The Insurance Pro Blog Podcast releases new episodes each week that support professional life insurance agents and financial planners who seek to better understand how cash value life insurance, in particular, might work for the benefit of their clients.
Why Does High Early Cash Value Life Insurance Exist?
In the 11+ years, we've actively communicated with potential clients online, we've had quite a few people approach us who were looking at High Early Cash Value products. Typically whole life insurance with that sort of identifier in the product's name.
And it begs the question: why aren't we keen on offering that flavor of whole life insurance to everyone? After all, we are the guys that made blended whole life insurance popular online--a concept that seeks explicitly to maximize the acceleration of cash value accumulation intentionally. So, that being the case, why wouldn't we recommend a product that is, by its very name, engineered to do that right off the shelf?
There's a short answer, and that is that it (high early cash value life insurance) doesn't work very well for most people. But of course, there's a much longer answer that explains why that's true and why it's different from how we usually set up a policy for our clients. That's why you must listen to today's episode for a more robust explanation. Please take some time to listen, and if you feel inclined, send us a message.
If you'd like to find out how to get rich with life insurance even if you don't die, please click right here to get in touch with us; we'd love to help you determine if the concept might work for you.
An Episode About Infinite Banking That's Not About Infinite Banking
We realize the title is a bit confusing, please don't get hung up on that. It's a critique of a Dave Ramsey video on Youtube that's a critique of Infinite Banking...except that Dave's rant has nothing to do with Infinite Banking. It's a rant where he flails about how much he hates whole life insurance, the companies that sell it, and that anybody who suggests it as an option for their clients is lying scum.
Most of the time, we ignore the bald man from middle Tennessee. But we've had a few people ask us about his rant from a couple of years ago that you can find on Youtube where a caller to his show is asking about Infinite Banking. Dave never addresses his beef with Infinite Banking, but he lampoons everything related to whole life insurance. And insults the adviser who presented it to the caller.
In today's podcast, we walk through several of the points that Dave makes, and we point out where's wrong, misunderstands, and outright lies to the caller. It's good to be a financial advice guru with no responsibility to give accurate advice to anyone. We (and other advisers like us) must support and see through the plans we help our clients put in place.
If you'd like to explore the concepts of infinite banking and whole life insurance that can work to support that idea, please click right here to get in touch with us. We've helped hundreds of people who were looking for that very thing over the last 11 years and we'd be honored to help you as well.
Sometimes It Really IS About the Death Benefit
In most of our podcast episodes, we walk through the issues or the finer points of using cash value life insurance (whole life or indexed universal life) as a wealth accumulation source and preservation refuge for a substantial portion of your wealth. And that probably leaves some of you scratching your head. After all, it is life insurance that we're discussing here...there is a death benefit isn't there?
Well, yes there is and in today's episode, we're going to talk more specifically about the death benefit of life insurance. And we're going to make the argument that it's a bit more nuanced than most popular financial advice gurus would lead you to believe.
In fact, we're taking a look at a very personal situation and the impacts that NOT having the right approach to death benefit can have. Having the wrong priorities can be really expensive. Listen to the full episode to hear us walk through what may not be obvious.
If you'd like to explore your options for having the right amount and the right kind of life insurance to best serve you and your family, please click right here to get in touch with us.
Whole Life Dividend Announcements May Be Disappointing
This is the season for whole life insurance companies (mutual companies in particular) to make dividend announcements for 2023. With the significant rise in interest rates we've seen this year, you'd think that would have a positive impact on returns for life insurance companies. Right?
We all know that the vast majority of their reserves are invested in interest-bearing investments, mostly investment-grade bonds (just over 50% of all general account assets). So it would stand to reason that life insurance companies are now able to increase their overall investment yields as a result of higher rates. And that assumption is true, higher rates will lead to improved results in investment income.
But it won't happen immediately. Remember, life insurance company general accounts are massive and they've all been forced to invest in bonds with very low yields for over a decade. Of course, they're now buying assets with much higher yields but the lower-yielding assets have a dilutive effect. Meaning it will take some time for the new asset purchases to have a positive effect on their investment yields.
That's a long-winded way of pointing out that dividends are not going up in the short term. The trend is in place for dividends to increase in the years to come but don't be disappointed if you don't see your policy increasing dividends this year. So far, it's not happening and we don't expect to see any significant changes announced in the coming weeks.
If you've been thinking about purchasing a whole life policy or any other type of life insurance, we'd love to talk to you. Every day we help people from all over the country find the right policy whether they want to use it as a source of tax-free income, a personal bank to finance future purchases, as part of an estate plan, or to plan for future income needs of their family.
We have the experience to help you navigate your options and to help implement the right policy for you. Please click here to get in touch with us and to set up a time to discuss your particular situation.
How the Fees Destroy Indexed Universal Life Insurance
One of the oldest arguments meant to take down indexed universal life insurance (IUL) centers around the drag that fees (load charges, per 1,000 charges, and cost of insurance) have on the policy in years where the underlying index receives a 0% interest credit.
On the surface, it seems like a valid argument against using IUL as a place to warehouse and access cash. But we've long taken the position that a properly designed policy--that is one that seeks to minimize costs and maximize the return on cash--isn't in any real danger in a 0% year.
And now we have empirical proof of our position. We reached back into our client files and pulled a 10-year-old IUL policy that should theoretically be suffering from the last year (and some others as well) where the policy received no index interest credits.
The policy was designed correctly and we know this for certain because we designed it for our client. In spite of that fact, the client (for reasons that are irrelevant) chose to fund the policy much less than originally planned. Over the last 10 years, they've only paid about 30% of the aggregate premium that could have been paid.
Now, logic would tell us that the policy is languishing. But after running an in-force illustration, we are able to report a few things that will shock you.
If you want to hear all the details, you'll have to listen to the full episode.
And if you want to find out how a well-designed indexed universal life policy might work for you, please click right here to send us a message. We're happy to work with you to help you get the right policy with the correct design to meet your needs.
Annuities Are Back and Boy Are They Looking Good
For at least the past 10 years, maybe a little longer, pretty much everyone has ignored all types of fixed and income annuities. It's not that they were bad, they do exactly as promised and always have. But with interest rates near 0%, they just weren't attractive.
But things have changed and now we're seeing outcomes that we haven't seen in well over 10 years. Fixed-rate annuities locking in 5+% for 5+ years and single premium immediate annuities (SPIAs) paying out over 7% income streams on joint life expectancies.
We implore you...do not sleep on annuities as an option to add certainty to your retirement income plan. The good times are here again and even if you're years away from retirement, you should seriously consider allocating some of your portfolio to some sort of annuity to put an insurance company on the hook for adding some certainty and security to your future.
If you'd like to explore what an annuity might do for you, please click right here to reach out to us, we're seeing amazing results right now and we would love to help you figure out if using some type of annuity might work for you!
Wealth of info
It’s the end of the world as we know it
As a life insurance agent here in Long Beach, NY, I’m always trying to find easy third party sources to reinforce my concepts. Not only do these guys hit the mark on that, but I (and my clients) have learned a lot from these guys. Love(d) this podcast. Amazing insider information shared in an easy and fun way that common non-financial services professionals can get. Sorry to see you guys sailing off into the sunset, however kudos to sticking to it for as long as you did on a regular basis.
- Andrew Berman
Glad these guys are back on the air!! Great analysis and have learned so much about cash value life insurance since listening to them - they provide objective analysis - so don’t waste your time with financial ‘entertainers’ if you want to know the truth about cash value life insurance.