three things to consider before opening a high cash value life-insurance policy so we're gonna
go through a couple items here quickly we're not going to go into a lot of detail on each
of these bullet points so the first thing we have is company selections so again opening a
policy I should say and my goal is to maximize the cash value from start to finish the first
thing we have here is company selection so you do not need me or anyone really to tell
you that there are a lot of insurance companies out there what we have found is when it comes to
cash value life insurance there have really been four companies that I've seen consistently deliver
among the highest cash values in the industry in terms of actual performance and let me back up
and actually say highest cash values and death benefit appreciation over time it's also these
are also the companies that many major banks and corporations use I'm circling three of these for
the reason that had a recent conversation with an actuary that works nationwide I used to work
for one of these companies now he's an independent consultant known as one of the top in the country
what was really interesting about what he had said that it is better to go with a basic whole
life insurance policy with one of the top mutual companies instead of a well designed policy with
a smaller company that was extremely interesting to me as I dug into a to a lot of it was validated
but at the same time these companies in terms of actual performance have consistently delivered
the strongest cash values second policy design and here we have limits underlined so when it
comes to policy design what does that entail where your money can go can go toward my base
premium which first buys me death benefit and then eventually builds cash value typically we
drive that as low as the insurance company will allow her there limits their limitations every
company has different limits rules around what riders can be attached how we can optimize the
upfront and long term cash value of a policy but what we've seen on a guaranteed and not guaranteed
basis if we are lowering that as low as we legally can within the company's limits we have more cash
value second is the PUA Rider often refer to this as a cash dumping this guy we will get as
much money as we possibly can to the policy so again every company has limitations on this for
example MassMutual will allow you to 10x your base premium as far as a total payment per year
so if I have a $10,000 premium that means I can pay in a total of $100,000 per year so it might
have a 10k base premium a $1,000 term rider which I'll need to raise my MEC limit that'll be the
next thing I touch on so 10k base 1k term rider 89,000 PUA accelerating the cash value dumping
then the third item the other limits would be this guy so this is not an insurance company
limit this is an IRS limit a modified endowment contract or MEC limit now the nice thing is here
is we can actually set it wherever we want it has a direct relationship to our age and death
benefit on a life insurance policy that is the measuring stick that the IRS uses to determine
if the life insurance policy will be viewed as life insurance or a pure taxable investment in
their eyes so often when it comes to a limit a question that all I'll often ask or our office
will ask you when you're first considering a policy is hey how much do you want the ability
to add into a policy on any given here ability not be committed to you but if things go very
well how much do I want the ability to pay in and if I said I don't know $50,000 per year
well what that would mean is the insurance company will allow me to do what wherever I set my minimum
premium if I can't n exit what that would mean is I could set this at 5k and that gives me the
ability by the insurance company standards to pay up to 50 but I'm only committed to five and then
my MEC limit I will set it guess what 50k this way the IRS does not tax the policy also at 50k
or potentially higher if I want to be able to pay to the policy for a long period of time and
then the last item is loans if I am interested in using the policy whether it be for infinite
banking retirement income whatever it might be I want to understand or have some degree
of understanding of how policy loans work such as when can I borrow this is a company that allows me
to take out loans anytime I want or I have to wait at least a policy here when does it make sense to
borrow do I want to wait several years until I actually have a positive cash value my personal
opinion is yes but every situation is different how often were frequent can we borrow how does
the interest work or how does it accrue life insurance loan interest accrues daily at annual
simple interest okay what does that mean we've got other videos and contact on that but when can they
take a loan how often how does the interest work payments I hear the word loan and what comes to
my mind what comes to your mind when you hear the word loan payments and interest typically however
with a life insurance policy interest will accrue but you have a ton of flexibility with payments
in many cases they can be optional you'll see individuals and big corporations use cash value
life insurance as a means to pay retirement and come down the road to their executives and
individuals will use it for themselves because I can take a tax-free income disbursement from the
policy how it is taken from the policy tax-free is through loans now guess what when they're taking
income via loans they're not paying anything back that would kind of defeat the purpose of taking
income to have to pay something back point being we don't have to pay back if we're taking income
and not making any interest payments or anything so it's good to be aware of that what might I have
to pay it back what's the situation when I have to pay it back how much just going to use this
word how much can I borrow it's a big question to the company company typically 90 to 95 percent of
my cash value I'll be able to access but just some questions here to ask things to ponder if you're
working with anyone or researching it for the first time whole life cash buy your life insurance
infinite banking whatever it might be feel free to reach out to us anytime as well and hope this
helps hey guys Steve Parisi here if you enjoyed the content you just saw please subscribe like
and hit the notification bell for future videos if you'd like more information or to see some
custom policies for yourself feel free to call or email our offices at the contact information below