馃攳
How to Take a Whole Life Policy Loan and Pay It Back - YouTube
Channel: The Money Advantage
[0]
- All right, I wanna walk you through
[1]
the process of taking a whole
life insurance policy loan
[6]
and repaying that loan.
[7]
Now, I want you to comment
in the comment box below.
[11]
If you have a whole life insurance policy
[14]
and you have taken a loan before,
[16]
please type yes,
[17]
because I'd love to know
if I'm talking somebody
[19]
who already has this experience.
[21]
And if you have never taken a policy loan
[23]
but you are a whole life
insurance policy holder,
[27]
then go ahead and type no,
I've never taken a policy loan
[30]
in the box below.
[32]
Then, if you are just
interested in the topic
[34]
of privatized banking
and whole life insurance,
[36]
and you wanna know what
this whole thing is about,
[39]
taking policy loans,
[40]
please type I'm interested
in finding out more
[43]
in the comment box below.
[44]
And the reason is that
I'd really like to know
[46]
who I'm talking to
[47]
and what is most important in your mind.
[50]
Now, the idea of taking a
policy loan in the first place
[54]
might sound a little interesting to you
[55]
if you're not familiar
with privatized banking.
[57]
So I'm gonna rewind and tell you
[59]
just a little bit about why
[61]
we're addressing this concept
[62]
and idea in the first place.
[64]
With privatized banking,
[65]
you have a whole life insurance policy.
[68]
You're funding with premium dollars,
[70]
those dollars are going into the policy
[71]
and they're building up cash value.
[74]
Now, that cash value is
guaranteed to be accessible to you
[78]
contractually within
the policy guarantees.
[81]
Now what that means is
that you have access
[83]
to use that cash value.
[85]
Now, instead of taking the
cash value out of the policy,
[89]
instead, you're actually
borrowing against it.
[91]
Meaning that your money
stays inside the policy
[95]
and continues to grow with
interest and dividends
[98]
while you collateralize that cash value.
[101]
So here's a very clear distinction.
[103]
You're not taking your money out,
[104]
you're borrowing against it.
[105]
That means your money
can grow and compound
[107]
and you're using other
people's money instead.
[111]
So now, how do you actually
borrow against that money?
[114]
It's through a policy loan.
[116]
What you're gonna do is
you're going to request
[118]
from the life insurance
company a policy loan.
[122]
And to do this, there's some paperwork
[123]
that you need to fill out.
[125]
You usually have this directed
[126]
straight to your bank account,
[127]
so there's EFT form that
usually involved as well.
[130]
Or you can have them send you a check,
[131]
but it's always better to
have it direct deposited
[133]
straight into your account.
[135]
Now, you can usually do
this by using a login
[138]
and login information
[140]
and then making sure that you fill out
[141]
all the paperwork appropriately.
[143]
However, we highly recommend
going through your advisor.
[147]
If you contact your advisor,
[149]
let them know that you
wanna take a policy loan.
[150]
They will make sure you
get the correct forms,
[152]
correct paperwork,
[153]
and that they give that to
the life insurance company,
[156]
that makes it way easier for you.
[158]
This also then can initiate a discussion
[160]
where you're talking with your advisor
[161]
about how and when you
wanna repay that loan.
[164]
Because here's the thing.
[165]
We wanna make sure that
anytime you take a policy loan,
[168]
you have a plan in place to repay it.
[171]
Now, that's your plan,
[172]
it's not the life
insurance company's plan,
[174]
it needs to be something
that you agree to,
[176]
what your cashflow
situation will look like
[178]
and how quickly you can make payments
[180]
to reduce that loan.
[182]
Now, as you have an outstanding loan,
[183]
here's what it looks like to you.
[186]
Your cash value remains fully intact.
[189]
The life insurance then
provides you the capital
[192]
and they put a lien
against your cash value,
[195]
for the portion of the loan.
[196]
So say you had a $300,000
cash value inside your policy,
[200]
you're taking $100,000 policy loan,
[203]
that means they're gonna
collateralize $100,000
[205]
of that full cash value.
[207]
And then that 100,000
is no longer available
[209]
to be reborrowed against
until you repay it.
[212]
The other 200,000 though,
is still available to you.
[216]
So, what that means then,
[218]
is with the life insurance company loan,
[221]
you will be paying interest on that loan.
[222]
And the interest is going to
the life insurance company
[225]
not directly to you.
[227]
You're repaying that loan at interest.
[229]
Now, you can repay on your terms.
[232]
That means you can repay in five years,
[234]
five months, 15 years,
[237]
or you can repay all at once.
[238]
Now, it will continue to accrue interest
[241]
while the loan is outstanding.
[243]
And so, the thing you do wanna be aware of
[245]
and cognizant of is that if
you had a maximum policy loan,
[248]
or you borrowed almost
all of your cash value,
[251]
or against almost all of your cash value,
[253]
you would wanna make sure
[254]
that that interest wasn't growing faster
[257]
than the dividends and interest
[259]
we're adding back to your cash value.
[260]
Because then your cash value
could actually become depleted
[264]
and end up in a situation
where your policy folds.
[267]
We don't wanna do that.
[267]
But what we do wanna
have is a repayment plan
[270]
so that we know how much
we plan to contribute
[273]
to paying this loan back,
[274]
either monthly or annually.
[276]
Now again, what's really awesome
[277]
is that you can make changes.
[278]
So if you had a delay in
your repayment schedule,
[281]
or you had an acceleration,
[283]
you wanted to repay more quickly,
[284]
you would also be able
to make those changes.
[286]
So just a couple things for you
[288]
to become familiarized with
the use of your policy.
[292]
Because a whole life insurance policy,
[293]
if you're using it for privatized banking,
[295]
is not a set it and forget it
on the shelf type of product.
[299]
It's really meant to be used and driven.
[302]
So like if you were driving a car,
[303]
you'd wanna know how to
operate that vehicle.
[305]
You wanna know how to operate
[307]
your whole life insurance policy
[308]
so that it can be this living,
[310]
breathing, moving thing for you.
[312]
And yes, it has the cash value component,
[314]
but you're using that cash value.
[316]
And again, you can use that for things
[317]
like investing in a rental
property that cash flows.
[320]
And then you can have
that investment property
[323]
producing cash flow
[324]
and using that to repay your policy loan.
[326]
Anytime you use a policy loan
[328]
for an asset that produces cash flow,
[331]
you're in a double win situation.
[333]
Because then, you are increasing
[334]
your cash flow with this opportunity
[336]
that you have the ability
to repay that loan
[339]
outside of your own personal cash flow.
[341]
So if this has been helpful to you,
[342]
I would love to know.
[344]
What other questions you have
[345]
about life insurance policy loans
[347]
and how can we make sure
that you are on the path
[349]
to become a knowledgeable,
[352]
intelligent, and confident owner and user
[355]
of privatized banking?
[356]
(upbeat music)
Most Recent Videos:
You can go back to the homepage right here: Homepage