Clearly, you haven’t taken the time to read this blog post or look at the actual policy statements we posted here to prove our points. Whole life base policy premiums have to be paid for the length of the contract unless they are reduced paid up. There is a graph that shows you how this typically works in comparison #5 of the section where I compare Bank On Yourself versus investing in the stock market. 94% of that $300 goes to work for you immediately (it’s buying you additional fully paid up coverage or death benefit at the lowest cost, which then accumulates its own cash value and dividends). So what happens after age 70 and your term ins. http://www.integritymarketingseo.com/california-seo Suze Orman speaks out on Life Insurance. As an advisor I have sold both strategies depending on the client and what their needs are. I like paying my taxes now, while I know what they are. Instead I have gotten in debt All mostly trying to enhance my holdings. Yes there is tax you’d take out at the end for both S&P examples.So after 35% tax hit from an IRA withdrawal, the $5427 would be around $3528 or reduce it to around 6.51% compounded. If a client does not have a business it makes absolutely no sense to use Bank on Yourself and have to tie himself or herself down with an insurance policy. co., thus, making the whole life ins. I also made a mistake on the projection above since it was late at night. I am glad to hear you say “you will look into this.” I have PROVED on my website and in my book how Bank On Yourself-type whole life policies are different from the policies Dave, Suze and the others talk about, using direct quotes from their books, and comparing them against actual policy statements. Several of the folks who shared their stories in my book do this as do several of those who tell their stories on our website. On this hate list are three types of permanent life insurance: variable, universal and whole life insurance. If so I’d certainly like to hear more. I really wish I had gotten into it from what I have read (I have read Pamela’s Book) From my understanding of the book 10 years ago I was out of debt. It is a temporary solution for a temporary problem. What was your name again,,,,,,, Patty Madoff or something like that? There are two philosophies regarding a BOY designed policy: a) Minimum funding: with primary goal using the money for financing, premiums paid by PUA’S after capitalization period. Depending on the situation, qualified plan monies are often used to fund a Bank On Yourself policy. Paul – This is a great example! My confusion comes when it comes to concept of using life insurance as a bank when both have that feature. If they are not a central bank like the Fed which has been granted the power to print money, they can only get the money from the same places everyone else can get it. KlausG. It definitely can be frustrating. When you know how money really works there plenty of options out there to grow and protect income. Can access before age 59 1/2 It was $6870 return after 20 years @ $100/yr and $26870.as the combined contribution which equates to the $4666 after 35% tax reduction. Life Insurance Made Easy. Whole life insurance living benefits provide another level of security as the policy … After having read about Bank on yourself you have gotten my interest. Pamela — thanks for responding. Now I don’t have an MBA (but please don’t hold that against me either :)), and I’m not great at math. This whole concept sounds like good sence to me. Just “for fun” (I work at a company that designs BOY policies), I ran a sample illustration on a 30-year-old male, putting $10,000/year into a policy until retirement age. Fill in the lower brackets first and your taxes come down. The dialogue in this blog is rather different than the marketing hype on the home page. I understand your concern. Orman strikes right at the heart of the issue: Life insurance is not meant to be an investment product. Just my 2 cents. It’s simple math. Can you tell me what direction taxes are going over the long-term? To find out what your bottom-line numbers could be, and how much your financial picture could improve if you added Bank On Yourself to your financial plan, request a free Bank On Yourself Analysis. Do you have one of her policies? This feature is only available with a whole life ins. Or just the death benefit? And, they can get it without paying brokers and insurance companies. If you’re a financial representative who’d like to apply for the Professional training program, you can find out more about it here. A term life insurance policy provides a death benefit when the insured dies. It doesn’t just let you put more into it. Is the interest earned monthly, annually, or by a contract ? One last issue that I keep scratching my head on is the use of a life paid up at 65 (or even 100) and using the PUA rider. Read this before you go spouting off any more nonsense. Is this a pipe-dream to pursue? (Please note that his withdrawals are NOT 100% taxable like withdrawals of most qualified ‘retirement’ plans). So your results will be different. I’m just curious because I’ve heard use whole life 90% of the time but I was on the Insuranceproblog.com That made strong arguments that IUL works the same way but with more potential of cash growth. Updated on March 9, 2018: We love Suze Orman here, and not just because she used to be roommates with John Belushi. As far as Dave and Suze go, they are right, you should never use a credit card or buy a car on time. Really! I still didn’t learn it to where I was confident. See Myth #2 for the low-down, but the entire article is well worth reading. © 2009 – 2020 Hayward-Yellen 100 Ltd Partnership. Many people age 62 and older start Bank On Yourself plans (I devote a whole chapter of my best-selling book to this). Back to my example above of paying $1,000 per month premium vs $1,000 to a checking account, and taking a $36,000 loan 3 years into the policy. Could you explain what it is, please. When you retire, you don’t want to turn the policy into an actual annuity, but you can start taking income from the plan through an appropriate combination of dividend withdrawals and loans against your cash value (which you will not repay, if you’re taking retirement income). Is long-term disability insurance worth it? Here’s a link to that article, titled, Ten Stock-Market Myths That Just Won’t Die. There are so many misconceptions in your post that I wouldn’t know where to begin correcting them. Whether the math is absolutely correct, I hope you appreciate my attempt to differentiate between compounded growth of a fixed rate, a varying rate with and without taxes of a passive amount like $1000 vs. a dollar-cost averaged $1000 over 20 years and backing out the return. The fact is that buying term and investing the difference generally does not work. 10 Year Vs. 20 Year Term Life Insurance Review Many people looking to purchase term life insurance have trouble deciding between a 10 year vs 20 year term life insurance policy. Would this translate? You need to understand riders before you bag on her plans. If you want to talk about “Ponzi Schemes”, let’s talk about Social Security and Medicare… get real! Rather, we advocate that you regain control of your money through personal stewardship and responsibility. The IRR ends up being 3% if purchased today, right? Anyway I like the plan inside b.0.y. Say I am able to my pay my premiums in fully at policy signing. Which one Pays Out no matter what? I have appointments with National Life Group a leader in Index market. With a mutually owned company all the excess profits are returned to the policy holders. Sorry, basic facts, the stock market goes up 12% per year on avg, just look for yourself. Total cost per year is $11,148 until year 20. 5. Strategies to Maximize Your 401(k) Partner Links. What I don’t understand is how does the Company earn/accumulate/receive the returns to guarantee the increases to the policy holders. To get a referral to one and a free Analysis go to /analysis-request-form. Now let’s compare that against a policy with the same premium, but this one was designed by a Bank On Yourself Professional. Much too much BS and no facts. The ability to convert can be extremely beneficial to you if you become sick or uninsurable at sometime during the term period. None of these seems likely to be true of EVERY famous expert, so perhaps there’s a bit of “too good to be true” about something? I used to work at a large mutual insurance company. If we borrow back our money from you, is the interest you charge, simple interest, or compounded on the unpaid balance monthly? Same concept applies here. I noticed that there was an initial waiting/investment period before you would start to see results. At 4% i would have $765,000. A schnook, somebody who wants to take you, somebody who is in my opinion not a friend maybe, but … Your numbers are way out of date. Anyone with six weeks of distorted life insurance training is incapable of grasping the historical significance of permanent life insurance let alone the BOY concept. she used to be roommates with John Belushi, A crib sheet to reading life insurance quotes, The healthiest (& unhealthiest) states in America, How long should term life last? Is that correct? My conclusions about why Indexed Universal Life is NOT an appropriate product—especially if you do plan to use your policy for financing purchases (and also if you want safety, predictability and guarantees), can be found here: 7 Reasons to Be Wary of Indexed Universal Life Insurance. As policy owner, you ultimately recapture the interest you’ve paid. Hello, I am a College Funding Advisor working with the National Association of College Funding Advisors. That’s would I would like to see, a risk adjusted rate of return for this program versus the S&P 500. However, I feel that may be a little extreme as I personally believe that the more buckets that you are saving into the more options you will have. 3. The concept of insurance is to have many more people paying into their policies than the insurance company has to pay out as interest and death benefit which makes life insurance the #1 financial class in the world. First, the death benefit is typically tax-free. I think he counted that as part of the rate of return which I found troubling (though it’s been a while since I’ve read his book, admittedly). | 7Wins.eu, a Bank On Yourself-type policy is a totally different animal, http://www.youtube.com/watch?v=iIgLyl66QxQ, learn more here about the multi-layer safety net, compare your favorite strategy to Bank On Yourself, fair and balanced comparison of whole life, 4 reasons why indexed universal life is not an appropriate product. You’re welcome to check my math, however, you’ve already admitted several mistakes in your own calculations, so I’m not going to put a lot of faith in any new ones you come up with. You receive a guaranteed increase every year and have the potential for dividends. ... whole life insurance has a guaranteed cash value, the required premiums are much higher to maintain lifetime coverage. companies that offer them, and the sales people who sell them” which you can purchase online from Amazon.com. You’ve gotta’ be kidding. I don’t think they’d be too good on the facts, given what they promote right now. The information presented here is for educational purposes only and is not a solicitation for the purchase of any insurance or financial product. If you can match or beat Bank On Yourself, there’s a $100,000 cash reward waiting for you! But I would let yourself get confused by these facts. (traditional & indexed) because so many ins.sales people were touting the use of Univ. One way to supercharge these policies is to do a “short pay”……….:). Would you pay into a 401(k) plan for 6 or 7 years and then expect to rely on just the growth for future funding? Pros of whole life insurance. The cash value of a whole life policy is guaranteed to equal the death benefit at maturity (typically age 121 these days) AND the death benefit increases over time for several reasons, because of the type of policy this is and the features added onto it. But there’s a whole bunch more differences, which is why the $100,000 cash reward I’ve put out there remains unclaimed. The unpaid loan amount and unpaid interest will be recapture from the death benefit before it is paid to a beneficiary. Stay tuned for what promises to be a very stimulating interview! I believe higher returns could be achieved elsewhere but if we compared returns on a risk adjusted basis does it make sense. Financially speaking, personally, it’s the best thing I ever did for myself, and if I can help others understand it better, then more people can reap the benefits and in the meantime reduce our country’s reliance on big banking! The results are always comparing the IRA after paying taxes when withdrawn and the insurance policy withdrawn without paying taxes. They are VERY good at over-promising and over-delivering. So your post is meaningless. I don’t think bankruptcy would add to the confidence to my peers. But the BOY concept is not a “price” game. This is a true and factual example and blows the whole “BTID” concept to smithereens. Pam- You you used the example of buying cars what about using this for real estate transactions. If you browse the personal finance section of any bookstore, turn on the TV or open a magazine on finance, you’ll discover that 99 out of 100 financial “gurus” will insist that whole life insurance is a lousy place to put your money. One dollar invested in stocks in 1802 would have grown to $8.8 million in 2003, in bonds to $16,064, in treasury bills to $4,575, and in gold to $19.75. As for whole life, I LOVE it, so long as it is from the right place and used/sold in the correct way. The best insurance carriers don’t and they’re doing fine. Key Difference #1: These experts say the money you can have access to in the plan (your “cash value”) grows too slowly in a whole life policy, and say you typically won’t have any cash value at all in the first few years. 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