return on Savings account: 0% because Banks paid 0% for many years in the recent past.
• IRR (Internal Rate of Return) of the Whole Life is 4% and
• Inflation adjusted IRR is 1.4%.

The Growth Journey of $50,000 without adjustment for inflation

• Traditional Emergency Fund (The Umbrella):
  • Year 1: $50,000 in value
  • Year 10: $50,000 in value
  • Year 20: $50,000 in value
  • Year 30: $50,000 in value
• 10-Pay Whole Life (The Living Jacket):
  • Year 1: $50,000 cash value with a $250,000 death benefit
  • Year 10: $74,012 cash value with a growing death benefit
  • Year 20: $109,556 cash value with a growing death benefit
  • Year 30: $162,170 cash value with a growing death benefit

The Growth Journey of $50,000 with adjustment for inflation

• Traditional Emergency Fund (The Umbrella):
  • Year 1: $50,000 in value
  • Year 10: $38,816 in value
  • Year 20: $30,134 in value
  • Year 30: $23,394 in value
• 10-Pay Whole Life (The Living Jacket):
  • Year 1: $50,000 cash value with a $250,000 death benefit
  • Year 10: $57,458 cash value with a growing death benefit
  • Year 20: $66,028 cash value with a growing death benefit
  • Year 30: $75,877 cash value with a growing death benefit

The Living Jacket approach not only grows in cash value but also includes a death benefit that supports your family if something happens to you. It’s a dynamic form of protection that provides stability in life and legacy-building benefits beyond.

Case Study: Sarah’s Umbrella vs. Michael’s Living Jacket

To illustrate the difference between these two approaches, let’s look at the stories of Sarah and Michael.

Sarah started her financial journey with a traditional emergency fund. Right out of college, she set aside $5,000 as her “umbrella” to protect against unexpected expenses. As her career grew, she kept adding to this fund, increasing it to $20,000 when she got married, then to $50,000 when she started a family. Each time she needed more protection, Sarah saved more to keep pace with her growing responsibilities.

Her colleague, Michael, took a different approach. He started with a Living Jacket—a whole life insurance policy that he could contribute to over time. He saved the same $5,000 initially, but instead of maintaining a stagnant emergency fund, he chose a policy that would grow with him, adding value each year.

Fifteen years later, both Sarah and Michael faced family emergencies. Sarah’s emergency fund, although still at $50,000, had lost purchasing power due to inflation, and she found that it covered less than she had anticipated. Meanwhile, Michael’s Living Jacket had grown in cash value to twice the original amount, and he could access funds without reducing its future growth or his overall protection.

Sarah summed it up: “My umbrella only keeps the rain off, but Michael’s jacket grows with him, keeps him warm, and gets stronger every year.”

Why Choose a Living Jacket?

Protection That Grows with You

Traditional emergency funds are limited by inflation, leaving you with less purchasing power over time. The Living Jacket’s growing cash value adapts to your needs, providing financial security that grows in real terms.

More Than Just Savings

While an emergency fund simply “sits” in a bank account, a 10-pay whole life policy works actively. It builds cash value and adds a death benefit, providing both immediate and long-term benefits. Unlike the static nature of a bank account, the Living Jacket is a dynamic asset.

Flexibility in Accessing Funds

A Living Jacket allows you to access cash through policy loans without affecting the compounding growth. This flexibility ensures that you’re not forced to drain your savings when emergencies arise, allowing your wealth to continue growing uninterrupted.

Legacy Building

The Living Jacket isn’t only for emergencies. It also supports future goals, such as retirement and family security. The policy’s cash value can be accessed for major life events or left intact to grow, providing your loved ones with a substantial legacy.

Implementing the Living Jacket Strategy

If you’re ready to explore the benefits of a Living Jacket, here are a few steps to get started:

Assess Your Current Protection Needs

Take stock of your emergency savings and other protective measures. How well will they meet your future needs?

Choose the Right Policy Size and Premium Schedule

A 10-pay whole life policy is ideal for creating a Living Jacket that grows in value over a decade of contributions. Work with a financial professional to choose the size and premium schedule that fits your goals.

Monitor Your Living Jacket’s Growth

Review your policy’s cash value and benefits annually. As your policy grows, you’ll see the compounding effect build real wealth and protection for you and your family.

Plan for Both Protection and Legacy

Decide how you want to use your Living Jacket. Whether you access funds for life’s major events or leave a legacy for your family, having a plan will ensure that you’re making the most of your growing protection.

Final Thoughts: Grow Beyond an Umbrella with the Living Jacket

An umbrella offers temporary coverage, but the Living Jacket is protection that grows with you, adapting to your life’s needs and securing your financial future. Unlike an umbrella that stays static, a Living Jacket, powered by a whole life insurance policy, provides security, flexibility, and growth over time.

As Sarah learned, real financial security comes not from just staying dry but from staying warm, covered, and continuously protected as life unfolds. With a Living Jacket, you gain a financial resource that shields you from the unexpected, adapts to your needs, and ultimately provides a lasting legacy. Consider how the Living Jacket can transform your approach to protection and growth, offering you a strategy that truly grows with you.