so why would you consider cash value life insurance well to start why do individuals small
businesses and corporations consider cash value life insurance and how do they do it successfully
because what is so interesting is a lot of times we read about cash value life insurance whole
life universal life whatever it might be and some individuals say it is the best thing since sliced
bread put as much money as you possibly can here and other individuals say it is the worst thing
ever stay away from it it stinks so which is it and why do big banks corporations and wealthy
individuals put so much money here well but see exactly how everyone uses it we're going to look
at a couple quick examples here individuals small businesses and big corporations so we're going to
take a look at is some core benefits to a product and then then attractive features concepts how
is it used for example what I will mention is it is a cash value life insurance policy from
years of being in this industry and working with individuals small businesses and big corporations
they are I should say 99% of them are attracted to the cash value component the death benefit
the actual life insurance policy has a place don't get me wrong but it's not uncommon for me to hear
Steve I don't care about the death benefit yeah it's got a place especially long-term but tell
me more about that cash value how do I maximize it and we've got ten million videos on policy
design so if you really want the mechanics on how to maximize the cash of any life insurance
policy we have plenty of content on that so we're not going to go through it here but when it comes
to a cash value life insurance policy what are the benefits benefits to eat cash value itself
core benefits a cash value life insurance policy is a safe liquid and tax-free area to position
money safe money's not tied to the market I have a guaranteed floor or 4% often a company will
pay dividends on top of that so I'll receive a higher gross cash value interest rate than 4%
and it appreciates over time a way I'll a way that I'll often explain it is that regardless of things
going very well in the stock market in economy or things going very poorly that policy continues to
produce a consistent return or consistent cash value growth liquidity this is a major advantage
I can access whatever money I have in cash value often anytime I want there are some parameters
maybe you have to wait a year the particular company most companies let you access your but
your cash value within the first year if you want to but it is very liquid and it continues to grow
for me now one quick side note is depending on the type of policy I own as a corporation the
liquidity may or may not be there some policies are designed purely as a cost recovery plan and
an asset on the company's balance sheet and are not as liquid but for the most part products are
liquid or can be designed to be very liquid then I have tax benefits I did mention that
the cash value is tax-free what I will say I say this quite a bit is that it is tax-free if
I do everything properly meaning I don't trigger a taxable event I don't lapse the policy I don't
do anything that would result in me having to pay taxes on a policy we have quite a bit of content
on that if you'd like more information you can find it on our youtube channel website or just
reach out we can send you some information on it information on what can trigger a taxable event
some attractive features we can earn interest on our money while at the same time having access to
our money so this will tie in to how to use a cash value life insurance it actually relates
a lot to the infinite banking concept or becoming your own banker which focuses on the utilization
of money within a life insurance policy meaning once you pay a dollar into a life insurance policy
specifically the cash value of a life insurance policy that dollar is accessible and it's at work
from it's going to earn interest regardless if I just let that dollar sit and grow kinda like
a safe area to position money or if I pull it out I continue to earn interest on it as if I never
touched it in the first place now if you have not heard of this concept or idea in the past
it's a lot like real estate if you own a home as my artwork if you own a home or a piece of
property that's appreciating at five percent every single year like clockwork if you own that home
free and clear or if you have a line of credit outstanding against it will that ever impact
the 5% appreciation on the appraisal value now it doesn't matter if the appraisal value goes up the
appraisal value goes up the amount of equity I have access to is impacted from a loan same
thing with a life insurance policy you'll find the death benefits collateralized to do that
leveraging the cash value ties into the exact same thing meaning I've got money at work for
me I can pull that money out and I can invest in real estate I can pay off debt I can invest in my
business maybe I buy a car instead of financing it through an institution or a lender what's
also interesting is we can access the money very easily through a policy or you can also leverage
it through an institution and receive a loan from them we can collateralize our cash value or assign
it as collateral as collateral and obtain a loan at a very attractive interest rate in most cases
retirement income this has always been popular and it always will be popular in my opinion so
a huge draw draw in factor and this is on the individual side and real on the small business
and even corporate side of things is money a cash value if I do it right it's taxed for you
that means I can pull income out on a tax-free basis so forever I've seen life insurance sold
on that for that sole purpose in itself which is perfectly fine I mean that's great to do it's
good to be aware of how else you can use it the other benefits to mess it all together but it is
attractive in producing tax-free income that's the thing who knows what's gonna happen with
taxes this is a nice means to supplement income down the road that's tax free I'm gonna have to
worry about what happens with taxes that's the area of attraction to men and then you've got
the death benefit with an individual this serves an income protection I die that's money for my
family really bad handwriting it also serves as or I should say it's always paid out 100 percent
income tax free but it can also be used for for estate planning the death benefit proceeds are not
paid estate tax free however we can structure it within a trust in order to make sure it's paid out
estate tax for you but it has a place for small businesses often you'll see a buy-sell agreement
funded with life insurance scheme and team and policies are funded with life insurance policies
you'll see SERPs supplemental executive retirement plans utilized with cash value life insurance and
then for corporations a lot of times they'll use it for cost recovery so it's a great asset
on their balance sheet depending on the type of corporate policy used that's the one time you can
see a life insurance policy produce a positive cash value in the first year so for example if
they make a 10 million dollar deposit that might produce ten point three million in the first year
now it works differently than traditional policies from the tax benefits and liquidity
and such but the more information you have the more knowledge you have the better but the cost
recovery feature is if I'm a corporation let's say I've got 500 employees a thousand employees
however many employees often what am i doing for my employees paying their health insurance fully
or partially 401k matches other benefits that we can list them out depending on how much I elect
to cover and how much I have to cover point being a corporate own life insurance policy one serves
as an asset on the balance sheet continues to appreciate over time grows tax-deferred and
then the death benefit proceeds help recover the costs that I paid out to my employees my
executives over the years whoever those policies wrong point being I've got several benefits there
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