I usually don’t comment or like RUclips videos but I must say that this video was VERY informative and I absolutely LOVED it. Help me get a better understanding. This was great
15:10 Hello I was confused here, can u help me understand. They still have to pay their premiums but I see that their annual outlay is $0. If they still have to pay their premiums, how is the annual outlay at $0
the same company with different options, with everything set up right the way for maximum cash value, whats the difference from the 1st and second option? company B has two options
is there a reason a policy would not reap 90% in cash value if it had a pua? i had someone say they would structure for max cash value, but the cash values are less than the yearly payment, and seem to be the same value yearly.
Thanks again for the information Steve! By the way, do you know how I can go about selling the same policy designs on behalf of the biggest and oldest insurance companies in Canada? I’m a 24 year old who previously sold standard whole life insurance, leaving the industry because I didn’t like what I was selling to people. I’d love to get back into the industry in Canada selling these type of policies but there is little information on the subject in my country. As far as I know the top insurance providers in Canada are Manulife, Canada Life (subsidiary of Great-West Lifeco), Sun Life Financial, Desjardins, and IA Financial Group (aka Industrial Alliance), as well as smaller insurers including those operating as subsidiaries of banks, such as CIBC Insurance and TD Insurance. Any info would be appreciated!
Good question. We are not familiar with the laws in Canada so we would not be able to help much. We have spoke with a group in Canada before that designs policies for maximum cash value. I've included a link below. - ibcglobalinc.com/canada/
Thank you for your videos! I had a question regarding the dividends of whole life policies. It looks like they have historically gone down. Is there a reasons they have continually gone down? Do you see it continuing that way? And is that something to be concerned about?
Good question. Dividends are related to where an insurance company is investing. Insurance companies will stick to safe assets (you'll always see bonds in the portfolio). As interest rates have gradually decreased since the 1980s, safe assets that pay attractive returns have come down as well. In the event interest rates rise and assets are available for insurance companies to purchase, it is possible that we could see dividend rates increase. I've included some content below that provides more information on this. - ruclips.net/video/NCo3Q5dwoQA/видео.html - ruclips.net/video/yWhelowiEWs/видео.html
Good question. Converting a term policy to whole life can be a good strategy, but some companies have limitations that may result in a higher base premium than one would like. Below are two videos that provide more information on converting term policies. - ruclips.net/video/Z_1e6VRDJP0/видео.html - ruclips.net/video/sE3SeKJZjpk/видео.html
Good question. You can draw the cash value tax-free, but it is possible that taxes can occur. I've included a few videos below. - ruclips.net/video/J0nT1m15NvI/видео.html - ruclips.net/video/i5ITdAata7o/видео.html - ruclips.net/video/1qodgDQA7Qg/видео.html
Great question. Not necessarily. The MEC limit is sometimes set higher than the annual funding if one plans to fund a policy for a long time (20 years +). Of the 20k/yr you are paying, I would look for the annual base premium in the illustration. If preferred, you can email us a copy of the illustration at info@ibcglobalinc.com
The rate of return for a whole life policy is only 3-5% which is nothing to get excited about. What happens to the cash value and the death benefit of the policy owner's untimely death? Does the beneficiary receive both?
3-5% isn't anything to get excited about?! I'm not sure if this is a parody comment or not. How much is a person earning in a checking, or savings, account? Because for the people who use Whole Life in the manner of this video use it like a savings account. Stuff it with as much money/savings as possible. It's not an investment. If you want to invest then use the Whole Life policy as the middle man. Send money into the policy, then use a loan against it to invest. Can be used for literally anything you want. All the while earning tax free growth 🙌.
The “what happens to the cash value” question, and all the question variants, is a common talking point used to try to confuse the consumer. Think of the death benefit as your home value and the cash value as your home equity. What happens to your home equity when you sell your home? Same difference with whole life policies.
Thanks for the comment! Below is a video that provides data on the average returns of whole life policies. To set expectations properly, we state 3-5%. The liquidity and tax benefits often provide more value to policyholders. At death, the net death benefit is paid out to your beneficiary, however, the death benefit will grow with your cash value. I've included a video that provides visuals on this point. - ruclips.net/video/ZfOC3gg56Rs/видео.html - ruclips.net/video/NaUVV5g9mmw/видео.html - ruclips.net/video/I-c_WEXOcw4/видео.html
You'll have to decide on either an average amount, or maximum amount, you'd be able to put in each year. The goal is to get as close to the MEC limit as possible. If you can't hit it a couple years then so be it, try to make up for it in the next couple. The difference in term cost isn't THAT big. I mean, it'll make a difference of course, but the goal is to get money into the account via PUAs.
@@justsomeguy2943 If your income deviation is that large, I'd opt for a larger "term rider" to allow you the room to pump money into PUA. Some years it won't project to the perfect/ideal IRR, internal rate of return, but such is life. Doing it this way will still be cheaper than having you open another policy to put additional funds into.
@@justsomeguy2943 You put money into a whole life policy in one of two ways. Either Base Premium or Paid Up Additions (PUA). Think of it as money you're REQUIRED to put in to keep the policy active, Base Premium, vs EXTRA money you throw into the policy to start earning/boosting IRR of the policy, PUA. Because it's an insurance policy the amount you're allowed to put in is tied to your death benefit amount. Because it's an insurance policy the returns are allowed, per tax code, to grow tax free. Think of it like a Roth IRA. The money you put in has already been taxed, so you don't have to pay any taxes on the return you make in the policy. There's two major ways to increase the death benefit payout, ie allow you to put more money into policy. The Base Premium and the "Term Rider". The base premium has been described above. It's the initial/required amount to give the actual life insurance policy. And it's expensive. The Term Rider is just a relatively cheap term insurance add on that does NOTHING but boost the death benefit. There's no cash value component of the term. But Term insurance is CHEAP. So because Term Insurance is cheap it's a very cost efficient way to RAISE your death benefit payout. Which is what determines how much money you can put in. So the term rider is what allows you the room to stuff a bunch of PUA payments into the policy beyond the Base Premium.
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I usually don’t comment or like RUclips videos but I must say that this video was VERY informative and I absolutely LOVED it. Help me get a better understanding. This was great
Wow, thank you!
15:10 Hello I was confused here, can u help me understand. They still have to pay their premiums but I see that their annual outlay is $0. If they still have to pay their premiums, how is the annual outlay at $0
Excellent!
Thank you!
Awesome video! Can person with low income get a policy designed like that? What is lowest a premium payment can be for that type of policy?
Thanks Tim! I've included a video that provides information on smaller policies.
- ruclips.net/video/y2kf88aQu1I/видео.html
the same company with different options, with everything set up right the way for maximum cash value, whats the difference from the 1st and second option? company B has two options
is there a reason a policy would not reap 90% in cash value if it had a pua? i had someone say they would structure for max cash value, but the cash values are less than the yearly payment, and seem to be the same value yearly.
Finally something well explained.
Thank you! :)
IS GOOD YOUR EXPLANATION BUT THE BOARD IS IN BLUE DOESNT SEE THE NUMBERS WELL
Thanks for the feedback. I might try refreshing your browser or restarting your computer. I had a similar issue with my device in the past.
Thanks again for the information Steve! By the way, do you know how I can go about selling the same policy designs on behalf of the biggest and oldest insurance companies in Canada? I’m a 24 year old who previously sold standard whole life insurance, leaving the industry because I didn’t like what I was selling to people. I’d love to get back into the industry in Canada selling these type of policies but there is little information on the subject in my country. As far as I know the top insurance providers in Canada are Manulife, Canada Life (subsidiary of Great-West Lifeco), Sun Life Financial, Desjardins, and IA Financial Group (aka Industrial Alliance), as well as smaller insurers including those operating as subsidiaries of banks, such as CIBC Insurance and TD Insurance. Any info would be appreciated!
Good question. We are not familiar with the laws in Canada so we would not be able to help much. We have spoke with a group in Canada before that designs policies for maximum cash value. I've included a link below.
- ibcglobalinc.com/canada/
Thank you for your videos! I had a question regarding the dividends of whole life policies. It looks like they have historically gone down. Is there a reasons they have continually gone down? Do you see it continuing that way? And is that something to be concerned about?
Good question. Dividends are related to where an insurance company is investing. Insurance companies will stick to safe assets (you'll always see bonds in the portfolio).
As interest rates have gradually decreased since the 1980s, safe assets that pay attractive returns have come down as well. In the event interest rates rise and assets are available for insurance companies to purchase, it is possible that we could see dividend rates increase. I've included some content below that provides more information on this.
- ruclips.net/video/NCo3Q5dwoQA/видео.html
- ruclips.net/video/yWhelowiEWs/видео.html
Can the premiums on a 10/90 policy be monthly instead of annual?
Great question! Yes, this is possible. Some will elect to pay the 10% premium monthly and add PUAs at leisure.
Have a 10 year term that allows conversion to whole life, would that be a good way to build cash value?
Good question. Converting a term policy to whole life can be a good strategy, but some companies have limitations that may result in a higher base premium than one would like. Below are two videos that provide more information on converting term policies.
- ruclips.net/video/Z_1e6VRDJP0/видео.html
- ruclips.net/video/sE3SeKJZjpk/видео.html
Awesome explanation!!!!!!!!$$
Cash value can be drawn down tax-free?...ie retirement income...
Good question. You can draw the cash value tax-free, but it is possible that taxes can occur. I've included a few videos below.
- ruclips.net/video/J0nT1m15NvI/видео.html
- ruclips.net/video/i5ITdAata7o/видео.html
- ruclips.net/video/1qodgDQA7Qg/видео.html
If I pay, let's say 20k a year in premiums and my MEC limit is 36k, does that mean I have a 60% to 40% ratio of Premium to PUA?
Great question. Not necessarily. The MEC limit is sometimes set higher than the annual funding if one plans to fund a policy for a long time (20 years +).
Of the 20k/yr you are paying, I would look for the annual base premium in the illustration. If preferred, you can email us a copy of the illustration at info@ibcglobalinc.com
Great video 👍🏻👍🏻👍🏻
Thank you! :)
The rate of return for a whole life policy is only 3-5% which is nothing to get excited about. What happens to the cash value and the death benefit of the policy owner's untimely death? Does the beneficiary receive both?
3-5% isn't anything to get excited about?! I'm not sure if this is a parody comment or not.
How much is a person earning in a checking, or savings, account? Because for the people who use Whole Life in the manner of this video use it like a savings account. Stuff it with as much money/savings as possible.
It's not an investment. If you want to invest then use the Whole Life policy as the middle man. Send money into the policy, then use a loan against it to invest. Can be used for literally anything you want. All the while earning tax free growth 🙌.
The “what happens to the cash value” question, and all the question variants, is a common talking point used to try to confuse the consumer.
Think of the death benefit as your home value and the cash value as your home equity. What happens to your home equity when you sell your home?
Same difference with whole life policies.
@@jrod7929 ‼️‼️‼️‼️‼️‼️‼️‼️🙏🏾 right...
Hell of alot better than .0001%
@@WayOutWestCali very nice analogy
Thanks for the comment! Below is a video that provides data on the average returns of whole life policies. To set expectations properly, we state 3-5%. The liquidity and tax benefits often provide more value to policyholders.
At death, the net death benefit is paid out to your beneficiary, however, the death benefit will grow with your cash value. I've included a video that provides visuals on this point.
- ruclips.net/video/ZfOC3gg56Rs/видео.html
- ruclips.net/video/NaUVV5g9mmw/видео.html
- ruclips.net/video/I-c_WEXOcw4/видео.html
This is profoundly helpful and I'm kinda upset I'm just finding out about it at my age.
Thank you! I'm glad it is helpful!
Steve,
What if my yearly income is inconsistent but I want to maximize my cash value?
You'll have to decide on either an average amount, or maximum amount, you'd be able to put in each year.
The goal is to get as close to the MEC limit as possible. If you can't hit it a couple years then so be it, try to make up for it in the next couple. The difference in term cost isn't THAT big. I mean, it'll make a difference of course, but the goal is to get money into the account via PUAs.
@@jrod7929 Thanks, but what if I have MORE money? PUAs on a year to year basis?
@@justsomeguy2943 If your income deviation is that large, I'd opt for a larger "term rider" to allow you the room to pump money into PUA. Some years it won't project to the perfect/ideal IRR, internal rate of return, but such is life.
Doing it this way will still be cheaper than having you open another policy to put additional funds into.
@@jrod7929 Thanks, J. What's the difference between a term rider and a PUA?
@@justsomeguy2943 You put money into a whole life policy in one of two ways. Either Base Premium or Paid Up Additions (PUA). Think of it as money you're REQUIRED to put in to keep the policy active, Base Premium, vs EXTRA money you throw into the policy to start earning/boosting IRR of the policy, PUA.
Because it's an insurance policy the amount you're allowed to put in is tied to your death benefit amount. Because it's an insurance policy the returns are allowed, per tax code, to grow tax free. Think of it like a Roth IRA. The money you put in has already been taxed, so you don't have to pay any taxes on the return you make in the policy.
There's two major ways to increase the death benefit payout, ie allow you to put more money into policy. The Base Premium and the "Term Rider". The base premium has been described above. It's the initial/required amount to give the actual life insurance policy. And it's expensive. The Term Rider is just a relatively cheap term insurance add on that does NOTHING but boost the death benefit. There's no cash value component of the term. But Term insurance is CHEAP.
So because Term Insurance is cheap it's a very cost efficient way to RAISE your death benefit payout. Which is what determines how much money you can put in. So the term rider is what allows you the room to stuff a bunch of PUA payments into the policy beyond the Base Premium.
Company A is Guardian lol😁😁🤓🤓🤓🧐
😁
I’m interesting