3 Ways That Life Insurance Can Be Classed As A Significant Asset - YouTube

Life insurance, an asset or a liability? In this episode, I'm going to address  

three ways that life insurance can  be classified as a significant asset  

rather than a liability for the owner. By the  end of this episode, you will understand how

max funded IUL is used for living  benefits by many savvy investors.

So, my name's Doug Andrew I've been a financial  strategist and a retirement planning specialist  

now for more than 48 years helping people prepare  for a comfortable retirement and other long-term  

financial goals so they won't outlive their money  and if you've watched very many episodes on this  

three-dimensional wealth channel or read any  one of the 12 books that I've written thus far.

You will probably discover that one of my  favorite financial vehicles that allow people  

to accumulate their money tax-free and then  be able to create tax-free income for as long  

as they live without depleting principle and then  be able to leave behind the money tax-free and  

have it actually blossom or increase in value  is a maximum-funded tax-advantaged insurance  

contract. Now, my favorite is an indexed universal  life insurance contract structured properly and  

funded correctly. This is what is deemed a laser  fund. Laser is an acronym this stands for liquid  

asset safely earning returns and so I would  dare say that over 99% of you know IUL policies  

actually don't qualify to be a laser fund and  you can learn about why and how in these various  

episodes on this channel and I'm gonna gift you  a copy of our most recent best-selling 300 page  

book the laser fund. So, stay with me here. But folks, this is incredible a lot of people don't think  

about life insurance as an asset. So, I'm going to  give you a few examples as we go through right now.  

Indexed universal life allows you to link your  returns if you choose with your universal life  

policy to an index of your choice. This is very  valuable in a low low-interest environment which  

started happening in the late 1990s. When universal  life was first introduced by EF Hutton who was not  

an insurance company they were a brokerage  firm. It was in 1980 and interest rates were  

high and insurance companies were earning and  paying on universal life the ones that I owned  

between eleven and three quarters and fifteen  and a half percent tax-free from 1980 to 1990  

and a few years beyond. Interest rates started  to come down and so to compete they introduced  

indexed universal life because people didn't  want to have their money subject to volatility.

That was a variable universal life or variable  whole life. I've never owned one I never will. I got  

my 3,000 clients out of the market in 1980 when  EF Hutton came up with the idea of universal life.

They were never happier and they were able to earn  great tax-free rates of return. But when interest  

rates started coming down I didn't want them to  put their money back into the volatile market  

that's variable life. So, indexing allows the  insurance company to take the interest  

on your money in the policy and it doesn't matter if you have 100,000 and

there 10,000, a million, 10 million. But  let's use a million just to use as an example

a snapshot in time and it's easy to extrapolate  from a million-dollar example. So, if the insurance  

company is earning in a low-interest environment  on aaa bonds and mortgages on shopping malls  

and skyscrapers and so forth 5 percent. They  need one of those percentage points for themselves

and so they can pay you 4 percent. So, that's  40,000 on your million. You can settle for

4 percent tax-free because it is tax-free  which is better than what banks are paying.

But if you feel bullish about America and you want  to earn a return that outpaces inflation which in  

the year 2021 the true rate of inflation was 15%.  People who owned indexed universal life earned  

25%, 61%, even 153% who followed our advice  okay. So, with indexing you're simply telling  

the insurance company in that year or sometimes  you can use a two year or a five year period, 

"Hey, I will give up the interest on my money  but keep my millions safe", in this example  

and if it's 4 percent they're earning  that's 40,000. You can use that 40,000 to  

fund an options budget so that you'll have the  wherewithal to pay me whatever the S&P or the  

Dow Jones what the market does if it goes up.  If it goes down the options expire worthless  

and I didn't make anything but I didn't lose my  million. I do that because 7 out of 10 years

you usually have the market go up you usually  make money. Even in the worst decades since the

great depression 2000-2010 when there were five  down years. I ended up doubling my money in that  

10-year period, a million double to 2 million. Even though 5 of the years I didn't earn anything  

or much of anything and the other 5 years I did. That's the beauty of indexed universal life. So, 

let's talk about this as an asset. Many people that  would come to me wanted to use life insurance as a  

living benefit because that's what EF Hutton came  up with the idea instead of just the death benefit.  

But you can use it for either one. So, when EF Hutton came up with this idea it had

universal applications that's why they called  it universal life. Which means, you could minimum  

fund it. You could pay actually lower premiums  into a universal life than a whole life policy  

and uh get a death benefit. So, if all you  wanted was tax-free transfer when you died

universal life allowed you to pay lower premiums  into it than whole life. Whole life had to compete  

so they had to pay higher interest rates and so  forth and they used to have guarantees now they  

they don't but they would say well, a universal  life if you pay minimum premium can cause you to  

have to pay higher and higher premiums down the road it'll lapse. No, not if you do it  

correctly but if you do the opposite end you take  the least amount of insurance the IRS will let you  

get away with and you put in the most premium you  way overpay for the insurance. Now, it turns into a  

tax-free cash cow for living benefits to use  it for tax-free accumulation and tax-free income.

So, for example, a 60-year-old could put in 500,000  bucks. You could get a lot of life insurance for  

that but that's not the objective. The least amount  of insurance for a 60-year-old might be two and a  

half times that 1,250,000. But that means  the 500,000 they would put into a policy

would grow and double like every 7 and a half years if they're earning 9.6% like I've

earned since 1997. And so, this is incredible  because you know if you double your money every

seven and a half years 500,000 goes to a million  and then 2 million, then 4 million, then 8 million.

Yep, we've had many people that started out with a  half a million that now have 8 million. Now, before  

I show you something absolutely incredible. If this  is intriguing you, click like, but post a comment,

share with somebody else who ought to watch  this. But subscribe to this channel, it's free.

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new video which I do almost on a daily  basis and I don't want you to miss out.

But this is about you and your brighter future. But  stay with me to the end because I want to gift you

my most recent best-selling book. You don't  need to pay 20 bucks for it on Amazon, okay.

Now, let's talk about why many IUL policyholders  a maximum fund to use it for living benefits  

because every million can actually generate a 10% payout. 100,000 a year of tax-free

income without depleting principle. If you've  retired at 65 if you live to be 120. Sound too good

to be true. You wouldn't believe how many IRAs and  401ks will be out of money 10 or 11 years after

retirement because you're having to pay tax on it  and it's not designed to outpace inflation. In the

year 2021 people who had indexed universal life  when inflation was 15% were earning 25, 61, 153, by  

linking their returns to the things that inflate. If that is arousing curiosity in your mind

make sure you search on this channel for that but  also read the book I'm going to gift you. So, let's

talk about the beauty of an insurance contract  as an asset. So, there are five general parties  

an insurance contract an insurance  policy. Now, there's the insurer

that's the insurance company. There's the insured  that's the person that the insurance is on, okay.  

There's the owner of the insurance policy. Now, the owner is usually the insured but it doesn't have  

to be. Many banks and credit unions own insurance  policies on people. Why? Well, because they get the  

tax-free accumulation and the tax-free income.  They're just putting the insurance on their  

stockholders or their board of directors or what  have you. There's a lot of companies that actually  

buy life insurance policies from people who no  longer want or need them and I'll talk about  

why here in just a moment. So, you have the owner  it doesn't have to be the insured. You have the

premium payor the one putting the premiums into  it which is usually the owner and the insured but  

it doesn't have to be. I could be the premium  payor as grandpa on a policy that ensures

one of my children and the beneficiaries is the  family trust that benefits the grandkids, okay.  

So that brings up the fifth party that's a  beneficiary. That's the one who gets the money

when the person dies, the insured dies. So far so  good. There is such a thing as insurance capacity.

A lot of people don't understand this. That means  that when you're younger let's say you're 30 years  

old and you have six children like my wife and I  did by the time we were age 32. If I were to die

I wanted to protect my sweetheart and my six kids  so that they would have the wherewithal to be able  

to continue to live life in dignity and and go  to school and have music lessons and so forth.

Because I didn't stay around to provide that and  so you're able to insure yourself for a certain  

factor of your income. Let's say it's 30 times your income. If you're making 100,000 a year  

they'll let you have three million of insurance. Yeah, you can't have as much as insurance as you  

want it's a factor of your income. Otherwise, people  would be buying billions of dollars of insurance  

these terrorists and they would strap bombs to  themselves and blow themselves up to fund millions  

of dollars of their terrorist groups okay and so that's called insurance capacity.

You can only have a certain amount of life insurance  based upon your income or your net worth. Later

on as you get older what happens? When you're in your 60s the kids are out of the nest hopefully

and you have fewer years if you were to die and so  the insurance company might only give you six or  

eight times your income or they'll insure you  for maybe one times your net worth and people  

will use insurance to pay off estate taxes or what  have you and so that's called insurance capacity.

But many times I've had insurance capacity based  on my net worth or my income even when I'm 60 or  

65 years old that is more than I'm using. People  say, "Why buy insurance if you don't need it?", well,  

look at what it does and so I have told my kids, "I want you to be automatic millionaires when I die.  

I want you to all buy a million dollar life  insurance policy on me you're the owner. You're

the premium payor, I'm the insured". So, they own a  million dollar policy they put in you know 500, 600,  

700 dollars a month. Do the math. If you put that much money in an IRA or 401k it would take over 30 years  

at 11 or 12 interest for them to net a million  after-tax on an IRA or 401k. If they put that  

into a policy on me they're going to get a million  bucks any time when I die and I'm not immortal.

I'm gonna die someday and that million dollars can generate 100,000 a year of tax-free  

income for as long as they live by putting it  into a new IUL. I just did this for somebody who

lost actually their their grandparent. So, look at what it does it'll knock the socks off

of an IRA or 401k in my opinion. But many times  people as they grow older if they no longer want  

the insurance the death benefit are no longer  needed or can afford it sometimes they just go,  

just let it go just let it lapse. Well, I've had  people do this where they think, "Well, I'm just

gonna let it lapse I don't need it anymore. Now,  they've been minimum funding or whatever", and I  

go, "Whoa, hold on it's an asset", they go, "What do you  mean? It's a liability,Ii'm having to pay premiums  

and I'm not going to enjoy the benefit it's going  to go to somebody else when I die", I'm going, "Yeah,

look at what it does". Now, there is a market called  the life settlement market. The life settlement

market is simply where you can shop a market of  institutions that will buy life insurance policies.

Why? Because they do the math. So, I've had people  who have a million dollar policy, a three million  

dollar policy, they no longer want it or can afford  it and they shop it among these life settlement  

companies and they have investors and they may  give you you know 500,000 for that 3 million.

They may give you 250,000 bucks for a million  dollar policy cash unless that exceeds the amount  

you paid into it it's tax free. So, before you just  say let it lapse, you know contact me. I can

point you and shop for you you can check me out on 3dimensionalwealth.com and let

me know you're interested and I can point to that  but I've helped many people that have a million  

dollar insurance policy get 150,000, 200,000, 250,000

dollars of cash out of it instead of just  letting it go by selling it to somebody else.

Now, they now own the policy and they have to pay the  premiums but they get a million bucks when you die.

Do the math and so don't just give it up,  it's an asset. If you have 2 million, 3 million,

I was able to help somebody that had a little over  three million of insurance get nearly a million  

dollars out of it that they were going to  just give up if they just let it lapse, okay.  

So, make sure you understand that insurance  can be an asset not a liability and you check  

out all the possibilities. That's why I love  the flexibility behind insurance especially  

indexed universal life because it's the  most flexible. So, to claim your free copy  

of the laser fund. The laser fund is a properly  structured maximum funded indexed universal life  

go to the laser fund or just laserfund.com  click on that link below and you contribute  

a nominal amount towards the shipping and  handling. I'll cover the rest of that cost  

and I'll pay for the book and fire out a hard copy  to you. This is actually two books in one 300 pages  

200 pages of the charts and graphs. Another 100 pages when you flip it over are the stories 62  

of them and so claim your free copy and there's  options there to listen and learn watch and learn.  

There's even an 18-hour master class that my  two sons and I who are co-authors of this book  

do with a very deep dive into these concepts. But  claim your free copy and check out some of our  

virtual events that we do on a regular basis  because this is for you, your brighter future.