I came across your video. Great information. Using your $500k loan example. What is the benefit to start paying back the $500k loan. If loan was taked to say buy a home, should the loan be paid back? At what point once a loan is taken can the owner start paying back the loan?
Great video! Up to what point can someone withdraw from their policy be considered tax-free? I know that there is a difference between withdrawals and policy loans, but is it true that it remains tax-free as long as it does not exceed your premium basis; once you exceed that amount then it becomes ordinary taxable income?
So how does a regular wash-loan work? Does the money in the index account not earn interest anymore? If so how and when are they able to earn interest again?
So when you take a loan, they charge 5% on the loan? So in your example you took a loan of $500,000, so would they charge you $25,000? Also, what if the index is negative and your policy account earns a 0% then that would mean you lost money right?
Ok at @5:54 , you never mentioned about the 12% compound interest that is in affect when leaving the $500,000 in the IUL. So with the compound interest wouldn’t it be as if I never took out $500,000?
Hi Giovanni. Matt can correct me if I’m wrong but once you take that 500k out you will need to pay it back eventually or just subtract it from the death benefit if you don’t pay it back when you are alive. You may be thinking about the interest you don’t have to pay back. Example: take a loan for 500k and earns 7% and loan rate is 5% you have a net of 10k you made from spread. What he didn’t really talk about was what your policy would look like. You would have 1.07M earning interest and a loan balance of 525k AND the max you can loan out the following year would be 1.07M minus 525k. You wouldn’t want to loan out more than your cash value because then the policy would lapse. I know he made it sound like you can keep on taking loans out for 500k every year but it wouldn’t work like that because you can’t loan more than your cash value. Hope this helps
Thank you so much. That’s pretty crystal clear explanation. I have a question. When talking about loan amount. Can a client loan from the accumulation amount or from the death benefit amount?
Not sure if you are going to respond. But lets say i have a 500k IUL. I took a loan out for 50k. It becomes a lien from my life insurance policy.... Does that mean they make monthly payments through my life insurance policy? Or do they charge me directly? Or do they increase my life insurance mothly premium? Trying to find out where the cost is going to. Im still a bit young but im interested in this powerful tool.
Hello Matt. I have a question. So in your illustration you got someone bowering 500k against their 1m policy, so who sets the length of the repay? If you don’t pay it back how long they keep charging you interest?
I’m an agent and when I run my policies (IUL or VUL) with distributions it’s a washed loan. However, on my policies the net cash surrender value and the policy account value change the same. Why is the net cash surrender value and the policy account value stay the same?
Is there a difference between a fixed wash loan and a participating loan? For example, with the illustrations you show, when taking distributions the account value is different than the net cash surrender value.
That million Dollars you’re talking about is cash value or the death benefit? If it’s death benefit, you can borrow against your death benefit or you can borrow against your cash value?
You are borrowing from the insurance company, not your policy. They in turn place a lien on your policy. If you die it comes out of your DB. If you surrender the contract it comes out of cash.
@@CashValueLifeInsuranceReviews Do your Index Universal life insurance need to have a cash value before you can borrow. For example, I have a two million dollar policy and I want to borrow 500,000 from the insurance company using my policy as collateral.
To apply for a policy review, visit:
leveragedwm.com/iul-review
This is probably one of the most important aspects to understand .. thank you
One of the best methods of explaining policy loans that I have ever come across. Kudos.
Best explanation on RUclips. Not kidding. You have a gift
Thanks for the video Matt. interesting and helpful.
I came across your video. Great information. Using your $500k loan example. What is the benefit to start paying back the $500k loan. If loan was taked to say buy a home, should the loan be paid back? At what point once a loan is taken can the owner start paying back the loan?
Can you get a loan from the policy value without having a cash surrender value?
This was a great explanation! Thank you
In the case of a business owner, can the "individual" get an IUL and the business actually funds the IUL and pays the premiums?
yes!
I’d like to learn how that works. How would the business contributions for the owner be taxed?
Great explanation
I finally get it. :) Thanks!
Great video! Up to what point can someone withdraw from their policy be considered tax-free? I know that there is a difference between withdrawals and policy loans, but is it true that it remains tax-free as long as it does not exceed your premium basis; once you exceed that amount then it becomes ordinary taxable income?
that would not be true. Only taxable if you are withdrawing funds above basis. You should be using a loan of some form to keep it tax free.
So how does a regular wash-loan work? Does the money in the index account not earn interest anymore? If so how and when are they able to earn interest again?
please make a video on what happens when you stop the policy after 20y. do I get cash value out? is it taxfree?
So when you take a loan, they charge 5% on the loan? So in your example you took a loan of $500,000, so would they charge you $25,000?
Also, what if the index is negative and your policy account earns a 0% then that would mean you lost money right?
Ok at @5:54 , you never mentioned about the 12% compound interest that is in affect when leaving the $500,000 in the IUL. So with the compound interest wouldn’t it be as if I never took out $500,000?
Hi Giovanni. Matt can correct me if I’m wrong but once you take that 500k out you will need to pay it back eventually or just subtract it from the death benefit if you don’t pay it back when you are alive. You may be thinking about the interest you don’t have to pay back. Example: take a loan for 500k and earns 7% and loan rate is 5% you have a net of 10k you made from spread. What he didn’t really talk about was what your policy would look like. You would have 1.07M earning interest and a loan balance of 525k AND the max you can loan out the following year would be 1.07M minus 525k. You wouldn’t want to loan out more than your cash value because then the policy would lapse. I know he made it sound like you can keep on taking loans out for 500k every year but it wouldn’t work like that because you can’t loan more than your cash value. Hope this helps
Awesome Video.
The public needs separate fact from fiction..ie...celebrity...TV hawkers...gurus..pundits....to appreciate the potential, structure of IUL....
Thank you so much. That’s pretty crystal clear explanation.
I have a question.
When talking about loan amount.
Can a client loan from the accumulation amount or from the death benefit amount?
You can take a loan out on the Cash Value of the policy. in regards to paying it back, there are more options.
Great explanation....
Not sure if you are going to respond.
But lets say i have a 500k IUL.
I took a loan out for 50k. It becomes a lien from my life insurance policy....
Does that mean they make monthly payments through my life insurance policy? Or do they charge me directly? Or do they increase my life insurance mothly premium?
Trying to find out where the cost is going to.
Im still a bit young but im interested in this powerful tool.
Thanks for watching! Feel free to book some time with us to fully go through your questions: leveragedwm.com/contact-ii/
So that $1,000,000 in my policy account (2nd square)is my cash value right?
Yes!
I swear I can’t believe this I’m still able too get a loan from the policy but I get interest instead of getting a traditional loan from a bank
Hello Matt. I have a question. So in your illustration you got someone bowering 500k against their 1m policy, so who sets the length of the repay? If you don’t pay it back how long they keep charging you interest?
Your policy is kept as collateral and there are no set repayment terms.
So if you die before paying off the loan, the company will subtract the balance from the death benefit?
I’m an agent and when I run my policies (IUL or VUL) with distributions it’s a washed loan. However, on my policies the net cash surrender value and the policy account value change the same. Why is the net cash surrender value and the policy account value stay the same?
Sorry, I don't understand the question.
Is there a difference between a fixed wash loan and a participating loan? For example, with the illustrations you show, when taking distributions the account value is different than the net cash surrender value.
When I do illustrations with my policies with distributions, the net cash surrender value and policy account value stay the same.
@@remixsongify then you are using withdrawals or non participating loans
@@remixsongify yes of course there is a difference
You are borrowing your own money, pay interest and have it subtracted from your death benefit. Taxes are the least of your worries
I love your videos!!
That million Dollars you’re talking about is cash value or the death benefit?
If it’s death benefit, you can borrow against your death benefit or you can borrow against your cash value?
You are borrowing from the insurance company, not your policy. They in turn place a lien on your policy. If you die it comes out of your DB. If you surrender the contract it comes out of cash.
@@CashValueLifeInsuranceReviews Do your Index Universal life insurance need to have a cash value before you can borrow. For example, I have a two million dollar policy and I want to borrow 500,000 from the insurance company using my policy as collateral.