How Can a High Cash Value Life Insurance Policy Benefit You?
Aug 28, 2021
You don’t have to wait 7-10 years to break-even, let alone see a positive cash value.
Safe Asset to Position Your Money:
Many view Cash Value Life Insurance as a fixed asset, even a bond alternative. A policy that is designed with a 10/90 split will produce strong cash values. This is especially true of the guaranteed values.
Cash Value Life Insurance has been used to produce income for policyholders. Many corporations have practiced this with their executives as a means of creating a corporate retirement benefit.
Infinite Banking Concept:
The Infinite Banking Concept is a great tool that teaches one how to use a Whole Life Insurance Policy as a financing tool. The primary issue we encounter with those interested in cash value insurance as a result of IBC is the capitalization period. Many are not willing to take a -40% hit on their money in the first year and then wait seven years to see a positive cash value. A policy designed for maximum cash value provides more access to capital, allowing one to practice IBC to a greater degree… sooner rather than later.
Tool to Wipe Out Debt:
Debt-consolidation is always a popular topic. Cash Value Life Insurance, often paired with Velocity Banking, is a great means to clear high-interest debt. With that said, it is always beneficial to view the pros/cons to this strategy. No matter how well a policy is designed, we still have a cost in the early years. In the early years, we have an insurance expenses AND a loan interest expense. Yes, using a policy to pay-off debt is effective over the long-haul but it is important to consider the early years. And remember that we have a cost to borrow, as interest accrues on policy loans.