Life insurance is normally thought to be a pretty boring subject, but banks, insurance companies, large corporations, wealthy financiers, and a growing number of small and medium sized businesses are probably OK that this one is flying under the radar of the "common man".

The life insurance you bought last year (or 10 years ago) is sitting dormant...waiting for you to breathe life into it. You see...life insurance holds the very real promise of recapturing all of the interest you now pay to banks, most of the premium dollars you pay to insurance companies...and has been one of the few tax shelters left unscathed by the U.S. Government.

While most T.V. and radio personalities and so-called financial experts hate cash value life insurance, most people who own cash value insurance love it. Those who directed their financial adviser to provide them with a specially designed life insurance contract that's been modified to perform like a traditional bank love the product even more. After all...who wouldn't love the idea of earning interest on every single loan you take out? Who wouldn't love the idea of paying $0 in income taxes?

While most folks are happy chasing the highest investment return possible, others are busy studying the banking equation and reaping the profits from investors. For example, let's assume that you have a $20,000 car loan financed at 6% for 5 years.

Your monthly car payments would be $386.66. Over the course of 5 years, you would have paid $23,199.60 total - $3,199.60 of that was interest. But, if you divide $3,199.60 by the amount you borrowed, you will notice something very interesting: although the interest rate was 6%, the volume of interest on the loan actually amounted to nearly 16%. Which means that the interest on that loan represented 16% of the principal of the loan.

By the time you are paying for the car, 13.79% of the total you've repaid was interest. By ignoring the volume of interest, you end up paying much more than you think over time. The friction this creates against your investments can be overwhelming with even a modest amount of debt.

A specially designed life insurance contract can help you overcome this problem by redirecting that $3,199.60 back into your pocket...so that you can use it to invest...or buy something else. How many investors can say that their money is doing "double duty" in the stock, real estate, or any other market?

With the numerous misconceptions about life insurance though, the average individual will never see the benefits of their life insurance contract. Financial planning and retirement are usually some ideal that is thought to be unreachable. How do you overcome inflation, the friction of insurance premiums, interest on loans, and taxes to "get ahead" in life?

The basis of this article is to establish the foundation for financial planning and retirement...a subject that is - sadly - sorely misunderstood. That's why I've taken the time to write a detailed article on some of the common misconceptions about life insurance. While it doesn't provide enough detail to use your existing insurance contract for financial gain...it does provide enough information for you to sort through the B.S. that is floating around the Internet (and there really is a lot of it).

I hope you enjoy it. If you can grasp the fundamentals, the rest will be very easy to understand...