WEALTH FORMULA BANKING® | Invest Your Money in Two Places at the Same Time and Amplify Your Returns.

In order to earn income for life, you must recognize the opportunity cost of your dollars. Whole life insurance products can allow your dollars to maximize their potential earnings. When you borrow from your cash value reserve in a whole life insurance policy, you continue to earn interest on the full value of your policy. In this way, each dollar works twice as hard to grow your wealth. Earning interest on your dollars while using them to generate other forms of passive income, like in a real estate investment or for personal development, is a proven method for generating income for life.

Being your own bank means being able to finance your expenses without relying on credit cards, banks, or traditional lenders. The most efficient tool for becoming your own banker is a cash value whole life insurance policy. Backed by mutual insurance companies, whole life insurance builds cash value which you can privately borrow on your terms, while still earning interest on the full value of your policy.

While it’s not technically considered rolling over, funds from an IRA can be used to pay whole life insurance premiums. Using IRS rule 72(t), money can be moved between these two accounts without being penalized for early withdrawal, but the owner will have to pay taxes on the amount withdrawn from the IRA.

There are several benefits to transferring IRA funds to a whole life insurance policy. Contact us If you’re interested in learning more.

Withdrawing money from the cash value of a whole life insurance policy or Wealth Maximization Account does not incur taxes. However, if a policy lapses or is withdrawn beyond the cost basis of the policy, taxes may apply. Funds used for a policy loan are typically not taxed, provided the loan is paid back in full.

• Building a nest egg for retirement

• Sheltering money from the IRS

• Taking out low-interest, tax-free loans

• Increasing the death benefit to a beneficiary

• Growing wealth outside of Wall Street

• Investing in real estate

One of the biggest benefits of a whole life insurance policy is that it isn’t subject to the volatility of markets. Dividend-paying mutual life insurance companies comprise some of the biggest and most financially secure institutions in the world, which is why whole life insurance policies are considered to be much safer investment products than stocks, bonds, and traded commodities.

Policy loans may be taken from your whole life insurance policy without needing preapproval from a bank at an interest rate determined by the insurance carrier. This rate is typically lower than the market rate, and loans can be paid back on the policyholder’s terms. Loans on the cash value of a policy are typically not taxed, but any unpaid amount on the loan will reduce the death benefit, as will any interest accrued.

When the insured individual passes away, beneficiaries must typically submit a claim to the insurance company for the benefits payable. The insurer will then initiate the claims process, which involves verifying the policy, reviewing the claim, and assessing the required documentation for survivor benefits. Once everything is in order and validated, including a death certificate, the death benefit is disbursed to the designated beneficiaries, offering crucial financial support to the eligible surviving spouse or beneficiary during a challenging period. The process timeline varies but insurers aim to expedite this procedure to assist beneficiaries promptly.

Life insurance policies often offer flexibility, allowing policyholders to adjust the death benefit, monthly benefits, or payments to a surviving spouse under specific conditions. Some policies provide options for increasing or decreasing coverage amounts, usually requiring a formal request and potential reevaluation of health and insurability. However, these adjustments might also impact premium amounts and policy terms.

In most cases, the death benefit received from a life insurance policy is not subject to federal income taxation. This means beneficiaries generally receive the entire death benefit amount tax-free. However, there might be exceptions if the policyholder has assigned the benefit to their estate or if the amount exceeds certain thresholds, leading to potential estate tax considerations. Consulting with a tax professional can provide precise guidance based on individual circumstances.