So, do you need a lot of money to start a high cash value life insurance policy?
Well, the the short answer is no you don't it all has to do with the ratios.
How much do I want to pay into a policy?
How much do I want the ability to pay into a policy on any given year?
But we're going to go into some detail here. We're going to look at several examples.
So, we'll have a number of videos that will follow this
one but to kind of set the stage as far as what we are going to go through because we do get questions on this
quite a bit. Do I have to have a lot of money or what's the ideal amount of money because
regardless of what one situation is right whether someone's paying in two hundred dollars per month or two hundred thousand dollars per year
is if we construct a policy for
maximum cash value
flexibility
if we have the need or want for a certain death benefit, we see how we can accomplish that as well
regardless
of what the numbers are it can all be customized to fit my personal situation. So
for example, we're going to look at these three examples beginning with a 25 year old looking at
$ 200 per month up until he's age 65 for 40 years
and the question we're really going to consider and this is going to be consistent with each of the series. Each of the videos is
if I'm paying in two hundred dollars per month
do I maximize that two hundred dollars from day one?
Meaning do I squeeze a policy do I squeeze the premium as low as possible? Do I set the MEC limit
at close to twenty four hundred dollars per year a little bit over inflated. Do I optimize it for maximum cash value?
Or do I construct it with a higher death benefit?
Maybe I want a higher death benefit. I have a need for more life insurance
perhaps
I want the ability
to add more money down the road
right. So for example, I might want to start with two hundred dollars per per month
but if things go, well, I might want to add up to $ 5,000 per year perhaps 10,000
so that's the kind of things we like to go over and we're going to show in all these case studies
right what I want to know whether I'm 25 35 or 50 is if I'm paying in take our 35 year old for example
If I'm paying in 5,000 per year for 20 years first, what's it look like when I maximize a policy?
I optimize every penny of that five thousand dollars that's option one. Then option two would be
what's it look like if I build in say a
two thousand dollar base premium
and a twenty thousand dollar MECH limit
so now I have the ability to add another fifteen thousand dollars per year on top of the 5k I'm presently paying
what are the pros and cons to that because if I build in that extra room?
How do I raise the MEC limit? It has a direct relationship to my age and death benefit. So, if I raise the death benefit
is that just something I can do for free?
No, there is an added cost there. There's a cost of insurance
so really what I like to look at is hey if I'm going to
pay five thousand dollars per year into a policy if I look at this example
what's it look like if I maximize it?
Compared to building in more window room how much more or less cash value do I have in one of those scenarios compare and contrast?
So I can see
the actual dollar amount that it costs me
rather than just say it's a good idea or we should do it this way now
I like to see it up front who doesn't I mean, this is our money. We're paying into a policy
so in this case study
I should say these case studies. We're going to look at what we just mentioned 200 per month for a 25 year old
Max funding the policy from the start
then building in window room to add more
we're going to have about a 5k limit in the example when we build in more space
actually, it's a 10k limit
over here what we just mentioned 5k per year maximize the policy and then build in a 20k MEC limit
And then over here age 50 10k going in for 10 years
max funded from the beginning optimize the 10,000 and then build in room
to pay up to $ 25,000 per year
that's the main thing right because we always hear "hey, should I
maximize my policy and if I have more money, I can just open up a new policy down the road"
you could absolutely do that. But what we like to consider is hey, what does it look like if I max up my policy now?
Open up a new one down the road or
fund a policy now build in a little bit of extra window room so I can throw more money into it down the road
once I'm over the initial insurance expenses
and there's no
right or wrong answer. I mean I'll tell you the individuals
we work with some have 10 plus policies some have one or two policies
it's all relative to what we are trying to accomplish
but what I will say is that we always like to show the options because the last thing
that you or I or anyone wants is to be presented a policy.
Looks good I buy it but then find out after the fact that I could have got a better deal somewhere else
however, it is so cash value life insurance policies. I'm buying a new laptop a phone whatever it might be the transparency
I've got to be upfront with everything this way. I can make the best decision from the get-go. So
to our original question. Do I need a lot of money to open up a policy? No, not at all
we're going to look at different options here. Hope you enjoy and as always reach out with any questions.
Hey guys Steve Parisi here
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