Benefits of Banking with Permanent Life Insurance.

Why would you want to own a per­ma­nent life insur­ance policy?

Depend­ing on the design of the pol­icy, if you choose the right design, there are mul­ti­ple rea­sons you would want to. So don’t let any­one tell you that own­ing a whole life insur­ance pol­icy is a bad idea. It is not, if you under­stand which type of pol­icy to pur­chase and how to use it to the best advan­tage for yourself.

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Acknowl­edge­ment of this pic­ture goes to Steve Smith.

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Here are a few reasons.

1. Life­time Lend­ing Pro­vi­sion in Your Own Bank­ing Sys­tem, (80% Liv­ing Ben­e­fit and 20% death ben­e­fit). You have access to 60% to 70% cash value imme­di­ately. Why is this so good? Because this is the cap­i­tal you will be bor­row­ing from your­self to pur­chase the things you would oth­er­wise bor­row from some­one elses bank dur­ing your lifetime.

Depend­ing on age, but around year three or four of the pol­icy, the cost of pre­mium each year equals the amount of cash value, so very quickly the amount you put in can be bor­rowed out. Then by around year eight to ten the full pre­mium amount you have paid is avail­able as cash value. This trans­lates to mean your insur­ance is free at this point. What do I mean exactly? Let’’s take a 21 year old with a $3,000 annual pre­mium. At year 10 of his pol­icy he would have paid into his pol­icy 10 x $3,000 pre­mium = $30,000. But, the cash value has grown to = $32,442. Also, the death ben­e­fit has grown to be $299,344.

2. Why bor­row from your­self? Two rea­sons;

First is so you can recap­ture the prin­ci­pal and inter­est pay­ments that would oth­er­wise profit some­one elses bank and that would oth­er­wise be flow­ing out of your life for­ever. You see, most of, if not all the money you are sav­ing for your future, or for emer­gen­cies etc. in your mul­ti­ple types of finan­cial vehi­cles, is not easy for you to access with­out restric­tions and penal­ties, right? Why is that? Maybe it is because the finan­cial insti­tu­tions want use and con­trol of your money for as long as pos­si­ble so they can lend your money back to you or to some­one else so they can profit from that. Why should some­one else profit from the money you are sav­ing for your future? Why don’t you start prof­it­ing from the money you are sav­ing for your future instead?

Sec­ond rea­son; So you can increase the death ben­e­fit by pur­chas­ing paid up addi­tions with the inter­est spread. Read fur­ther as to why this is a good idea.

3. Mimic Bank­ing Func­tion­al­ity. Really the only type of finan­cial vehi­cle that allows a reg­u­lar per­son to mimic bank strate­gies in their own bank­ing sys­tem is a whole life insur­ance pol­icy with a mutual com­pany. The Life Insur­ance com­pa­nies have been around for longer than the cur­rent tax sys­tem we fol­low and so are not sub­ject to a lot of the tax­a­tion laws that other finan­cial vehi­cles must fol­low. So there are some major tax advan­tages to grow­ing your money in this type of insur­ance pol­icy. Can you imag­ine the amount of money you will save by bor­row­ing from and pay­ing back your­self rather than bor­row­ing from and pay­ing back some­one else with inter­est? Lend­ing needs over a life­time are enor­mous and cost on aver­age, 34.5 cents out of every dol­lar that is earned, in inter­est pay­ments alone. One can­not look at per­ma­nent life insur­ance as only an expen­sive life insur­ance pol­icy. It is so much more.

4. Cost of Insur­ance. Every­one knows that Term Insur­ance is the cheap­est form of life insur­ance, while you are in the age range where the actu­ar­ies have deter­mined you are least likely to die. And this is great if you are inter­ested in only buy­ing a death ben­e­fit for a period of time, say when you are the bread­win­ner and have younger chil­dren or a lot of debt. How­ever, as each term ends, the cost of insur­ance will increase till it becomes unaf­ford­able when you need the insur­ance the most, when you are most likely to pass away. This is why per­ma­nent or ‘life-long’ life insur­ance should be con­sid­ered as well. Actu­ally, I believe it is essen­tial as well.

Here is an exam­ple of why one should start pay­ing for whole life insur­ance when they are young. A 21 year old male who starts pay­ing $3000 a year, or $250 a month and keeps pay­ing till he is 70 years old will be insured till he passes away and as he ages the cost of his insur­ance does not increase. In fact it decreases to $2,925 at age 66 and he no longer has to pay any pre­mi­ums after age 70.

At age 21 the begin­ning death ben­e­fit is only $150,000 how­ever, not a very high per­cent­age of 21 year old’s pass away.
At age 31 the death ben­e­fit has dou­bled to equal 299,344.
At age 41 it has fur­ther increased to be 446,797.
At age 51 the death ben­e­fit, which still only costs $3,000 per year has increased to $607,313.
At age 61 the death ben­e­fit is $801,198 and
at age 71 the death ben­e­fit has grown to $1,094,932.

The pol­icy no longer requires a pre­mium to be paid at or after age 70.  How much would it cost you to keep pay­ing for a term insur­ance mil­lion dol­lar death ben­e­fit at age 70 and beyond?

You see Per­ma­nent Life Insur­ance costs more in the begin­ning but less as you age. Term insur­ance costs less in the begin­ning and more as you age. So much more that it becomes unaf­ford­able. Did you know that only 3% of all Term Poli­cies are ever paid out. That means 97% of the money that is col­lected on Term Poli­cies is NOT paid out.

This 21 year old will pay $146,625 in pre­mi­ums over 49 years how­ever, the life­time ben­e­fit gained (with­out any bank­ing which only increases the ben­e­fits) will be $876,673. That is equiv­a­lent to over $40,000 tax free income from age 70 till age 90 and still have death ben­e­fit left for heirs.

Click here to see a pol­icy and it’s ben­e­fits which was pur­chased start­ing at age 51 by a  male. Obvi­ously the pre­mi­ums are higher than for the 21 year old but the time frame is shorter to age 70 and the growth of money and amount of tax free income from age 70 to 90 makes it well worthwhile.

5. Guar­an­teed growth. How many of your invest­ments guar­an­tee growth of your cap­i­tal? With life insur­ance the Cash Value must equal the amount of the Face Value at age 121. Because we are liv­ing longer, the age has been increased from 100 to 121. And most poli­cies have a min­i­mum guar­an­teed growth of 4% over the life of the pol­icy. This growth is tax deferred. How­ever, on top of that, a major advan­tage is that the money can be accessed tax free if done cor­rectly as well. Which other finan­cial vehi­cles allow you access the the growth tax free when you use the money? Does real estate, or stocks, or mutual funds, or gold etc. No.

6. Tax Free Div­i­dends. Because the pol­icy own­ers own a por­tion of the mutual com­pany that hold their life insur­ance, the div­i­dends are not treated the same as those div­i­dends paid out from a stock com­pany where the share­hold­ers earn the div­i­dends. This is a huge advan­tage for the pol­icy own­ers of Mutual com­pa­nies because the div­i­dends are not taxed as they are for share­hold­ers because they are con­sid­ered to be a return of pre­mium instead. It means that the pol­icy own­ers paid too much and so some of ther money was returned to them. The pol­icy own­ers paid too much in the stock com­pany also, how­ever, they do not ben­e­fit by hav­ing the over­pay­ment returned to them because the share­hold­ers get that profit instead. So one is not taxed on the div­i­dends earned in a mutual company.

One more thing, because the div­i­dends are paid on the death ben­e­fit, the more paid up addi­tions you pur­chase the more div­i­dends you earn and the more cash value you will have avail­able. It really is a beau­ti­ful thing.

7. Insur­a­bil­ity Rider. Did you know you can add an insur­a­bil­ity rider to your pol­icy design so you will be able to pur­chase, through paid up addi­tions, more insur­ance over your life­time, no mat­ter what hap­pens to your health, which is how the death ben­e­fit gets larger as time goes by, which in turn means the cash value has to also increase as time goes by.  This also means of course your bank, your lend­ing pro­vi­sion to your­self or to oth­ers if you so chose, also increases.

8. Flex­i­ble Retire­ment years. You decide when you want to retire and how much tax free income you want to have avail­able and draw each year. You can plan accord­ingly because you can know the end at the begin­ning and so project a pre­dictable out­come. No spec­u­lat­ing here.  Do you real­ize that you can choose at what age you retire and start tak­ing tax-free loans from your pol­icy? You do not have to worry about pay­ing those loans back either because they just come off the death ben­e­fit after you pass away. Then what is left passes to your heirs tax free also. This is a win win way to multi-task your money and any­one who says per­ma­nent whole life insur­ance is no good, has no idea how to use it to your advan­tage and do not know what they are talk­ing about.

9. Is Cash really King? Once you under­stand how an insur­ance pol­icy func­tions you will real­ize why peo­ple talk about the fact that you finance every­thing you buy by either pay­ing inter­est or loos­ing the oppor­tu­nity to earn inter­est. This lost oppor­tu­nity to earn inter­est is rarely explained or fully under­stood. You see, in the types of insur­ance poli­cies I am talk­ing about you actu­ally earn tax deferred inter­est and tax free div­i­dends even while you are bor­row­ing money from the cash value por­tion of your pol­icy. So in actu­al­ity the say­ing should be CASH VALUE IS KING. Because when you bor­row the cash value from your pol­icy it has not col­lapsed the invest­ment, it is still in place and still earn­ing you profit. Let me know where else you can beat that…

10. Guar­an­tees. What types of guar­an­tees do some com­mon invest­ments offer, say 401(k)’s, IRA’s, Mutual Funds, Stocks, Real Estate?  How many of your cur­rent invest­ments offer you a guar­an­tee of no loss of prin­ci­pal? How many of your cur­rent invest­ments offer you guar­an­teed growth of at least 4%? How many of your cur­rent invest­ments offer to pay for them if you become dis­abled? And also, how many of your cur­rent invest­ments have paid you tax free (non-guaranteed) div­i­dends every sin­gle year with­out fail and as a com­pany have a track record of pay­ing these div­i­dends with­out fail for the past 150 years? How many of your invest­ments assure you of liq­uid­ity and access to your money when ever you need it, with­out penalty? Safety, secu­rity, pre­dictabil­ity and guar­an­tees are what peo­ple should be demand­ing in at least some of their investments.

We are focus­ing on the bank­ing aspect of the poli­cies in this blog post so as a final note, the more you bank, the more you pay your­self back with inter­est, the more paid up addi­tions you pur­chase, the more div­i­dends you earn and the more cash value you have avail­able in your bank and so the more lucra­tive your retire­ment years will be.

Go to www.infinitebanking.org and watch the videos. There is a patent pend­ing life insur­ance pol­icy designed to pro­vide much bet­ter cash value and growth than por­trayed in these videos, how­ever, the con­cept is the same, the design just super­charges this par­tic­u­lar poli­cies bank­ing functionality.

Call me, Jen­nifer, today at 845 – 649-7487.

I give free consultations.

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The sup­port­ing mate­r­ial in this blog post is designed to edu­cate and pro­vide gen­eral infor­ma­tion regard­ing the sub­ject mat­ter cov­ered. It is pre­sented with the under­stand­ing that the writer is not engaged in ren­der­ing legal, finan­cial or other pro­fes­sional advice. It is also under­stood that laws and prac­tices often vary from state to state and are sub­ject to change.
All illus­tra­tions and exam­ples pro­vided in these mate­ri­als are for edu­ca­tional pur­poses only and indi­vid­ual results will vary. Each illus­tra­tion or exam­ple pro­vided is unique to that indi­vid­ual and your per­sonal results may vary.
Because each sit­u­a­tion is dif­fer­ent, spe­cific advice should be tai­lored to each individual’s par­tic­u­lar cir­cum­stances. For this rea­son, the read­ers ares advised to con­sult with a qual­i­fied licensed pro­fes­sional of their choos­ing, regard­ing that individual’s spe­cific sit­u­a­tion.
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