Using Life Insurance as a Non-Correlated Asset

A Smarter Way to Protect and Position Your Wealth

When the market swings, emotions follow.

We’ve seen it time and time again — portfolios rise quickly, then fall just as fast. Business owners, executives, and families who have worked hard to build wealth suddenly find themselves exposed to forces they cannot control.

That’s where strategic planning matters.

One often-overlooked strategy in advanced financial planning is using life insurance as a non-correlated asset. When structured properly, certain types of permanent life insurance can provide stability, liquidity, and tax advantages that don’t move in lockstep with the stock market.

Let’s break that down.

What Is a Non-Correlated Asset?

A non-correlated asset is one that doesn’t move in the same direction as traditional markets like stocks and bonds.

When equities drop, a non-correlated asset may:

  • Stay stable

  • Continue growing

  • Or even become more valuable in comparison

For high-income earners and business owners, diversification isn’t just about spreading investments across industries. It’s about spreading risk across asset classes.

Life insurance — when designed intentionally — can serve that role.

How Life Insurance Fits Into the Picture

We’re not talking about basic term insurance here. We’re referring to properly structured permanent life insurance, such as:

  • Whole Life

  • Indexed Universal Life (IUL)

  • Certain fixed Universal Life policies

When funded strategically (not minimally), these policies can:

1. Provide Market-Independent Growth

Whole life policies grow based on carrier dividends, not stock market performance.
IUL policies credit interest based on index performance but include downside protection (floors), limiting market loss exposure.

That means you avoid direct market volatility.

2. Offer Principal Protection

Unlike brokerage accounts, properly structured policies are designed not to lose value due to market downturns (assuming policy guidelines are followed).

In uncertain economic cycles, stability has value.

3. Deliver Tax Advantages

Life insurance offers:

  • Tax-deferred growth

  • Tax-free access to cash value through loans (if structured properly)

  • Income-tax-free death benefit

For high earners concerned about future tax increases, this can be a powerful planning tool.

4. Provide Liquidity When You Need It Most

During market downturns, pulling money from investment accounts can lock in losses.

Accessing policy cash value instead may allow you to:

  • Avoid selling depreciated assets

  • Fund business opportunities

  • Cover unexpected liquidity needs

It becomes a strategic reservoir.

Who Should Consider This Strategy?

Using life insurance as a non-correlated asset is not for everyone.

It may make sense for:

  • Business owners

  • High-income professionals

  • Individuals maxing out qualified retirement plans

  • Families seeking estate tax efficiency

  • Those looking for volatility protection

This is not about replacing your portfolio. It’s about strengthening it.

Where We See It Work Best

At Haughn Insurance, we often help clients integrate life insurance into a broader financial strategy — not as a standalone product, but as a coordinated planning tool.

When aligned correctly, it can:

  • Offset portfolio volatility

  • Enhance legacy planning

  • Improve long-term tax efficiency

  • Provide flexible capital

And perhaps most importantly — it creates options.

Options during downturns.
Options in retirement.
Options for the next generation.

The Key: Structure Matters

Not all life insurance policies are built the same.

Design, funding strategy, carrier strength, and long-term management are critical. A poorly structured policy can underperform expectations. A properly structured one can serve as a foundational asset.

That’s where guidance matters.

How Haughn Insurance Can Help

At Haughn Insurance, located in Dublin, Ohio, we work closely with business owners and families to evaluate whether life insurance fits into their overall wealth strategy.

Our approach includes:

  • Reviewing your current portfolio structure

  • Evaluating tax exposure

  • Modeling long-term projections

  • Designing policies for cash accumulation — not just death benefit

  • Ongoing policy monitoring

We believe insurance should not simply be purchased. It should be engineered.

If you’re looking for ways to reduce volatility exposure while maintaining long-term growth potential, we would welcome a conversation.

Because diversification isn’t just about chasing returns.
It’s about protecting what you’ve built.

If you’d like to explore whether life insurance can serve as a non-correlated asset in your financial plan, reach out to Haughn Insurance in Dublin, Ohio. We’re here to help you plan with clarity and confidence.