Two weeks ago we embarked on a blog post chain about guarantees, liquidity, and protection inside of your life-insurance choices.
Today’s post is all about leveraging the Liquidity of a Whole Life insurance policies from a mutual life insurance company and how they are protected.
Remember the Wall Street Journal and the Dow Jones & Company openly proved that
UL and IUL policies
are NOT Guaranteed,
they are NOT Liquid,
and they are NOT Protected.
The good news is that the Whole Life insurance policies we utilize inside of Vault AIS™ are Guaranteed, Liquid, and Protected!
The sources for these facts are from:
“Live Your Life Insurance” by Kin D.H. Butler
“What Would the Rockefellers Do?” by Michael G Isom
And various articles and research done by the Prosperity Economics Movement.
(Condensed and Used with permission from all authors)
Almost all of the cash value in your Vault account is liquid within ten days or less at most insurance companies.
You can withdraw it, borrow against it, or simply let it grow.
(Note, there may not be much net cash value in the first few years of the policy, but whatever is in there is available up to your company’s limit, typically about 95% of cash value.)
Your cash value is an “all-purpose” account that can be used as:
a short-term savings account to make planned purchases
a long-term savings account for financial freedom or inheritance
a college tuition and expenses fund that isn’t counted as an “asset” on the parents’ FAFSA.
an emergency fund
an opportunity fund (for your #1 Investment)
an account to leverage against for capital expenditures or a business loan
and any other use you can think of!
Even if you never move a dollar, your cash value account is the single-most efficient and effective place to store money.
It’s efficient because it grows in a tax-deferred manner (taxable only if you cancel or withdraw cash above the basis).
It’s effective because you can borrow against it while it still grows at the gross value.
Both capabilities are not available in 401(k)s and other tax-deferred accounts.
When you die, this cash-value Vault (now turned death benefit) will pass on to your heirs without any income tax paid at all, under current law.
It’s the best place to store “peace of mind” money.
So, for the record, Whole Life insurance policies from a mutual life insurance company are Liquid!
On top of the guarantees mentioned last week, there are several ways that your Vault is protected.
Cash value accounts cannot lose value.
Your gains are locked in each year.
Cash value accounts are not leveraged and fractionalized by the financial institution as are savings accounts at a bank.
Insurance companies are not allowed to lend out the same dollar again and again and again.
For this reason, banks purchase billions of dollars of permanent life insurance to hold as part of their “tier 1,” or highest quality, assets.
You are your #1 Asset and because cash value is under your control and liquid, you can USE it in the areas you have the most knowledge and expertise.
You have the control and the knowledge to utilize it in the best way for YOU.
So long as you do not relinquish this control, (IE: You never have a money affair with your #1 Asset) you are immune to the moochers and looters on Wall-Street, get rich quick market tips, and/or the good intentions of “buddies”.
Here’s another protection that many people forget or completely miss about their Vault Policies.
They have equity-like real-estate, but without the “downs”.
Equity in real estate is leverage-able, you can borrow against it, but the underlying asset just keeps on growing unaffected by the debt.
You borrow against your Vault Cash Value, but you don’t take it out.
The net cash value is what is left over to still borrow.
For example, if you have $100,000 of gross cash value and you borrow $40,000, your account will still grow as if it were $100,000, not $60,000.
Confused? Here is how this worked for Victor:
Victor had just completed the two-year mark on his policy when his business slowed, and he asked for an automatic premium loan (APL). He knew this would allow him to stop paying premiums out of his pocket, yet keep the money he had put in there and enable it to still grow while borrowing against it for the premium, literally recycling the money. Since there wasn’t quite enough money in the policy for a month’s premium, $530, we asked the insurance company for an APL for $500 and he wrote a check for $30. The next month, the cash value had increased by $500 (and he had a loan for $500) and he wrote another check for $30. This went on for about five months until he hit his policy anniversary date.
Victor paid the interest out of pocket for the next twelve months on the $2,500 he had borrowed (at 8 percent it equaled $200) and then kept borrowing against the cash value to pay the premium. And during these twelve months, for every $530 he borrowed, his cash value increased by $610, so he could borrow against it again — thus increasing the loan and increasing the cash value at the same time.
A year later, his business picked back up again, and he could start paying his own premium, which he did. Then, as he was able, he paid off the loan in larger lump sums when he had the cash. This built his policy back up, so he could borrow again in a time of need or for an investment opportunity.
So, for the record, Whole Life insurance policies from a mutual life insurance company are Protected!
We have countless stories of clients who have used their Vault to
protect their families,
buffer slow income years,
invest in their own businesses,
use as collateral in very low-interest rate bank loans,
and as heartbreaking as death is, we have paid death benefits that have ensured the legacy of beloved clients.
This road of financial wellbeing is not a gambling hall!
Your Vault policy is literally the SAFEST place anywhere to save your money. Period, End of story!
Your Vault is your own version of Fort Knox for all that you have created, all that you will create, and all that you will leave as a legacy for the future.