Own your insurance. Be self-insured. In this episode, I am going to share "Don't
buy your life insurance until you watch this entire video". Get ready to be blown away.
So, I'm Doug Andrew and I've helped many, many people
choose the right kind of insurance especially life insurance now for more than 4 and a half
decades. So, the purpose of this video is to educate you and I would strongly recommend
anybody that you know that is considering buying insurance, watch this video. So, share, comment,
click like, subscribe to my channel because what I'm about to share with you
will make a huge difference on how you should own your insurance, become self-insured.
So, get ready. I'm going to explain the three types of insurance and what you can do instead
of paying for your insurance. How you will own it and become self-insured and how you can have your
insurance become cheaper as you get older. So, there are basically 3 types of life insurance,
term insurance where you pay just the pure cost of the chance of you dying, that's the mortality
cost. There is whole life insurance that allowed people to be able to sort of overpay the younger
years in their life. And then underpay later on by paying a level premium that build up equity
or cash value in the policy. So, you could pay a level premium your whole life instead of having to
pay a higher premium every single year with pure term insurance. Well then, there's a third type of
life insurance and that was actually designed for life --for living benefits not just death benefit.
So, when Ef Hutton came up with this idea, it wasn't term insurance. It wasn't a whole life.
It was universally applicable to all kinds of situations if you want to save for retirement
and use it for death benefit so they called it universal life. It was incredible. So,
this is max-funded universal life is the third type of insurance. That came out in 1980 and
it was the brainchild of EF Hutton. They were not an insurance company. They were a brokerage firm.
And they began to realize, "Whoa, wait a minute here." Life insurance is this tax-free sacred
cow in the internal revenue code now for over a century that allows people to accumulate that
cash inside the insurance policy tax-free. Why? Because the government wants to incentivize people
to protect themselves. So, if they happen to die, their widows and orphans won't be dependent upon
the government. So, it's allowing people to have tax advantages on the death benefit but also on
the cash inside of it because people are taking ownership. So, that concept of taking ownership
took hold in 1980 and EF Hutton said well let's use it for people's retirement because back then,
they were telling people buy term insurance invest the difference and maybe you'll earn 12%. Well,
maybe. In actuality, most people who have money in the market could earn 6 to 9 percent if they
left it there, if they bought and held their money there. Most people don't do that. They
get nervous when the market goes down and they sell low and then they wait, wait and buy high.
So, Dalbar who studies investor behavior reveals that most Americans only actually
earn 3.5%. That's pretty pathetic. So, EF Hutton said, "Even if you could earn 12,
at the end of the day, you're only going to net 7 or 8." Because if you're earning 12% and you have
to pay tax on that growth, on that income; sooner or later like with tax-deferred IRAs and 401(k)s,
you're not netting 12. You are only netting 8 in a 33% bracket. If you had a million dollars for
example and you're earning 12% that'd be 120,000. You pull out 120,000 out of an IRA, 401(k);
you have to pay tax between federal and state taxes of about a third or 40,000. You're only
netting 80,000 to buy gas and groceries, does that make sense? Most asset managers charge 1%.
Asset management fee every year on that nest egg, on that million. That's another 10,000. So,
you're really only netting 70,000 after taxes and fees. So, EF Hutton back in 1980, they said,
"Why don't we just earn 11 and net 10 inside of an insurance company because
they're safer? They're less volatile. Your money's not at risk in the market."
And so, you earn 11 and one of those percentage points needs to pay for the insurance that
the irs says has to be there if it falls under tax-free insurance in the internal revenue code.
See, if it moves over to a taxable investment, you just lost all of that. In order to do that,
you took the least amount of insurance the IRS would let you get away with and you put in the
most money the IRS allows as fast as they allow and it turns into a tax-free cash cow.
So, in essence, when this first came out in 1980, I thought, "Wow, this is Buy Term,
Invest The Difference on steroids because it's under a tax-free umbrella." Long story short,
I had people putting in 10 thousand, 50 thousand, 500 thousand. They put in 500 thousand,
they're earning 11%. They never earned less than 11 and three quarters from uh 1980 to 1990,
in fact. They earned as high as 15 and a half. But if you earned 11, you netted 10.
That 1% was the cost of the insurance that made the whole thing tax-free. Well, I would rather
earn safely 11 and net 10 than to have to earn 15 or 16 to 10 in mutual funds of the stock market.
Because most the time people at best would only earn 12 and net 7. So, what would you rather have?
A net of 7 after tax and fees or a net of 10 after insurance costs and fees. Are you getting it? So,
this is why you want to own your insurance, take the least amount the IRS will let you get away
with putting the most money. And all of a sudden, it becomes like a financial swiss army knife. You
can use insurance for retirement planning, for college funding, for your kids and grandkids. It
knocks the socks off of a 529 plan. For business working capital, for real estate management,
emergency funds, pension maximization if you're a school teacher. All of these uses for this because
it allows you to accumulate your money tax-free, access your money tax-free. And when you die,
anything left in there blossoms and transfers income tax-free. Can you think of anything else
that does that? This is why it's the dream solution for so many goals. And people go,
"Well, I've never seen one that does that." Well, sometimes when I hear advisors say that,
"Oh, that's your reasoning? Because you've never seen one designed? You've never seen one that is
structured to get cheaper as you get older?" Yeah, my insurance gets cheaper as I get older because
when I put the money in there, it qualifies as part of the death benefit. And within 15 years,
basically, it costs very, very little. If I earned right now on policies that I've had for 30 years,
I'm 30 years older, it cost me 120th what it did 30 years ago. Because the amount of insurance
that I'm paying for got lower as my cash took the place of the death benefit. If you want to
learn more about how this happens to where if I earned 11% this year like I have many years,
I would net point 10.95. It gets cheaper as I get older. My rate of return gets better
retroactive back to day one. That's what I mean by self-insuring. When you self-insure yourself,
you will be able to own insurance and your own money will actually be the insurance. Because
that's the goal when people say buy term, invest the difference. And when you finally get enough
money, you can let go of the term insurance. That's basically what you're doing here. Your cash
is growing faster tax-free to where at the end of 15, 20 years, you basically own your insurance,
you've self-insured. And it's all your own money but it's tax-free because it's still protected
under that umbrella. Is this making sense? So, let me show you how you can learn more about this
profound strategy that unfortunately only the wealthy seem to understand and use the most. So,
let me connect the dots. And as I do this, if this is intriguing you, feel free to share with someone
else who want to hear this. Click like or comment. Subscribe to this 3-Dimensional Wealth channel
because I post an in-depth answer to a financial question almost daily, okay? And it's free. So,
you need to ask yourself what is the purpose for the insurance. Is it just for death benefit?
Or is it for living benefits? Or is it for both? You could use any one of the 3 types if it's just
for death benefit. But if you want to use it for death benefit and for living benefits and you
want to structure it to be the least expensive insurance you will ever own, I would recommend
maximum funded universal life and I would use indexed universal life because that way, your
money will grow when the economy does well but you will not lose when the economy goes down because
your money is not at risk in the market. So, when we look at this, if you buy term insurance and you
end up needing insurance later on, can you believe that the biggest purchasers of life insurance
are people over age 70 who have tons of money? Why? I explained that in other episodes.
It's because where else could they put money and have it grow tax-free create tax-free income and
when they die it doubles or triples instantly and transfers tax-free? This is where wealthy
people put their money. So, if you simply buy term insurance, that's like renting. If you want
to own your insurance, okay? I'd rather own a home than rent it because I'm building up that equity.
Does that make sense? But you want to own it the right way. If you're doing it for living benefits,
hands down, max-funded index universal life will outperform whole life insurance
with the same premium, okay? I can usually earn at least 2 to 3 percent higher rates of
return on universal life than whole life. You will understand why in our most recent bestselling book
I show you the difference here with my two sons who are co-authors with me on this book. And so,
in a nutshell, you're trying to get the least amount of insurance you can get away with under
IRS rules, put in the most money but you have all kinds of flexibility to use it for goals such as
retirement. Most people when they understand it, they use it for tax-free accumulation, access and
transfer for retirement but also for all kinds of other financial goals. When you do this, then
every million dollars that you accumulate inside of an insurance policy which I call the Laser Fund
can generate 60 thousand, 80 thousand, 100 thousand dollars a year of tax-free income
for as long as you lived if you live to be 120. And when you die, it blossoms, transfers down to
your family. They put it into their own laser funds. And then later on when they die,
it blossoms again. This is how we fund our family bank into perpetuity. Every time somebody passes
away in our family, we allocate a portion of that death benefit because it's tax-free
into tax-free Laser Funds for the next generation. And our family bank is what I call it goes...
We'll never run out of money because we are harnessing the power
of owning insurance. And that's why i wanted you to watch this video because you probably went,
"Whoa! I've never thought of this before." So, here's how you can learn more. If you click
below or go to laserfund.com (LASERfund.com), but the easiest way, just click below. There's
a link there where you can claim your free copy. I want to gift you a copy of this 300-page book.
And it's actually 2 books in 1. See this? This one is 200 pages but
that has all kinds of charts and graphs. If you're a right-brain thinker, you turn it over and read
this one. This has 62 actual stories. But I want to empower you on how to diversify and
create the foundation for a tax-free retirement by using (what?) life insurance. So, don't you dare
buy life insurance until you have watched this video and shared it with others. And then you will
be empowered on how to own your insurance, to be self-insured. Does that make sense?