At 11:35 there is an incorrect statement. When you die, your beneficiary only receives the death benefit, not the cash value. The cash value is your "equity" share of the death benefit available for loans. The death benefit minus the cash value is the "net amount at risk" that is paid for by the insurance costs inside your premium payment.
Cash value life insurance is not a place to grow wealth. It can provide a tax-advantaged, high-yield savings account to hold money between "real", growth-focused investments. If you're exiting an investment, don't 1031, don't have the next investment ready to go, you need a parking lot for your money, hopefully one that pays interest, and where the after-tax interest outpaces inflation (not Titan Bank sadly).
The cost of insurance of an IUL can be managed when entering your 60s and 70s. Its in the design, that's why it's important to have an insurance professional, who's practice is max funding contracts, design the contract. These policies work best when putting in a lot of cash, or max funded because the cost of insurance goes up every year but with a max funded contract the amount at risk is less each year. When you get into your 60s, one thing to consider when deciding to drop the death benefit down to lower cost, is your health. If your healthy and expect to be around them it makes sense. However, if you have health issues and life expectency is short, then you may opt to keep the death benefit growing. There's a lot more.
Good video. The back door Roth only works when you only have non deductible contributions in the IRA. If some of the account includes pre tax contributions there is a pro rata rule where a % of the Roth conversion becomes taxable, reducing the benefit.
I was recommended to but an IUL and I am so glad I thought about it and didn't do it. Yes, if the market goes down, there is a floor, but there are major concerns when taking a loan. First, the indexes are chosen by the insurance companies so you are giving up control of your money. Second, the cost of insurance goes up every year, so the amount you put to cash value over a uniform contribution goes down with time. Whole life has guarantees!
In a properly structured IUL, YOU DO NOT PAY THE PREMIUM into old age. The point is to front load the cash value so that it can pay itself in old age, and supplement your income. True leverage of this is to have both an IRA AND a properly structured IUL.
I used to have passive and earned income to fund a Roth IRA. I sold my business so now I only have passive and can’t contribute to my Roth IRA anymore. Any suggestions or strategies to be able to still fund my Roth? Thanks
I'm a life insurance agent and I don't hate the video. Life insurance agents can sell any Tax-Free vehicle including ROTH IRA. A few corrections: there are uncapped strategies tied to the S&P 500 with higher participation rates, not knowing of any doesn't mean it doesn't exist. The money in the death benefit is used for more than "if" you were to die. Proper structure matters. Premiums are adjustable and don't continue the life of the policy, interest rates on loans don't go up to 8%. You can change your crediting and index strategy. Roth IRA is still an investment account susceptible to loss and the IUL offers people protection from market loss. You should really only entertain an IUL if you are going to front load the policy and have it paid off in 5-7 years.
Wait! Are you claiming that the cash value goes to your beneficiaries upon your death? Everything I’ve seen says it goes back to the insurance company, and your beneficiaries just get the insurance benefit.
If you are considering IUL, then you should also consider a Reverse Mortgage LINE OF CREDIT(a true regulated HECM loan) The withdrawals are tax free, the up front costs are low, and the growth is pretty good, currently over 7%. There are NO ongoing fees. We have one strictly as an emergency fund or a Long Term Care Fund. It will be worth about $1million in 15 years, and there still will be excess value in the home.
why would you make it complicated, let roth ira accumulate wealth, you don’t even have an rmd, you can actually invest in dividend instruments that gives you a cash flow, i took another life insurance when i was 45 yrs term for 30 yrs pays 55$/mo for 300 mil return of premium when it matures that means i get my monthly insurance payment back, and even pays me half of the policy amt if i want to when diagnosed with terminal condition and the other half to the heirs,easy breezy.
Ask Mat:
matsorensen.com/ask-mat/
I don't think the ask Mat site works... no questions in 4 months? I tried asking one there a while back, but it didn't appear.
At 11:35 there is an incorrect statement. When you die, your beneficiary only receives the death benefit, not the cash value. The cash value is your "equity" share of the death benefit available for loans. The death benefit minus the cash value is the "net amount at risk" that is paid for by the insurance costs inside your premium payment.
Cash value life insurance is not a place to grow wealth. It can provide a tax-advantaged, high-yield savings account to hold money between "real", growth-focused investments. If you're exiting an investment, don't 1031, don't have the next investment ready to go, you need a parking lot for your money, hopefully one that pays interest, and where the after-tax interest outpaces inflation (not Titan Bank sadly).
Keep insurance and investments separate. When you combine, fees abound.
The cost of insurance of an IUL can be managed when entering your 60s and 70s. Its in the design, that's why it's important to have an insurance professional, who's practice is max funding contracts, design the contract. These policies work best when putting in a lot of cash, or max funded because the cost of insurance goes up every year but with a max funded contract the amount at risk is less each year. When you get into your 60s, one thing to consider when deciding to drop the death benefit down to lower cost, is your health. If your healthy and expect to be around them it makes sense. However, if you have health issues and life expectency is short, then you may opt to keep the death benefit growing. There's a lot more.
Good video. The back door Roth only works when you only have non deductible contributions in the IRA. If some of the account includes pre tax contributions there is a pro rata rule where a % of the Roth conversion becomes taxable, reducing the benefit.
I was recommended to but an IUL and I am so glad I thought about it and didn't do it. Yes, if the market goes down, there is a floor, but there are major concerns when taking a loan. First, the indexes are chosen by the insurance companies so you are giving up control of your money. Second, the cost of insurance goes up every year, so the amount you put to cash value over a uniform contribution goes down with time. Whole life has guarantees!
Infinite Banking folks don’t often use IUL’s. Can you do a video on cash value whole life (not IUL)?
In a properly structured IUL, YOU DO NOT PAY THE PREMIUM into old age. The point is to front load the cash value so that it can pay itself in old age, and supplement your income. True leverage of this is to have both an IRA AND a properly structured IUL.
I used to have passive and earned income to fund a Roth IRA. I sold my business so now I only have passive and can’t contribute to my Roth IRA anymore. Any suggestions or strategies to be able to still fund my Roth? Thanks
Life Insurance agents hate this video LOL
I'm a life insurance agent and I don't hate the video. Life insurance agents can sell any Tax-Free vehicle including ROTH IRA. A few corrections: there are uncapped strategies tied to the S&P 500 with higher participation rates, not knowing of any doesn't mean it doesn't exist. The money in the death benefit is used for more than "if" you were to die. Proper structure matters. Premiums are adjustable and don't continue the life of the policy, interest rates on loans don't go up to 8%. You can change your crediting and index strategy. Roth IRA is still an investment account susceptible to loss and the IUL offers people protection from market loss. You should really only entertain an IUL if you are going to front load the policy and have it paid off in 5-7 years.
8:00 . 16:39
Wait! Are you claiming that the cash value goes to your beneficiaries upon your death? Everything I’ve seen says it goes back to the insurance company, and your beneficiaries just get the insurance benefit.
If you are considering IUL, then you should also consider a Reverse Mortgage LINE OF CREDIT(a true regulated HECM loan) The withdrawals are tax free, the up front costs are low, and the growth is pretty good, currently over 7%. There are NO ongoing fees.
We have one strictly as an emergency fund or a Long Term Care Fund. It will be worth about $1million in 15 years, and there still will be excess value in the home.
why would you make it complicated, let roth ira accumulate wealth, you don’t even have an rmd, you can actually invest in dividend instruments that gives you a cash flow, i took another life insurance when i was 45 yrs term for 30 yrs pays 55$/mo for 300 mil return of premium when it matures that means i get my monthly insurance payment back, and even pays me half of the policy amt if i want to when diagnosed with terminal condition and the other half to the heirs,easy breezy.
yayayyayayaya