So this is a life insurance policy? Don't pay any attention to the structure or Anything else now mind you in this case it may or may not be. Oh, it's not even let's forget about the fact is 15 years old it year. One.
The idea is just the cash value and it'll be slightly different. You know for somebody older, but you know theoretically, for your average person, this is probably 30 or a 40-year-old uh that has all of this debt so and even then uh. Some people take these out on their kids.
⏩ MORE: Whole life Insurance Explained - Investment or Scam?
This that's what this one was Uh or someone that was taking one out on their kid, and you know this can be their college fund or help pay for college. Not your college is so expensive. Nowadays it can help with all of that.
It could maybe be something that they could use to help them buy a car in the future. The point with all of this is the idea of cash accumulation How you can use it as savings and how you can also gain the dividends where you're getting the tax advantages of being tax-free. If it's done right and any agent who's going to help, you do this who's going to help you do the debt elimination who's going to do uh, infinite banking type of situation? Uh, you know whatever you, whatever you're calling it uh be the bank whatever.
There's all kinds of different uh labels out there, but infinite banking was the first one uh out you know in theory. So the idea is: is that you're? Looking at this and so say in a year, one you're saving money um? This is five thousand dollars. Many people put away more, they put away less, but this is just for demonstration purposes, and you know in this case we're just kind of looking at how things start and where They, you know where they get, but just to give an idea.
How to use a Cash Value Life Insurance policy to eliminate debt
So they paid a total over the year of five thousand fifty dollars. It's gonna be done monthly or in a single payment, you're going to come out a little better in a single payment because there are charges, if you're doing it monthly uh with the insurance companies. But if it's structured right.
Nonetheless, you still are getting a good amount of the cash available, even with the cost of Insurance in the first two years, with many of these policies. Yes, you will see less cash value for the simple fact that they front load a lot of the cost of the insurance but ongoing. There will be a crossover, What's called the crossover point and that's at which point you're getting more dividend than you are basically and maybe that's a bad way of wording it.
But you end up with more money than what you put in for The year. So you put in five thousand dollars and let's see um where's the crossover point on this one: that's about six thousand dollar differential right there, so you can see you put in five. Five thousand fifty you see about a six thousand dollar differential, which means you got your five back plus three hundred thousand Dollars.
So I've talked about this before it's only gonna go up each and every year. So here you see another six and a little more uh. You know.
Let's go down here, we'll go down to year 15. there's a ten thousand dollar differential. Ten thousand one hundred dollar differential you've you're more than doubling your money just for paying your premium.
So anyway, that's not even the point of This video, it's just an example. So year one we have a total of 3 949 and let's go back to our whiteboard there we go so say we knocked this and just for the sake of being easy. Let's just say it was a clean four thousand dollars.
How to use a Cash Value Life Insurance policy to eliminate debt
⏩ MORE: How To Sell Life Insurance
We knocked out those first two debts that'd be 210 dollars a month. Now what happens is if you take you've actually taken a loan against that policy From the insurance company, something you don't have to do anything more than either fill out a form or go in and click a couple of buttons on login or you know a Portal, you have um, they don't have to approve you, they don't have to check your credit, they don't have to do any of that. They don't have to check your income and all of that stuff.
This is basically something you just request you get it no big deal: okay, Um! You get this loan and you pay those two off at 210, a month now you're going to pay that payment, that you would pay to those credit cards right here throughout the year and until it's paid off towards back towards your insurance policy, because it will reduce The cash value based on that loan, but you will get the benefit of the full amount of the cash value when it comes to the dividend every year. So they're not going to deem you in most cases and mind you. There are some that will there are some companies that will, but that also doesn't necessarily mean that you're going to end up with a lot less money because they make up with it.
They make up for it in other ways, so you end up in a lot of cases coming out really Close to the same anyway, but in this case, for the sake of this you're, getting the full amount of the cash value so that full four thousand dollars In cash value will receive dividends for the year, no matter what okay so you'll be paying that off. In the meantime, the 210 so year two comes around. Let's go back, your two comes around And there's a difference of not quite five thousand dollars, but almost so, let's call it 47.
100, maybe a little less. It's called 45, let's be easy! 45! So now you have 4 500 out of this five that you've actually paid in and that 4500 almost pays this off again. Let's just be easy and call it five, because it was close to 47.
How to use a Cash Value Life Insurance policy to eliminate debt
Let's call it five that gets paid off now: you're paying the 210 and the 250 you're paying 460 dollars into back into the policy or towards the loan repayment, which restores your cash value that it had subtracted for the loan. Okay, so it's just you're gonna have this amount of money? This 500, I'm sorry 510 a month going into your policy.
So now it's six thousand dollars a year! That's going back to your policy Right! I mean, unless my map is bad at 500 a month. Six grand and actually it's 6, 100 and whatever anyway twenty dollars anyway, but so now this is going in that's the following year, right so the first year you had 210 dollars a month, and that was let's just call that twenty-five hundred dollars the following year. You have that twenty-five hundred dollars that's been put back towards a Cash value you have actually in year two.
I did that wrong because, realistically that extra two thousand dollars the twenty-four hundred dollars, I'm sorry that would have been paid back towards the policy from the first two right here that would have been available. So now you would have had actually more money. You would have twenty-four hundred dollars in addition to the five that was available, which I rounded up there again Don't yell at me, but uh, the so the five thousand dollars.
So you would have had seventy-four hundred dollars, so seventy-four hundred dollars was not only made a dent or paid off this third credit card, but it would have put a little bit towards the car so now, whatever you're paying all of that in and year, Three you've paid in another Five thousand dollars. Okay, now mind you: this is not an overnight thing, but it pays It Off half the time or less depending on the amount of money you're putting towards it. And if you are disciplined - and you do this, all it is - is savings and an Arbitrage of money.
On top of that, if you look at the policy, let's just go to year: 11. : Okay, you're 11.
You can see what is at about three. That's about eight thousand dollars you Put in five. You made three thousand dollars just for paying your premium and you got your five thousand dollars back: okay, um you're.
12. . You know, let's just go to year 20 here once you've been in them, you're thinking, wow Tony.
I'm 20 years down the road well you're, looking at a lot of it, I left off all the death benefits and all you know the increases in death benefits. I mean that is a plus. I mean that is a definite plus because you're leaving that to your family, whether it's you're.
How to use a Cash Value Life Insurance policy to eliminate debt
This is a kid policy like this one or happens to be on a kid and they'll eventually leave it to their loved ones, um, which this thing will be beautiful. I didn't even like to get into this thing they're gonna be 39. You need to kind of cut off a little bit at the bottom of the hair, but they're going to be 39 on this, and um, And it shows that it increases by almost twenty thousand dollars when they pay five.
So I and you may not be able to see it, it's a little bit cut off and I'm having a hard time opening up the screen a little bit because it's not giving me the right type of Arrow to expand it but um. Nonetheless, just to you know what so, you can see that okay 24 to 42. What is that uh, roughly 18, Let's just call it 18 000.
um give or take a little bit, but for five thousand dollars I mean come on now think about whatever there's 60 70 years old, what that's going to be in cash value just in general, and What it's going to go up every I'm only showing you what it goes up every year I mean which is amazing, which can be uh retirement money in itself, a return on your money there. But you know and mind You, I'm not talking about just 20 grand. I'm just talking about in general that can supplement your Social Security, your IRA, whatever else it is, or for people who love a whole life because of the safety of it, and then they compare it to what an after-tax um or what the tax Equivalent is meaning that if you put it into uh some sort of investment or whatever, and then you have to count fees discount, you know you have to subtract the fees.
Then You have to subtract any commissions, which is usually one percent but um. You know, and sometimes it's 1. 25 because the.
25 or 0. 5 or whatever it is, goes to it, goes to like a basically the broker-dealer, but nonetheless, by the time you're done with the rate of return is very comparable, and you also have the ups and Downs, you have to worry about. You know potential crashes and Junk like that that you have to recover from with an investment account and I'm not against Investments by any means.
I'm just saying for the people who actually are risk averse and they're, like hey, I'm still getting the gain a good gain. Why would I go and put my money in Jeopardy? There are people like that, I'm pretty much for the most part, like that. I do some other Investments.
Don't get me wrong. I do crypto stuff and stuff like that. Right now, that's Um! For me, it's not so great.
I know some people who are still doing very well, regardless of everything that's happening because they're into binary options. That's nonetheless, there's nonetheless, that's here nor there um anyway. My point being is that this is going to continue to grow and whenever they're older and mind you they're young, they can keep getting it up.
They can get other ones, they can get some on their Kids. They can get multiple ones on themselves. I've probably got four on myself.
I've got you to know. Just as many on my life, I've got some of my kids um, I'm adding one on one on each of us. You know uh between now and the end of the year and it's strictly for the cash value.
How to use a Cash Value Life Insurance policy to eliminate debt
It's the cash value, growth um so anyway. So whenever you take those things and I'm getting way off, but whenever you take those and you're Rolling over the repayments and what's available to you for the year the following year, so it was roughly 6 000 and change that was going to be available in year. Three based on the repayments and then you're, looking at the difference between here, it's roughly another five thousand dollars for the year, three, so maybe a little while what an It's about 46.
again we're gonna round up just to be easy, so you've got about 11 000. So now you come over here, I'm sorry, I'm trying! So now you come over here and you put the six thousand dollars towards the car. Okay, this can be done a number of ways um most of the time, the car alone.
You know you can get really creative. Some lenders will recast the loan, meaning If you put a chunk of money down. So, let's just forget the amount that you put down for right now but say you put down ten thousand dollars and you want them to recast the loan almost like refinance it.
You could I mean, but there would be costs with that, but it would lower your payment significantly now the upside to that potentially you'd have to run the numbers, but the other side of that Potentially is that this payment may go from 600 to 400. Let's just say: 400: it just is easy. Now you have an extra 2400 a year that you're paying back towards the policy or any loans outstanding, so that will go towards the Arbitrage.
So now that's 6, 000 and change or whatever it was, will become another. Twenty. Four hundred dollars - and now you have eighty-four hundred dollars as say 500 because I think there was a little bit extra on The other thing mind you I'm just kind of going with this, and I've had a lot of coffee today.
⏩ MORE: The Best of HealthCare Insurance
So I apologize and that's why I'm having to round up and not be so technical with the numbers. Normally I can do these things in my head, but at the moment I'm a little bit amped up on the coffee but um. So anyway, you would have that amount.
So, let's just we're just saying: eight thousand dollars, eighty-five hundred dollars so now that eighty-five hundred Dollars in a year, four plus the difference here right so about five. So that's thirteen thousand and change and you've already paid in what like what seven on the car plus a 13. , so you're 20 000 into this paid off.
You have ten thousand dollars left the following year. It's gonna get Knocked out, and then you're gonna start on the house and what's gonna happen, is that following year, whenever you knock out this right here, the 600 starts getting back into the whole thing. So now that eight thousand dollars you were putting away or 8 500 now it's 6 times 12 right, So you have 600 and what 720.
so 700. And so I'm saying seventy-two hundred dollars that you're putting along with the eighty-five hundred dollars. So every year you're putting fifteen thousand dollars a year.
Now imagine you add that to the other stuff and you start paying down on your mortgage. I'm just guessing at this rate. It'd probably be about, let's just say 12 to 15 years, and if you have a 30-year Amortized mortgage and you're done in 15 and now you're.
Putting all of these payments added up down here below every single year towards your policy. And when those loans are paid off, what is this 19? So, let's call this two and 350 so 2350 dollars times 12. Whatever that is mine.
My brain, like I said, is not working um, twenty-three hundred and fifty Dollars times. Twelve is twenty. Eight thousand two hundred dollars now you're saving that much a year.
You're you've created this Arbitrage of money and that doesn't include whatever you have in cash value based on the payments every year, because you're still paying your premiums that haven't changed, you're, not spending any more money than you were spending before You're, simply saving the same money. With the Same five thousand dollars a year, the policy is growing. You have more dividends right as you go.
You've been paying yourself back right and mind you you're not spending any more money than you were spending before, so you never made another dime at your job. This is assuming you made: no other money, steady employment, same payments, same everything, you didn't go out and buy anything new, And even if you did There are ways to, -allocate, money and redo this right, we there's the actual software that I use to do all of This for people to show them a debt elimination picture when they do that. I don't have as many clients as I used to to do it.
I have a lot of clients that do real estate um and do other things uh own businesses and whatnot, and they use the money to finance the business type of Ventures, whether it's a real. You know piece of the Real estate or it's to finance a piece of equipment for the business, or maybe they just Finance their business in general and use it as a write-off. It gets a little more complicated than that, but once you know what to do, it's not complicated anymore, it's just informing yourself, but nonetheless for your average person.
I was like. I don't have a business. I have a W-2 job uh.
I have a steady income. Whatever I have debts, I've got kids, you know I spend a lot of money. This right here makes all the difference.
I'm not changing your lifestyle, I'm not you're not having to make another dollar higher than what you're making now, which you probably will anyway and everything's getting paid off, and you end up with you: saving a boatload of money and you're like what happens whenever the excuse Me the loans paid off well when The loans paid off and you don't have anywhere to put the money you, you start another policy or maybe you started policy earlier than that you're putting away 20 28 000 you're doing it five. You know at any point in there you can start another policy and for a bigger dollar amount per year and all of these numbers and mind you. It doesn't have to be this company and it's going to be different with different Companies, and this is just an example uh.
How to use a Cash Value Life Insurance policy to eliminate debt
This is just what I dug up at the moment on the Fly uh, but you know I make up a custom design and you know, depending on the company which one fits best for the situation, and we do it. So you know we go through. We go through that we set all this stuff up and we make sure that it works.
It works for your purposes right. So if you want Denver elimination, This is what we're going to do, and then after dead elimination is done, and you know somewhere along the line. Maybe you started more policies and that started helping bring you more dividends and maybe faster Debt Pay down which it will um.
You know it may shave a few years off. If you started one every couple of years yeah some people were like well, no! No. Why would you do that? Well, you haven't excess money and you know you can do Bigger policies that are going to grow at a larger rate in a way because it's a larger sum right.
So the dividends you know so say: net dividend after expenses is four percent and you're going to make four percent no matter. What and the amount's only going to go up. It's never going to go down.
It's there's, never any losses per se. It would make sense, and so now you have multiple policies and you do all of These things and you end up with more money all the way around, and so I mean in my eyes, why? Wouldn't you do this like it's safe money like who doesn't like to save money? I love to save money. I have 10 and 12 of these things myself.
So I practice what I preach. I've been doing it for 14 years personally, even before I was actually setting these things up for people, I benefited from it first and went through The process and learned about it and got in detail and know how to structure policies, no matter what the situation I Can structure a policy almost any way depending on the company, there's a lot of different ways to do it and there's a lot of different ways based on me anyway. I hope this helped.
I hope that it made a little more sense didn't or if somebody would like to see something different as far as laying it out, maybe I'm not that great with spreadsheets, but maybe a spreadsheet or something different I'd be glad to do it. I just it'll. Take me a little bit of time.
You'll have to bear with me, but you know put in the comments uh, you know there are links down below. If you want to schedule a consultation regarding the debt elimination, uh strategy, you know we'll go through we'll. You know you'll have to give me some pieces of information.
You know give me ideas like All of your debt, the interest rates, the monthly payment that you're paying what the minimum payment is, for example, on a credit card. But what are you paying or maybe? What's your car payment, but how much you're actually paying so maybe you're, paying maybe it's 600 a month that you're paying eight trying to pay it off faster, whatever the case may be, you would give me all that information. Of course, I'd get your basic information, your regular information date of birth.
You know um and a few other things just to be able to do an illustration and then, of course, how much you're saving a year. Maybe you already have savings? Maybe you have 10 or whatever, like I said, maybe there are ten thousand dollars you put away and you're like hey. If I put ten thousand dollars into this policy, will that speed things up? Of course, it will that'll make a big difference, so we can start with that, plus whatever you're Saving monthly, and you will definitely move it along even faster.
So for those of you who want to check it out, there are links down below uh. If you like this video, please click the like button. I always try to provide any kind of uh.
You know the value that I can and if you found it uh, you know. If you found this information, you know worthwhile. Please Subscribe.
I try to put out more content and uh. You know how you guys Some more of these types of things, strategies uh, you know, of course, my specialty, for the most part, is. Is this his whole life? But I also do you know long-term care different things, and I can go under the many reasons as to why you would have long-term care or an annuity based on age and different things.
It's their things that I do only because I've seen a need only because I have Elderly parents and uh been sued through some things with them and seen it with others as well, and it's uh, hey until you experience it in some cases it won't hit. You, but whenever you actually experience it, it's it can. It opens your eyes um, so for those of you who can do it early on while you're young and set these things up, that is the best time to do it anyway.
I am getting very long-winded with this. I'm gonna go ahead And cut it off and um. Let's say I will definitely catch you on the next one.
I hope you found this helpful and um have a good one.
More: Life insurance & Types
Post a Comment