Not Your Fathers Life Insurance Policy


Insurance NewsWhen I am speaking to a crowd on this topic I often call a properly designed whole life policy as the “one account” because it is so truly unique and powerful. It is the only account that I am aware of that can function with many different uses that all work together. This is the only account that can be:

Savings Account– When you are not using your money it is sitting inside of the life insurance contract collecting much more in interest than it would if it was sitting in a bank. As of this writing most savings accounts are paying 0.5% or less and some life carriers dividend scale is almost 6.5% on life policies. Even after you take out the cost of insurance in the early years of the policy your money still does far better than dying a slow death in a traditional bank. You have easy access to your funds just like a savings account so why keep most of your money in the bank doing nothing for you or your family?

Your Personal Bank– Just as described in the last chapter you can put these funds to use to plug up your 4 massive wealth drains and help you grow wealth as the bank. Because you are doing this inside of your life insurance contract your earnings are tax deferred inside the policy and when properly done can be accessed tax free. Also with some policies and carriers the money you borrow out will still be credited with growth and dividends. This is not common but there are carriers that allow this and we can help you determining which carrier is best for your needs

Retirement Account- There will come a time when you desire to pull an income stream out of your policy. You will be able to either withdraw the money as you see fit (not optimal most of the time) or take policy loans that you will not pay back. In most cases policy loans are optimal because you don’t have to pay taxes on policy loans. If you choose, you don’t have to pay the policy loans back during your lifetime. The loans can be paid back out of the death benefit after you pass away. For instance you have a $1,000,000 death benefit but have borrowed out $250,000 in policy loans and deferred interest and you pass away, your family will receive the $1,000,000 death benefit less any outstanding policy loans which in this case are $250,000. This will produce $750,000 tax free to your estate after you pass away.

Rainy Day Fund- You should never borrow all the cash value out of your policy but rather keep a chunk of money in the policy in case of emergency. This is a rainy day fund that produces solid interest rates and return.

Estate Creator- Let’s not forget you are creating all this wealth inside of a life insurance contract which will automatically leave behind money for your family and/or anyone else you choose after you pass away. My mom, as she aged, started to worry more about leaving money behind for her family instead of living as abundant of a life as she should have lead. This is the only kind of program where you can spend every nickel during your lifetime and still leave behind extra for your family. Wherever you have your money saved or invested currently, ask yourself if the account you have it in has all of the benefits listed below. These are all benefits of a properly designed life insurance contract.

Do your current investment or retirement accounts accomplish all of this?

  1. Give you principle protection against any downside market risk. Initial cash value and all subsequent premiums are principle protected
  2. Your money will grow every year contractually guaranteed by very old solid companies
  3. Non taxable growth and dividends paid to the account
  4. Allow you to access your funds at any age, for any reason, with no penalty or taxes, without fees. Big difference from 401k’s and IRA’s that have very strict guidelines and timetables for withdrawing or borrowing money from the account
  5. Total control of what you use your funds for including for investment, personal, business, and emergencies
  6. Ability to put large sums of money into the account while maintaining the account’s tax free growth and access. The maximum most qualified accounts (IRA’s and alike) will allow contributed annually is around $50,000. There is no such limitation on whole life insurance contracts(NOTE: While #6 is true please don’t think you have to be a high income earner to make this program work. We have clients putting in as little as $300.00 per month into their program. We also have clients putting in multiple 6 figures into their plans every year. This is truly a strategy for most income levels)
  7. Tax free withdrawals when done properly. These structures have a similar tax structure to a Roth IRA but without all the rules and red tape for accessing the funds
  8. Easy in and out of the policy means you can use this account as your personal banks and recapture lost depreciation and interest you might otherwise normally experience
  9. Very difficult for creditors to attach judgments and liens and be able to collect the funds. (always consult with a good asset protection attorney)
  10. Money creates a large death benefit that will also pass tax free to your estate (certain maximums apply, check with your attorney)
  11. Very easy to borrow money from the insurance company for the rest of your life. Not having to “qualify” for a loan as with traditional sources for funds. Truly taking control of your finances for generations to come
  12. Guaranteed insurability for life once you’re approved. Once you have this policy in place you and your family are covered for life assuming at least the base premium is paid as agreed. It is important to understand that the base premium might be able to be paid out of existing cash value in years you don’t want to fund it with anymore outside money. Unlike term policies that only insure you for a specific time frame. Many people are shocked to find out they cannot get new coverage because they have been diagnosed with an affliction that makes them uninsurable. You will also be able to stop funding the policy in the future and have it in force for the rest of your life without new premiums
  13. The freedom and flexibility to combine these policies with almost every other strategy outlined in this book. Your life insurance policy or private bank will be your centerpiece and cornerstone wealth creator. Many other wealth streams will flow around this rock solid base. Would you like to invest in real estate, make private loans, buy tax liens, buy gold, and buy discounted notes and discounted debts? You can use this policy to do all of the above and more

When you properly design a life policy with a proper carrier who embraces these types of policies you receive all these benefits. Now I always get the question “how do I get one of these set up?” If you go to your normal insurance agent please don’t be surprised if they look at you like a deer in headlights when you start describing this type of policy. There are only a handful of agencies who understand these concepts (to their fullest degree not just, “yes I have heard of it”) and I am sure you will not be surprised to learn that my company writes these policies all over the country and has done so for years. Please feel free to send us an email if you would like more information or to have your own custom illustration built.

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