So you don’t understand that the only money you can borrow is money that you gave them ? Why pay to borrow your own money? They give you a 5% return at best ! I put my money into mutual funds and the same amount invested in mutual funds grows at over 10% every year and doubled in 7 years! And it’s tax free too ! Just like in the insurance policy when you take money out you pay taxes but my east taxes are at lower rates of 15%. Not the 30% income tax rate!
@@sfsfuzzy3597thanks for your comment. Personally I don’t have issues with credit card debt and invest in a number of ways…but if I have to pay for life insurance anyway, I’d like to know all the options. This is just one way to start learning about it.
I wish i knew this when i bought my life insurances. Consult with a knowledgeable agent because any agent can just sell you life insurance but has no idea about designing a plan that meets your needs. Most of my policies barely have any cash value 😢. I'm 43 now, gained weight with some pre conditions and life insurances now are too expensive.
I was going to have mine set by another company but the way you both break it down i will be contacting your company thanks for breaking it all the way down.
I’m not even halfway through the video and I just wanna say y’all have been doing a amazing job on explaining everything even down to dummy terms and I think y’all should consistently do it this way
Love you guys and appreciate the info you’ve shared on this. My mom and I each have a whole life policy and after listening to you, we have been able to borrow from the policies. Thank you so much!
@@markeshabailey1922 yes you can never borrow more than you have the extra ! Not what paid for the insurance but all the money over the cost of insurance! That’s all you can borrow is your money ! Now how is that a good thing? I got term life insurance and invested the rest and after 20 years I have no need for life insurance! I have more than 1.6 million dollars just from the same money that you want to pay them to loan you of your own money! My money made 25% so far just this year ! In one year my money made more than you will get in twenty years giving your money to them
Question is: T min 7:32 you say that if I pay my annual premium then I can borrow against it.. Well why would I borrow against anything if I had the money in the first place to pay that kind of premium?...Inquisitively.
because you are borrowing money from the insurance company (not your own money), against your own money (collateral). so, you will have to pay interest on the money you borrow from them.
@Elegan_te thats not true. You are not borrowing off of any money the insurance company is giving you, you are borrowing off of the money that you accumulate in the policy( cash value) and your money is not accumulating until after a year or two. Borrowing your own hard earned saved money has never brought wealth to anyone it brought them debt 💯
Hello, when you talk about paying your premium. Is that your monthly payment on the life insurance or that 10k per year? So from what I understand is that in order for me to borrow that 60% which is 6k, I have to put in 10k in premiums for that year? Could you please advise? Thank you.
@@tankercrewchief me too. I was able to borrow after 30 days of having my policy. This depends on the agent. He/she must be knowledgeable enough to structure it well for the client.
This is what I have been looking for! A layman’s video that covers living benefits, loans, withdrawal etc! You gained new subscriber here. I’m a new life insurance agent too! I’m glad I found your channel! Looking forward for more! ❤
When u do borrow the cash from the policy, let’s say for the purpose of paying off credit cards. Is the borrowed money reported in your credit report as an installment loan?
If I work for a company that offers life insurance and I've been paying on it for x amount of years, can I use the life insurance from the company that I've been working for?
She said you have to pay back the money you borrowed. Someone told me they have a whole life policy they don’t need to pay back. They said if they don’t pay the loan back, the policy won’t be as valuable when it’s distributed to their beneficiaries. Are there actual policies like this?
You must be an idiot ! I’ll give you a better deal! Give me a hundred grand and then pay me for life insurance and I’ll loan you a portion of your money back for a feee ! Heck yes ! The fact is whole life is not tax free it’s just that you have no growth and if do get growth you can’t have it they keep your money! If you ever take the money out you pay taxes and not lower capital gains but at the invite rate of at least 28%
I love you guys video It’s GREAT information I would see TikToks about this & wouldn’t believe it but now I see how it works. Great way to get financially stabled 👌 I have a couple of question I wonder if you could help. you have to be a citizen or is ok if your a resident?
I just came across your UT videos. Great info. I do have a question. I do have a New York whole life insurance policy. I had it a couple of years. My police is over 5K with a cash value of $586.00. I just started a Real Estate investment business. I buy tax delinquent residential vacant lots/land and I flip them. I need about $1000 to purchase a small peace of lot/land I have my eyes on. would I be able to borrow $1000 if my cash value is $586?
I'm confused, can someone please explain - I thought when you withdrew the CV, it was tax-free? But this is saying you're subject to taxes on your withdrawals?
Let assume you have contributed 50K to date and cash value accumulated is 70K. 90% Liquidity is 63k accessibility. If you withdraw 50k, there be no taxes. However, any amount withdraw over 50K is taxable. In other words, you can withdraw up to what you have contributed tax free and amount you withdraw after that is subject taxes
What if you have a term policy that you wanted to convert to a whole life policy and you throw $$$ into turning it into a whole life policy would that be wise?
One question? If I start a whole life insurance policy. Let’s say 1,000,000 and I pay the premium upfront (10,000). How much can I borrow for real estate purchase. Let’s say 500,000. When can I pull the funds
OMG, if ever, it would be decades before your cash value would be at that level! Keep in mind, the policy is designed to "endow" at either age 100 or 120 depending on when it was issued. So probably a little over have way from the time of issue before you get to that level of CV.
So this is marketed as an investment component of life insurance, but I can't access my funds unless through the cancellation of my policy, through a decrease in my death benefit amount, or I simply just use the account as collateral to take out a loan from the company that sold me the policy? I do not understand the benefits of having an "investment" component of life insurance. Why not buy term and invest the difference in my premium and invest in the U.S. Stock market averaging 10% in annual returns. I'm seriously so confused in what is the appeal of these life insurance products. BUY TERM
Sure! Let’s say I use a credit card at 20% interest. I borrow from the insurance company at 5% simple interest to pay off the credit card. I paid the debt with the money borrowed from the insurance company but maintain minimum payments for the credit card back to my system, the difference is 20% min credit card payment - 5% insurance company. The difference equals 15% back to my system because I was already prepared to pay back the credit card company with the monthly minimum payments
Hello, I have a whole life insurance illustration and I want to have someone look at mine to verify I am getting the best benefit. I’m a shopper and don’t go with the first proposal. Can you help?
@maxumgenesisgroup Your best benefit would be to cancel the whole life policy that is ripping you off, and buying a term life policy. Whole life premiums are about 10 times the same term policy.
Hi, it's me again. I would like to have a wholesale policy that i can borrow at least $2000 in just a few months of owning the policy to invest in my Real Estate investment business. is that possible?
But it is not true that all policy loans work like that. I mean, if my policy has a participating loan option to choose then it works as you are saying otherwise it wont.
It will likely take several years before you would be able to borrow that much, that's part of the misrepresentation that occurs, is how long it takes your cash value to accumulate. Unless you over-fund the policy, you will be waiting for yrs before you have enough to do anything significant like buy a car! And keep in mind, every premium dollar you hand over to the insurance bank, becomes their asset, Unlike a deposit in a traditional bank, when you make the premium payment (deposit) you lose ownership of that money.
These policies typically have 8% interest rates. Much higher than mortgage rates or auto loan rates. You better have a high yield investment to use this method. Also, the break even periods on these is typically 10-15 years. You may have some cash value up till then, but wayyyyy less than you paid in. The agents are making lots of money from you for those first 10-15 years
great video! i am curious on your thoughts on this "Although the rates may be favorable, you still pay interest on life insurance loans. And because the interest is often subtracted from the cash value, it can sneak up on you. If your loan plus interest exceeds your policy's cash value, the policy could lapse." basically loan interest value overtaking the compounded value added? does this mean there is a sweet spot on how much you deposit and how much you should take out on a loan (considering the interest rates?)
The interest is not subtracted from the cash value. It compounds if you do not payback at end of the year. it is lot to explain in text. The insurance company will not take interest from your cash value. You're in control of when you pay back the loan. However, if you do not make the interest payment, it will be added to the loan balance at end of the year (compounding on your).
@Krthaspecialist Yes. They pay the face value of the policy minus any outstanding loan balance. That's a fancy way of saying the insurance company keeps the cash value.
Ok so what if you decide to fund your policy upfront with 50k - 100k does that instantly gives you higher loan borrowing power and interest gains on your life policy. Idk if my question make since. Instead of waiting for the cash value to increase over years to borrow can you just preload the policy?
Are you really willing to hand that much cash over to an insurance bank?? The minute you do it is their money!! What are you trying to accomplish by putting that money into a policy?
You haven't wasted money, this whole concept is very misleading and respectable professionals as well as the insurers themselves, acknowledge this concept should only be utilized by the top 2% of our society. They have already accumulated their wealth and they DID NOT do it in insurance! They primarily did it by building businesses! Once they have a lot of wealth and surplus cash, this concept is a little bit better place to store cash than a traditional bank. Unless you're in that tax bracket, you are likley needing to accumulate wealth and this is NO WAY to do it!!
Talk to an agent that can structure it well for you so you can borrow it quickly. I borrowed mine after 30 days of getting the policy. It was whole life.
I'm agent and you can't access the money in 30 days. It takes couple years to build. We have stop lying to people. You have to put a lot money in order to build at levels in video or purchase IUL. I'll be glad to help.
@@carlajohnson223 Well, you might want to step up your knowledge base because I'm sharing from my own experience. Most agents are clueless on how to properly structure cash value whole life.
@deanj0805 I’m borrowing from the insurance company using my policy cash value as collateral. This is how I’m able to continue to earn interest and keep the loan outstanding as long as needed.
@@WealthNation ok I think I better understand. You’re treating the insurance company like a bank and your policy like a savings account. It works because your not getting chopped down by interest like with a bank. You’re playing an interest game.
It’s cheaper to use a 0% credit card for one year, than pay insurance company interest It’s cheaper to buy a car and get bank loan 2.5% than to pay 8% to insurance or even 5%
Hi @michcail1976 thank you for your viewership and your question. We are front loading the policy with 60% of the premium going to paid up additions in the first 4 - 6 years.
