should I own multiple life-insurance policies now this is a question that comes up a lot because
frankly there's a lot of information out there we often hear hey I should own multiple policies
because a certain individual recommended it or I read it in a book or if I look at Nelson Nash
who had 40-plus policies and he knew what he was doing he had them so I should just have a lot of
policies because he did without looking at the reason why so is having multiple policies a bad
thing in itself no a lot of good can come from that but we've got to make sure everything's
set up right so whenever we hear that question hey sure I own multiple policies or if I have
a policy for a year or two is it time to open a new one well let's look at the reason why we're
considering that so when we take any life insurance policy what I'll always look at
is before opening a new one do I still have the ability to continue to fund my existing policy
or can I add more to an existing policy what I don't want to do if I'm a consumer is just take
out a new policy because not that dot someone recommended it or we saw a video that made it
look good whatever it might be you know when you look at an actual life insurance policy the worst
part about any life insurance policy no matter how perfectly is designed how much we stuff the
cash value up front when do the worst part about it first and second year the reason why no matter
how low you squeeze that base premium what happens with a traditional product the traditional whole
life insurance product the insurance company is going to overcharge me for the base premium
typically in the first two years some products it's only the first year some it's the first two
three but main point is no matter what that dollar figure is the company is going to overcharge me
for it now once I get beyond the first two years that base premium whether it's three thousand
thirty thousand a year wherever I set it based on how much I want to pay in what happens to that
beginning year three comes back the cash value I make a premium deposit it's coming to cash value
it's compounding yielding dividends gets better and better so we have here the best part of a
policy is every year after the first and second year so the reason I kind of line it up in that
way is when we're looking at the idea of owning multiple policies should I own multiple policies
or do I use just one or when is it appropriate to open up a second policy well if I have room or
the ability to add funds to an existing policy and I'm beyond the first two years would I rather add
money to that and get more cash value coming back to work for me or open a new one and go through
the expenses again it sounds like a no-brainer but let's demonstrate so we've got an example up
here 35 year-old male policy how we always design it 1090 split all that good stuff but here we've
got a 30-year fund and we've got policy segments one and two where we see this frequently where
one will recommend funding a policy up to the neck limit for seven years and then stopping or
paying just the minimum base premium we've got additional Studies on this a lot of them in our
different training and subscription programs but meeting point is if I look at this policy 35 year
old male just pumping money into it for 30 years up until a 65 no MEC ever occurs we overinflated
the neck a little bit to make sure that wouldn't happen then what we did take the exact same policy
and demonstrate something we see frequently funding it for 70 years and then nothing
thereafter where I look at it and say well you easily can keep funding it why aren't we
what's the reason why we're not what we see this strategy recommended instead or hey you've done
you've funded this one up to the MEC limit and one could just have a misunderstanding of how the
MEC limit actually works but then they open up a new policy and we're max funding both policies
but here's the thing if I focus on the new year or the new policy right here let's look at the
new policy I pay in thirty thousand my cash value is twenty-six thousand three hundred forty dollars
okay so I've hated thirty I got back or I should say I have a negative cash value return of thirty
seven hundred or so almost four K versus if I just keep feeding the existing policy so exactly same
policies here I paint another thirty what happens there I get that thirty back plus another ten on
top of it goes grows from 226 to 266 I paid in 30 so another 10k on top of it as well so what's
happening here I'm beyond the first two years this minimum $3,000 base premium is coming back to work
for me year over year so what we did here just put the cash value differences which we should
only really look at here through year fourteen on this study if we continue to ladder I don't
use the word ladder if we continue to demonstrate this you'll see that one large policy pull further
and further ahead if we keep opening new ones main point though if I look at your seven of the
second policy we combined the values so you've got 225 from the first policy you're not paying
into it you 3:05 and attach value difference here is about 20 grand less than the bigger policy and
it'll continue to pull ahead over time and if I can keep funding that one so when the new policy
might be appropriate in this particular instance is if I started with this one and the max I can
pay into this one is 30,000 if I said okay I'm funding 30 I can still max that one out I want
to get the most use out of my dollar but I want to pay more now I want to pay in another 30 or
I want the ability to pay up to 100 well in that case it does make sense to open up a new policy
because I need the next base I need the room and the ability to fund more money to the policy
that's the important piece there so does it make sense should I hold multiple policies the accurate
answer is it depends on one's situation but my big thing is have the knowledge have the resource this
way I can make an educated decision and don't just buy one because we were told it's a good
idea without any data and then we end up finding out later hey I could have got more use out of my
money sooner and been in a better position hope this wasn't too confusing reach out any questions
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