Your heirs can be millionaires about 3 weeks after you die. In this episode,
I'm going to address the question "How long does it take to get insurance proceeds?"
And so, put on your seatbelt. You're going to be blown away with some insights that you may have
never had before. But get ready. I will answer that question and expand upon your opportunities.
So, my name is Doug Andrew and I've been a financial strategist and retirement planning
specialist for more than 45 years. And so, I've helped many many people optimize their financial
assets, minimize taxes and empower what I call their authentic wealth. And I've also held not
only securities licenses and insurance licenses but I've helped a lot of people plan for their
future by using life insurance instruments primarily for living benefits. But many,
many people pass away sometime sooner than later because the reality is nobody's going to get out
of here alive. I mean out of this life, right? And so, when death occurs when you own life insurance,
I get asked questions all the time on this channel "How long does it take to get
the life insurance benefit, the proceeds, the death benefit after somebody passes away?" Or
"How long will it take my wife or my children?" And so, the quick answer is usually about 3 weeks
if there's no contestability going on. And if you file all the paperwork. So, I'm going to share
with you some ideas why many, many people use life insurance to actually endow their children, their
spouse, or a charity with millions of dollars of tax-free proceeds. And my own family, my children,
they'll be endowed with millions within about three weeks after I die. So, when people say,
"Well, Doug. What do you mean by there's the dumb way, smart way, and sad way to access money out of
a life insurance policy?" Well, I say, "Well, the sad way is obvious. It's one heck of a return but
I wouldn't recommend it." But I sometimes tease my wife and say, "Honey..." When she sees me going
away to Alaska fishing and she maybe is afraid that a grizzly bear is going to attack me and eat
me or something. I go, "Honey, do me a favor. When I die, if I get eaten by a grizzly bear,
would you promise me to sort of look down and look sad at my funeral?" She rolls her eyes. I said,
"Because you're gonna be loaded with cash in about 3 weeks." So, let me explain the process
to file a death claim. And I'm going to give you a couple of other insights on why you may
use more of your insurance capacity. So, when a death occurs, if you are the one claiming
the life insurance death benefit, you need to fill out a claim form. And so, you're going to
need a lot of information about the deceased social security numbers and what have you.
And when you send in the claim form, you need to accompany that with a certified death certificate.
And so, I often recommend to families because I've been there many many times
when they passed away or a few hours after or a day or 2. "Hey, this is your most inexpensive time
to order death certificates." Because a lot of people say, "Oh, I only need 2 or 3 of them."
No. I say, "Get get a dozen at least. You will be shocked how many times you have to
give a bank or a financial institution or somebody a certified copy and it's more expensive to
order them later from the state or the county wherever you're getting the death certificate."
So, get a couple of dozen copies if you really have a lot of claims and accounts that you're
going to go and prove that you need to take over and change the ownership of this account
at the institution. So, you send in that certified death certificate and you need to surrender or
give them the insurance policy. Now, a lot of people can't locate it. No problem. You fill out
one-paged affidavit that's the policy has been lost or destroyed and you can put that in. Now,
I recommend also if you have an obituary that you put in a copy of the obituary and so forth. Now,
if everything's in order once they have that it usually only takes 2 or 3 weeks to pay the
death claim. And they may give you a check if you ask for it in one lump sum or sometimes
people ask for it to be left with the insurance company earning interest. Because did you know the
insurance company will usually pay you interest on the death benefit. If it was a million bucks,
they'll be paying you interest on a million from the date of death. Until they give you the money
or a checkbook where you can write out checks uh with a million-dollar bank account so to speak.
So, they will credit you interest and then they will settle that with you in usually 2 or 3 weeks
unless the policy was taken out in less than 2 years before. Because most insurance companies
have a two-year contestability clause where they could contest if you lied on the application
about your health or something like that. Or for example, I had a client one time that he took out
a sizable insurance policy. And when I was filling out the application, he was sort of
coughing and says, "Golly, I've got this nasty cough it won't go away." Well, the policy was
approved. And the next day, he was diagnosed in fourth stage of Hodgkin's disease cancer.
Now, he lived about 13 months but it was within that two-year period. And they could not believe,
the underwriters, the insurance company that he didn't know he had a terminal illness when
he applied for the life insurance. So, they can contest it. But they asked for all the
doctor's records and everything and they realized, "Golly, he didn't know." And so, they promptly
paid the life insurance death benefit. So, that's called the contestability period.
After that period expires, no they can't contest it even if you lied. If you mistaked your age or
something like that, they may adjust the amount or deduct the premium you should have been paying.
But pretty much, it's over. In fact, usually suicide clauses expire within 1 to 2 years
that even if somebody takes their own life, the life insurance will pay after that expires. Now,
let me give you a few insights. Did you know that life insurance is one of the very few financial
instruments that when a death benefit is paid out, I don't care if it's 10 thousand 100 thousand,
a million, 10 million, I have delivered many many life insurance death benefits to widows, widowers,
families, children, charities, boy scouts of America, whoever they named as the beneficiary.
Here's 2 big benefits of life insurance proceeds: When they are paid out to the named beneficiary,
they are totally income tax-free. Now, in a family, it could cause the estate to go over maybe
the estate tax limit. They could make the estate tax be doing payable on life insurance proceeds.
But life insurance is always income tax-free that is protected under section 101 A of the
internal revenue code. It's been a sacred cow for over 107 years of the recording of this episode,
okay? Because you are providing the wherewithal to be self-reliant to your widow, the orphans
that you're leaving behind. And so, the government realizes this is saving them money. Why would they
tax something that would end up causing them to have to provide more welfare benefits or whatever?
So, life insurance is tax-free. Hello? Well, not only that. The money, the cash value inside the
insurance policy is tax-free, if you need it for living benefits, for retirement benefits.
When I structure a life insurance policy, I do the opposite of what most Americans do.
Most Americans try to get at the most insurance for the least premium. No. I get the least amount
of insurance the IRS will let me get away with and I put it the most premium that the IRS allows as
fast as they allow and it turns into a tax-free cash cow. So, this is where I accumulate my
retirement and knocks the sox off of ira 401Ks. I've averaged between 7 to 10 percent tax-free
rates of return. Every time I put in let's say 100,000, the 100,000 doubles to 200. 200 doubles
to 400 about every 7 to 10 years. If you do the math, that will knock the socks off of an IRA,
401K which is taxable at the end of the day. So, let me give you a secret. When you take out life
insurance, okay? If you're taking it out on your life, you're the insurance. You usually
are the owner but you don't have to be. There's a beneficiary. And when you take out life insurance,
you must prove to the insurance company underwriter that the beneficiary you're naming
will suffer an economic loss by virtue of your death. Okay? You just can't take out a bunch of
life insurance for nothing to make somebody rich. You must prove that they will be dependent. They
will suffer economically. It's called an insurable interest. Most people underutilize their insurance
capacity. When I was 30 years old, my wife and I had 6 children. If I was making 100 grand a year,
I can get insurance for up to 30 times my income. No more, okay? So, I could have
qualified for 3 million. That if I died, my wife would have 3 million dollars to have the kids get
their music lessons and do things go to college that I would have provided had I stayed around.
The older you are, when you're 60, you maybe only can have 6 to 9 times your income or one
times your net worth. Well, a lot of people say, "I don't need insurance anymore. Because if I die,
there's just my spouse and she's there's enough money." I go, "Quit looking at what it is.
Look at what it does." So, for example, if I have several million dollars of capacity because of my
net worth or my income, when I was 50 years old, I had a serious talk with my kids. I said, "Kids,
I have news for you. Your dad is not immortal." What? "Someday I'm going to die." Now,
if I have capacity, I'm not using, kids I want you to buy a policy on me for 500,000 or a million.
Do the math. A thousand bucks a month into a million-dollar life insurance policy on
me, my kids, or me on my parents. Do you know I've owned life insurance on my father? I
couldn't on my mother, she had heart attacks early in life. On my father-in-law, my mother-in-law. Do
the math. What that allows you to do, if a child put $1,000 a month into a million-dollar policy,
it grows tax-free. They can use for retirement. But whenever I die, they're automatic millionaires
in about 3 weeks. Reverse engineer the math. An IRA or 401K would have to be earning 12,
13, 14 percent for 30, 40 years to generate the same amount of money tax-free. An IRA, 401K would
have to have a million and a half in it to net people a million after paying tax. Think about it.
Your kids could be millionaires in about three weeks after you pass away. So, as I've mentioned,
I've been a financial strategist for more than 45 years. I've been very blessed to have written 11
books thus far. One became a new york times wall street journal number one bestseller. My most
recent bestselling book is in its sixth printing. I want to gift a copy of this to you free. It's
called The Laser Fund. And it talks about what I've been sharing with you. How you can maximum
fund an insurance contract for living benefits, tax-free or when you ultimately pass away.
The Laser Fund stands for liquid assets safely earning returns. It's actually two books in one.
This white covered side is about 200 pages, 14 chapters of all kinds of charts graphs
and explanations. If you're more right brain, you flip the book over and you read this one.
This one is 100 pages, 12 chapters with 62 chicken soup for the financial soul stories. So,
if you want to use your whole brain, read both books. But I would love to gift you a copy. I'll
pay for the book. Go to laserfund, (L-a-s-e-r) laserfund.com. You contribute a nominal amount
towards the shipping and handling. I'll cover the rest of that and I'll cover the book, the
cost of the book. I want to empower you with this knowledge and information that is so critical.