Ready To Set up a Design like this? Talk with our Life Insurance Experts - www.betterwealth.com/clickhere-life-insurance Get FREE Overfunded Whole Life Insurance Education and Resources - bttr.ly/vault
@@AskSamPugh Hey Sam! Likely your agent is referring to the loan cost (also known as loan spread), which is not the same as the loan rate. The loan cost is the difference between the interest rate/loan charge and the growth rate/crediting rate. At certain points in the last 30 years we have seen interest rates that were lower than the growth or crediting rate - leading to "arbitrage" where you can borrow at X% and your policy still out earnts the interest rate at X+0.5%. In this example, the loan cost was -0.5%. At times, we have seen a "wash" where it is around 0% cost (what your adviser is referring to) but more recently since interest rates have increased so drastically in the last 3 years, we are seeing lending rates between 5.5% and 7%, where, on the other hand, your dividend or growth rate is a smaller percentage, leading to a net cost of borrowing over the 0% you were quoted. Regardless, when set up and used properly the interest rate is irrelevant! As far as how long, it depends on the carrier, I have policies with 3 carriers and they are all about the same timeframe, between 4-7 business days from the request date the loan is in my account.
@@AskSamPugh thats just dumb - no company will give you free money haha - rates change monthly with Lafayette life and a new rate will hit your policy every anniversary, Currently they are at 7% as of this writing. Getting a loan takes about 3-7 days on average depending on the size.
Great video! Thanks. So . . . if I front load with just 40,000 instead of the 400,000 example, can I use the same numbers on the chart you displayed in the video, just moving the decimal over one space? Does it all remain the same?
I was just quoted a patriot 2022 whole life from Lafayette and my cash value illustration percentages where different than the last example. Just want to know why? The riders where exactly the same. 1. My cash % is around 75 instead of 93% 2. Why is the annual dividend on my 38,357 year 1 3,854 and your example has 100,000 with a dividend of 3,578. Seem like the dividend should be based on percentage of cash value? 38 year old, year 1 25k lump sum with 12,977 minimum annual premium contract premium = 38,357 net cash value 24,454 annual dividend = 3,854 increase net cash 28,308
Hard to rank as they don't like to work with brokers who work with other carriers - our company chooses to write with many different mutuals to make sure we get the best product for the clients needs. NYL and NWM, the two largest players in the mutual LI space, make that very difficult and as such, we do not write much business with them.. I say much, because for premiums that are high enough, you can get any "captive" carrier to work with you, as they want to take your client's premium dollars at much as any carrier, they just have to be BIG premiums
This was awesome! I didn't know you could do front load with the LPUA and not the SPUA only. I'd love to see this compared to Mass Mutual. I know their term rider works differently, but I don't understand the nuances. Also, Penn compared to Guardian would be cool to see. Also, how do the accelerated benefits compare for health care needs?
You can do a lot with Lafayette, Guadian, Mass, OA, and even Ameritas in the frontloading space - From a early cash value perspective, Lafayete and Guardian take the cake with Mass coming in right behind. Penn is great for long term funding Guardian is not great for long term funding so that comparison would be pretty one sided to to their restrictions on PUA funding. Most ADB riders are very similar - but they do NOT replace true Long Term Care insurance
Hey I'm new to the concept and your videos are great; what do you suggest doing on year 10th when your dead benefits decreased considerably by 3/4 ? that seems a lot; is that when you borrow against the policy ?
This is a huge drawback to this particular design with this particular carrier - we have ways to maintain a level death benefit long term, but would need to use a different company such as Guardian or Penn Mutual
So are you guys saying that once the term rider with Lafayette Life drops off, the death benefit will not drastically drop like I’ve seen with other policy illustrations?
I think there is a big drop off. The first policy illustration went from 7 something million to 2 million of DB after the term rider was removed. It was only mentioned that other carriers may be able to do something where the drop off won’t be as steep. Something like that.
Kinda - Mass is not as competitive in most cases as they limit ther base to pua ratio to 1:10, so maximum efficiency with Mass will have a higher base premium and a lower first year cash value by default compared to Guardian or Lafayette.
If you have any feedback on how to improve this design or a strategy you think is better for this particular example please let me know 🙏🏻 We highlight all different perspectives on this channel so we’re open to discussions also if you want to come on the show ever also!
Want better wealth? Look elsewhere for better advice. Investments lead to wealth. Everyone knows that life insurance is NOT an investment. So never buy life insurance as an investment.
We agree life insurance isn’t an investment! Would you be interested in coming on the show and having a conversation about why you don’t like life insurance? We might be able to find some common ground and learn some things from each other!
@@BetterWealth Sorry. It's not that I don't like life insurance. I don't like cash value life insurance. The way it is sold and misrepresented should be criminal.
Understood! Would be happy to speak about whole life insurance with you as well. Certainly no pressure but I do believe we could have a good conversation if you wanted to come on the show 😁
Ready To Set up a Design like this? Talk with our Life Insurance Experts - www.betterwealth.com/clickhere-life-insurance
Get FREE Overfunded Whole Life Insurance Education and Resources - bttr.ly/vault
I’ve had my policy for four years and it’s through Lafayette life! I love it! I think they’re a great mutual company!
Their products certainly make some of our design strategies easy! And I love the online loan feature, not all Mutuals have that!
@@AldenArmstronghow long does it take to get your loan and what’s been your interest rate? My agent told me it would be 0% but i don’t believe that
@justincoffman4508 How has their dividend payout been in comparison to your illustration?
@@AskSamPugh Hey Sam! Likely your agent is referring to the loan cost (also known as loan spread), which is not the same as the loan rate. The loan cost is the difference between the interest rate/loan charge and the growth rate/crediting rate. At certain points in the last 30 years we have seen interest rates that were lower than the growth or crediting rate - leading to "arbitrage" where you can borrow at X% and your policy still out earnts the interest rate at X+0.5%. In this example, the loan cost was -0.5%. At times, we have seen a "wash" where it is around 0% cost (what your adviser is referring to) but more recently since interest rates have increased so drastically in the last 3 years, we are seeing lending rates between 5.5% and 7%, where, on the other hand, your dividend or growth rate is a smaller percentage, leading to a net cost of borrowing over the 0% you were quoted. Regardless, when set up and used properly the interest rate is irrelevant!
As far as how long, it depends on the carrier, I have policies with 3 carriers and they are all about the same timeframe, between 4-7 business days from the request date the loan is in my account.
@@AskSamPugh thats just dumb - no company will give you free money haha - rates change monthly with Lafayette life and a new rate will hit your policy every anniversary, Currently they are at 7% as of this writing. Getting a loan takes about 3-7 days on average depending on the size.
What company should we review next?
Ameritas
New York Life
MassMutual and One America
New York Life
New York Life
Suggestion for insurance company to look into is Ameritas. They were also present at the Think Tank and support IBC
We have been getting Ameritas thrown out as a suggestion a lot! It is on the list to review, hopefully before the end of the year!
Loved watching this.
So glad you enjoy this convo!
Knocked it out of the ballpark again Alden!
Woot Woot! So when you gonna join me?!?
Great video! Thanks. So . . . if I front load with just 40,000 instead of the 400,000 example, can I use the same numbers on the chart you displayed in the video, just moving the decimal over one space? Does it all remain the same?
I was just quoted a patriot 2022 whole life from Lafayette and my cash value illustration percentages where different than the last example. Just want to know why? The riders where exactly the same.
1. My cash % is around 75 instead of 93%
2. Why is the annual dividend on my 38,357 year 1 3,854 and your example has 100,000 with a dividend of 3,578. Seem like the dividend should be based on percentage of cash value?
38 year old, year 1 25k lump sum with 12,977 minimum annual premium contract premium = 38,357 net cash value 24,454 annual dividend = 3,854 increase net cash 28,308
Amazing content Caleb and Alden!
Thank you! We have a review of One America dropping next week!
If I get the cash value from my account, why do I have to pay interest to the company not to me, so it’s just like borrowing from bank
Because you’re taking a loan from the company. That allows all of your cash value to continue to grow.
What do you use to simulate future policy numbers?
The illustration software provided by the insurance company :)
Where do you feel like New York Life fits in your rankings for permanent life insurance in cash value focus for WL and VUL?
Great WL and great VUL. I own both.
Hard to rank as they don't like to work with brokers who work with other carriers - our company chooses to write with many different mutuals to make sure we get the best product for the clients needs. NYL and NWM, the two largest players in the mutual LI space, make that very difficult and as such, we do not write much business with them.. I say much, because for premiums that are high enough, you can get any "captive" carrier to work with you, as they want to take your client's premium dollars at much as any carrier, they just have to be BIG premiums
This was awesome! I didn't know you could do front load with the LPUA and not the SPUA only.
I'd love to see this compared to Mass Mutual. I know their term rider works differently, but I don't understand the nuances.
Also, Penn compared to Guardian would be cool to see.
Also, how do the accelerated benefits compare for health care needs?
What's SPUA and LPUA? I've never heard of over funding....
@aprilm4423 "Single premium paid up additions" or "level premium paid up additions." Overfunding means paying into PUAs over the base premium.
@@DallinBunnell Thanks, @DallinBunnell! 💯
You can do a lot with Lafayette, Guadian, Mass, OA, and even Ameritas in the frontloading space - From a early cash value perspective, Lafayete and Guardian take the cake with Mass coming in right behind.
Penn is great for long term funding
Guardian is not great for long term funding so that comparison would be pretty one sided to to their restrictions on PUA funding.
Most ADB riders are very similar - but they do NOT replace true Long Term Care insurance
@@AldenArmstrong thank you!
Hey I'm new to the concept and your videos are great; what do you suggest doing on year 10th when your dead benefits decreased considerably by 3/4 ? that seems a lot; is that when you borrow against the policy ?
This is a huge drawback to this particular design with this particular carrier - we have ways to maintain a level death benefit long term, but would need to use a different company such as Guardian or Penn Mutual
So are you guys saying that once the term rider with Lafayette Life drops off, the death benefit will not drastically drop like I’ve seen with other policy illustrations?
I think there is a big drop off. The first policy illustration went from 7 something million to 2 million of DB after the term rider was removed. It was only mentioned that other carriers may be able to do something where the drop off won’t be as steep. Something like that.
LLIC will have a drop off for sure - Guardian, Penn, Mass, and OA can have little to no drop in DB when doing a frontload
Can the term rider be removed sooner than 10 years in?
Yes after year 7. Lafayette even has a 7 year term rider I like to use for front loaded policies.
yea, what he said!
The old saying still applies, "what looks to good
Do you offer contracting for independent agents??
Email me at caleb@betterwealth.com
I can connect you with someone who can share details of how we can help independent agents 🙏
Kirk Cousins!
Can you mimic this with a Mass policy?
Kinda - Mass is not as competitive in most cases as they limit ther base to pua ratio to 1:10, so maximum efficiency with Mass will have a higher base premium and a lower first year cash value by default compared to Guardian or Lafayette.
Dressing better would help with views
Thanks for the feedback! What would you recommend?
Buyer beware
If you have any feedback on how to improve this design or a strategy you think is better for this particular example please let me know 🙏🏻 We highlight all different perspectives on this channel so we’re open to discussions also if you want to come on the show ever also!
It’s insane when the channel is called betterwealth and is so excited for a 7% loss..🤦🏽♂️🤦🏽♂️
Want better wealth? Look elsewhere for better advice. Investments lead to wealth. Everyone knows that life insurance is NOT an investment. So never buy life insurance as an investment.
We agree life insurance isn’t an investment! Would you be interested in coming on the show and having a conversation about why you don’t like life insurance? We might be able to find some common ground and learn some things from each other!
@@BetterWealth
Sorry. It's not that I don't like life insurance. I don't like cash value life insurance. The way it is sold and misrepresented should be criminal.
Understood! Would be happy to speak about whole life insurance with you as well. Certainly no pressure but I do believe we could have a good conversation if you wanted to come on the show 😁
@@markf.2050hahaha. Called you out to come on the show and you won’t do it!!!!
@@firecraig
Go crawl back underground rock!