Current Financial Crisis is Proof Positive That Cash Value Life Insurance Is the Foundation For Economic Prosperity

Europe and the world is tethering on financial meltdown. When one take a closer look at countries that are pulling Europe down and countries that are preventing total collapse one can readily see the virtue in having and encouraging a life insurance industry and specifically a CASH VALUE LIFE INSURANCE INDUSTRY!

Of all the PIGS countries, Ireland is the only one with an aggressive and vibrant life insurance industry. I need to do an assessment to determine what cause Ireland's problems. Just having Life Insurance will not guarantee economic success. Britain per capita premium was the third largest in the world the last time I checked. But their economic situation is wanting because the Association of British Insurers with child like naivety uses about 70% of their policy reserves to buy 15% of the FTSE 100. Seventy percent of policy reserves used to buy WHAT EXISTS and they wonder why there is no growth and no job creation!

Of the other PIGS countries, Greece life insurance industry is the weakest of the original Democracies of Western Europe. Only Turkey was worst than Greece in terms of life insurance purchase. It is now evident that without a life insurance industry, Greece was not able to provide the capital it needed for its growth and development. They had to rely on foreigners. That created the debt that is overwhelming them now. Portugal is similar to Greece. Their life insurance purchase is a recent development. They are just one rung on the ladder above Greece. Spain is one rung above Portugal and Italy is one rung above Spain. All these countries that are low on the ladder of life insurance industry suffers from the same fate. Inadequate domestic capital formation and an undue heavy reliance on foreign capital. That is why their debt levels have become unsustainable.

Now let us look at the countries that is keeping Europe from total collapse. Although Switzerland is not in the European Union I will start with them because they are the King of life insurance purchase based on premium per capita. And what they buy is ENDOWMENT POLICIES. Not the damn fool fool TERM that Americans glorify and which is the cause of their crisis. In addition to being King of individual life insurance purchase they are King of Life REINSURANCE. With individual life insurance a country is limited to its domestic market. With reinsurance the market is the Globe! Have you heard about Swiss Re? Have you ever wondered why the world seek shelter in the Swiss Franc? Its not their banks nor their famous Swiss watches it is their insurance industry (both life and general; and re-insurance).

Next is Germany. They have a vibrant domestic life insurance industry. But they rival Switzerland with re-insurance. Ever heard about Munich Re and Hannover Re to name their top dogs. Holland, Denmark, Norway Sweden are all heavy into domestic life insurance and/or reinsurance. For those of you who do not believe that this little blogger knows what he is talking about ask yourself this question: Why does the world largest and richest investor - Warren Buffet owns over 70 insurance companies. And while you are at it do you think you can solve the problem of what made Warren Buffet rich? Any answer, any, any......... you give up? The answer is CASH VALUE LIFE INSURANCE. His general insurance portfolio helped a little but CASH VALUE LIFE INSURANCE was what did it for him. Don't you think it can do it for you and your country too?!