Great content, as always... I just started my policy with IBC so I definitely needed to hear this again and again. I did let them know that you were my reference for them. Samantha is my agent. Thanks for breaking it down so well.
Hi Denzel, Do you have a video explaining if I use 1 policy to loan from to pay a premium for another policy and then loaning from that policy that I paid and loaning from that to pay back the loan on the other one that I initially borrowed from?
let's run an example i fund one policy 20k borrow from it to fund one policy, then borrow from the next policy to fund the next one, then borrow from that to pay the initial policy i believe it safe to say you will run out of cash no matter what the initial funding was. You are paying multiple times insurance costs to basically run out of money and possibly cause a mess in a persons finances. a better strategy in my opinion would be fund a policy 20k then borrow a percentage say less than 10k to fund two child policies and then do velocity banking to continue to max fund the first policy and pay back the loans overtime so we don't run out of cash. I have created case studies on this go to my playlist and you will infinite banking that is the place to go.
@@DenzelNapoleonRodriguez Ok thank you! i still not understanding it. i already have 2 policies that have cash value. I would like to use 1 to pay for the other and return to loan but i would have an outstanding loan on one after i repay it. i know that i had watch one of your video on this before and unable to locate it. Thanks and keep up the great work.
Hey Denzel! First of all, you're awesome bro! Ive been learning a lot from your videos regarding velocity banking and now infinite banking. So thanks for what you've been doing to help others. Quick questions. So what's happens if someone never pays the policy loan? Are we force to pay the policy loan back, or can we just let it be deducted from the death benefit in the end?
I have question on the anniversary date of the life insurance. So you are saying that on every anniversary date, I have to pay back in full, the amount I borrowed initially correct? For example in the last part of the video we are borrowing only 60% off 15k so 9k. So on the anniversary date, I need to pay off that 9k + 450 interest so 9450 in total right?
You don’t need to pay it off it is not required by the insurance company. You set your payback terms. It is recommended and ideal that you replenish the loan to repeat the process of leveraging and having money grow in 2 places.
I believe more often than not, you are earning less in interest than you will be paying on the loan. I’ve been watching a lot of ibc and just started a policy, so no expert. But how would these companies exist if they paid out more than they earn
In the beginning years of a policy your net internal rate of return on the cash value is negative. So right out the gate when you borrow from the policy you are running a negative internal rate of return regardless of the rate. You as the policy owner need to decide when you borrow what is that money being used for and how can you effectively offset your borrowing costs for a positive gain overtime. After the first 1-2 years leading into years 3-5 depending on how the policy is designed you should start to yield a positive internal rate of return. You get to a point where your earnings in the cash value is higher than your loan cost on the money borrowed out. It is extremely important to evaluate how much money you are putting in versus borrowing out in the beginning years to make mathematical sense of what you are doing. Let me know if that helps
Denzel Velosity Banking using life insurance gives you the chance to regain your lost opportunity cost - its a great leverage tool! Thanks for your demonstrations!
Denzel, I'm putting on a financial forum for my church and I wanted to invite you as a subject matter expert! Would you be interested in something like that?
Hey Denzel! Quick question, is the interest rate on the loan yearly? What I mean is if I take out the 9k @5%, if I pay it back sooner, do I save money in interest? Another question. Let’s say I have a 100k HELOC at 5% and a a whole life insurance that gains 5%. Wouldn’t it make sense to pull the day 50k from the HELOC, dump it into the whole life insurance policy, then pull it right back out of the life insurance policy and dump it on the HELOC balance? That way I’m using the HELOC $ to allow me to gain the interest in the life insurance policy, free up the HELOC, then use the velocity banking method to pay down the loan from the life insurance policy. Do you see where I’m going with this?
You do know that the insurance company OWNS your cash value? Hence, the only way to get money out is to BORROW against it. In essence, you would be handing them the equity of your house. You really think that's a smart plan?
My question is, can this same concept, IBC, be achieved with a dividend participating Deferred Income Annuity (DIA)? My thoughts on this was, a DIA can be both qualified and non-qualified. Policy loans are allowed and one need not worry about this contract becoming a M.E.C nor would they have to worry about a premium. Any thoughts on that?
I believe annuities are designed for long term income and you still have to pay tax. The constant money going in and money coming out I’m not sure if an annuity would be ideal for that
Tax laws governing whole life policies changed in December of 2020. The companies will be able to move further out on the risk curve, and be able to return more money to policy holders. But in exchange they no longer have to guarantee a 4% return. That is my understanding anyway.
Correct I’ve got newer videos on my channel discussing new MEC laws and what it means for people implementing the concept moving into 2022. New guarantees industry wide will be anywhere from 2-3.75%
@@astroman30 average IRR is anywhere between 2-4% once the policy is passed the first few years. Internal rate of return is to offset the borrowing costs to make an investment. I’m using the money twice creating arbitrage. If you learn how to create arbitrage like the banks do you can move a lot faster with your finances. This can be done with other assets as well.
@@DenzelNapoleonRodriguez Again, you're calculating before fees/commissions are implied. Look at the article by "Consumer Reports" on how the the true IRR is 1.5%,,,,garbage.
@@astroman30 I can show my internal rates on my policies. In the beginning years return rate is negative then it breaks even then gradually starts to go up stopping at about 4% maybe a little higher. The worst performing years are the beginning most agents leave that part out. It’s all about transparency.
Happy your here I cover a lot of different topics so feel free to comment and ask questions. You can also join my private Facebook community for more in depth Q&A from other subscribers
Hey Denzel, love your content brother. I’m deciding between Penn Mutual and MM. I like your strategy, not sure if it matters in my situation because I don’t have any large debt. Penn Mutual is a Direct recognition company which I don’t love but the performance of the policy is so much better than the MM illustration for the same numbers. What are your thoughts?
I would look at actual performance over illustrated performance. If you look at the guarantees that will help with your decision process as well as ask your penny mutual agent to give you a real policy that has produced the dividends illustrated by the company.
I would be down but no agent wants to design a policy where the premium is at least 35-40% of the total amount I’m paying in. Im not willing to give up that much in cash value in the beginning years.
@@DenzelNapoleonRodriguez No I mean there’s another tax code that many agents are not aware of, if you structure your business correctly, all of the premium payments are tax deductible for the business.
@@passivedividendsoptions I know what you are referring to I still need an agent to do it. I think some agents call it a investment grade insurance contract or key man insurance you do it through your corporation. The problem I’m having is finding an agent who can design the policy for maximum cash value
You're showing on the $28k cash value you'd earn 6%, so you're showing $1,680 showing up in that cash value in dividends. That is not what would show up, though. Your guy at IBC Global has lots of videos explaining how that rate is a gross rate, and breaks down what it would actually be. He typically shows the overall IRR at around 4%/year even after many years. I really don't think what you're outlining here would be accurate. What am I overlooking?
You are correct everything I did in this video was good except for the return of the 6% I’ve learned over the years. I have other videos where I’ve improved and do a better job outlining this kind of strategy
Doing voodoo math again. The IRR will never be more than the loan rate so it is not a wash loan. If you don’t pay at least the interest back every year, guess what? Those interests will be compounded.
You are correct the sweet spot in my opinion is only borrowing a certain amount each year that does not compromise the policy. At some point we do pay the interest and principal back. I do not let it sit forever that would not be wise in my opinion. The other factor is what am I doing with the money once it is borrowed out and what is the savings or investment rate on that because that will help offset the interest. I definitely will get better on my delivery and messaging. I’ll keep working on that.
@@astroman30 hello again good to see you. Major banks and corporations use cash value life insurance and offer employee retention plans, they will use the cash value to fund retirement accounts, health care plans, etc. The company will have access to the cash value and if the employee dies the death benefit comes back tax free to the company to help find another person to replace that employee that passed away or retired. I’m just copying what major banks and corporations do that’s all.
@@DenzelNapoleonRodriguez BOLIs are bought to fund employee compensation packages. Rich people (Warren Buffett) buy existing polices from old people so he can cash them in when they die. NONE of these scenarios are used as an investment. So, how does your example coincide with Joe 6-pack in meeting his "needs?" Joe doesn't have employees, nor is rich.
@@astroman30 as we’ve discussed before many times I don’t deal with average joe in regards to cash value life insurance especially if he or she is in major debt and low cashflow. I show average joe velocity banking first and how they can rapidly pay their debt off to increase cashflow and save money on interest faster. I then show average joe how to increase his income to the point where he can then fund one of these properly designed policies and have asset protection. I also have a ministry of finance I represent where average joe can syndicate his money with other average joes and together as a community we can acquire high cash value life insurance and creating major wealth in a shorter period of time all tax free.
With 2nd stimulus want to buy silver or gold but I don't very distrustful of a company. Can u recommend a legit company. I received 600.00 x 2 = 1200 today. Waiting on the 2k if it passes by the senate
Great content, as always... I just started my policy with IBC so I definitely needed to hear this again and again. I did let them know that you were my reference for them. Samantha is my agent. Thanks for breaking it down so well.
Samantha is great good work
Samantha is pretty swayva! We speak quite often on many advanced life insurance concepts!
Which company is she with, and how does Denzel get his commission? I'm hoping to move forward into a policy soon, depending on my cash flow
Denzel you are a true blessing. You have helped me now I am paying it forward and helping others
One thing that hardly seems mentioned is the high interest rate charged on policy loans. How does this factor in?
No they don’t charge high at all
Hi Denzel, Do you have a video explaining if I use 1 policy to loan from to pay a premium for another policy and then loaning from that policy that I paid and loaning from that to pay back the loan on the other one that I initially borrowed from?
let's run an example i fund one policy 20k borrow from it to fund one policy, then borrow from the next policy to fund the next one, then borrow from that to pay the initial policy i believe it safe to say you will run out of cash no matter what the initial funding was. You are paying multiple times insurance costs to basically run out of money and possibly cause a mess in a persons finances.
a better strategy in my opinion would be fund a policy 20k then borrow a percentage say less than 10k to fund two child policies and then do velocity banking to continue to max fund the first policy and pay back the loans overtime so we don't run out of cash. I have created case studies on this go to my playlist and you will infinite banking that is the place to go.
@@DenzelNapoleonRodriguez Ok thank you! i still not understanding it. i already have 2 policies that have cash value. I would like to use 1 to pay for the other and return to loan but i would have an outstanding loan on one after i repay it. i know that i had watch one of your video on this before and unable to locate it. Thanks and keep up the great work.
Hey Denzel!
First of all, you're awesome bro! Ive been learning a lot from your videos regarding velocity banking and now infinite banking. So thanks for what you've been doing to help others.
Quick questions.
So what's happens if someone never pays the policy loan?
Are we force to pay the policy loan back, or can we just let it be deducted from the death benefit in the end?
I have question on the anniversary date of the life insurance. So you are saying that on every anniversary date, I have to pay back in full, the amount I borrowed initially correct?
For example in the last part of the video we are borrowing only 60% off 15k so 9k. So on the anniversary date, I need to pay off that 9k + 450 interest so 9450 in total right?
You don’t need to pay it off it is not required by the insurance company. You set your payback terms. It is recommended and ideal that you replenish the loan to repeat the process of leveraging and having money grow in 2 places.
Very informative examples. Thanks Denzel for doing what you do!
Will this same scenario work with a Guardian policy?
I enjoy your take on the finance side of things.
I believe more often than not, you are earning less in interest than you will be paying on the loan. I’ve been watching a lot of ibc and just started a policy, so no expert. But how would these companies exist if they paid out more than they earn
I’m going to recommend you be interviewed on a very popular podcast. Keep an eye out
I will keep an eye out
Thank you
denzel, why would you use just 66-80% what happens if you use 100%?
Can you speak about if you are already retired , can you do this and draw an income every month still?
What if the policy loan rate is higher than the guaranteed policy internal rate of return?
In the beginning years of a policy your net internal rate of return on the cash value is negative. So right out the gate when you borrow from the policy you are running a negative internal rate of return regardless of the rate. You as the policy owner need to decide when you borrow what is that money being used for and how can you effectively offset your borrowing costs for a positive gain overtime.
After the first 1-2 years leading into years 3-5 depending on how the policy is designed you should start to yield a positive internal rate of return.
You get to a point where your earnings in the cash value is higher than your loan cost on the money borrowed out.
It is extremely important to evaluate how much money you are putting in versus borrowing out in the beginning years to make mathematical sense of what you are doing. Let me know if that helps
@@DenzelNapoleonRodriguez WOW! I never saw it that way. You are amazing. Thank you....
Denzel Velosity Banking using life insurance gives you the chance to regain your lost opportunity cost - its a great leverage tool! Thanks for your demonstrations!
Denzel, I'm putting on a financial forum for my church and I wanted to invite you as a subject matter expert! Would you be interested in something like that?
I would be happy to join send me an invite on the app so I can see the details of the event.
Hey Denzel! Quick question, is the interest rate on the loan yearly? What I mean is if I take out the 9k @5%, if I pay it back sooner, do I save money in interest?
Another question.
Let’s say I have a 100k HELOC at 5% and a a whole life insurance that gains 5%. Wouldn’t it make sense to pull the day 50k from the HELOC, dump it into the whole life insurance policy, then pull it right back out of the life insurance policy and dump it on the HELOC balance? That way I’m using the HELOC $ to allow me to gain the interest in the life insurance policy, free up the HELOC, then use the velocity banking method to pay down the loan from the life insurance policy. Do you see where I’m going with this?
You do know that the insurance company OWNS your cash value? Hence, the only way to get money out is to BORROW against it. In essence, you would be handing them the equity of your house. You really think that's a smart plan?
My question is, can this same concept, IBC, be achieved with a dividend participating Deferred Income Annuity (DIA)? My thoughts on this was, a DIA can be both qualified and non-qualified. Policy loans are allowed and one need not worry about this contract becoming a M.E.C nor would they have to worry about a premium. Any thoughts on that?
I believe annuities are designed for long term income and you still have to pay tax. The constant money going in and money coming out I’m not sure if an annuity would be ideal for that
Tax laws governing whole life policies changed in December of 2020. The companies will be able to move further out on the risk curve, and be able to return more money to policy holders. But in exchange they no longer have to guarantee a 4% return. That is my understanding anyway.
Correct I’ve got newer videos on my channel discussing new MEC laws and what it means for people implementing the concept moving into 2022. New guarantees industry wide will be anywhere from 2-3.75%
@@DenzelNapoleonRodriguez That's before fees/commissions are calculated. The real IRR is about 1.5%.....garbage.
@@astroman30 average IRR is anywhere between 2-4% once the policy is passed the first few years. Internal rate of return is to offset the borrowing costs to make an investment. I’m using the money twice creating arbitrage. If you learn how to create arbitrage like the banks do you can move a lot faster with your finances. This can be done with other assets as well.
@@DenzelNapoleonRodriguez Again, you're calculating before fees/commissions are implied. Look at the article by "Consumer Reports" on how the the true IRR is 1.5%,,,,garbage.
@@astroman30 I can show my internal rates on my policies. In the beginning years return rate is negative then it breaks even then gradually starts to go up stopping at about 4% maybe a little higher. The worst performing years are the beginning most agents leave that part out. It’s all about transparency.
Just watched your ad that brought me here. Excited to have found/been show your channel!
Happy your here I cover a lot of different topics so feel free to comment and ask questions. You can also join my private Facebook community for more in depth Q&A from other subscribers
Hey Denzel, love your content brother. I’m deciding between Penn Mutual and MM. I like your strategy, not sure if it matters in my situation because I don’t have any large debt. Penn Mutual is a Direct recognition company which I don’t love but the performance of the policy is so much better than the MM illustration for the same numbers. What are your thoughts?
I would look at actual performance over illustrated performance. If you look at the guarantees that will help with your decision process as well as ask your penny mutual agent to give you a real policy that has produced the dividends illustrated by the company.
If you structure properly the 15k that you’re paying each year can be tax deductible too!
I would be down but no agent wants to design a policy where the premium is at least 35-40% of the total amount I’m paying in. Im not willing to give up that much in cash value in the beginning years.
@@DenzelNapoleonRodriguez No I mean there’s another tax code that many agents are not aware of, if you structure your business correctly, all of the premium payments are tax deductible for the business.
@@passivedividendsoptions I know what you are referring to I still need an agent to do it. I think some agents call it a investment grade insurance contract or key man insurance you do it through your corporation. The problem I’m having is finding an agent who can design the policy for maximum cash value
@@DenzelNapoleonRodriguez I’m not personally an agent but have a contact that can structure them this way.
@@passivedividendsoptions you can send me an email I don’t mind I’m always open. Denzel@buildertocontributor.com
So, when you borrow from the policy, that amount gets deducted from the death benefit. That's how the insurance company stays in balance. Got it!
Correct
denzel do you have a whole or term from mass mutal for this example?
I have a whole life with mass mutual
Great stuff as always bro.
You're showing on the $28k cash value you'd earn 6%, so you're showing $1,680 showing up in that cash value in dividends. That is not what would show up, though. Your guy at IBC Global has lots of videos explaining how that rate is a gross rate, and breaks down what it would actually be. He typically shows the overall IRR at around 4%/year even after many years. I really don't think what you're outlining here would be accurate. What am I overlooking?
You are correct everything I did in this video was good except for the return of the 6% I’ve learned over the years. I have other videos where I’ve improved and do a better job outlining this kind of strategy
This is a video update on my numbers with the policy - ruclips.net/video/rOdIPZt3VJI/видео.html
Doing voodoo math again. The IRR will never be more than the loan rate so it is not a wash loan. If you don’t pay at least the interest back every year, guess what? Those interests will be compounded.
You are correct the sweet spot in my opinion is only borrowing a certain amount each year that does not compromise the policy. At some point we do pay the interest and principal back. I do not let it sit forever that would not be wise in my opinion. The other factor is what am I doing with the money once it is borrowed out and what is the savings or investment rate on that because that will help offset the interest. I definitely will get better on my delivery and messaging. I’ll keep working on that.
@@DenzelNapoleonRodriguez Seriously, who is paying you to pitch this nonsense?
@@astroman30 hello again good to see you. Major banks and corporations use cash value life insurance and offer employee retention plans, they will use the cash value to fund retirement accounts, health care plans, etc. The company will have access to the cash value and if the employee dies the death benefit comes back tax free to the company to help find another person to replace that employee that passed away or retired. I’m just copying what major banks and corporations do that’s all.
@@DenzelNapoleonRodriguez BOLIs are bought to fund employee compensation packages. Rich people (Warren Buffett) buy existing polices from old people so he can cash them in when they die. NONE of these scenarios are used as an investment. So, how does your example coincide with Joe 6-pack in meeting his "needs?" Joe doesn't have employees, nor is rich.
@@astroman30 as we’ve discussed before many times I don’t deal with average joe in regards to cash value life insurance especially if he or she is in major debt and low cashflow. I show average joe velocity banking first and how they can rapidly pay their debt off to increase cashflow and save money on interest faster. I then show average joe how to increase his income to the point where he can then fund one of these properly designed policies and have asset protection. I also have a ministry of finance I represent where average joe can syndicate his money with other average joes and together as a community we can acquire high cash value life insurance and creating major wealth in a shorter period of time all tax free.
With 2nd stimulus want to buy silver or gold but I don't very distrustful of a company. Can u recommend a legit company. I received 600.00 x 2 = 1200 today. Waiting on the 2k if it passes by the senate
ebay
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