“Be Your Own Banker” In Simple Easy To Understand Language 2024
Dividend Paying Whole Life Insurance, once you UNDERSTAND and comprehend how it works, allows your imagination to run wild, especially if you’re NOT in debt.
If you’re in debt, the “Be Your Own Banker” strategy will be a little challenging because BORROWING money from a whole life insurance policy without the ability to pay off a debt in FULL defeats the purpose.
So, dividend-paying whole-life insurance is basically a savings account with a death benefit and the option to borrow money from the insurance company. If you listen to Primerica or Dave Ramsey, they’ll tell you to pay the term and invest the rest, which is ridiculous, especially if you’re poor.
There’s no DEATH BENEFIT when you invest; suppose you invest $1000 today, and you die tomorrow; the $1000 you invested will be TAXED at your death. Now, if you put that same $1000 into a WHOLE LIFE insurance policy, that $1000 per month, depending on your age, could be a $1,000,000 cash windfall for your family.
If you have enough money to invest, you should be able to purchase a Dividend-Paying Whole Life insurance policy, which offers a guaranteed death benefit. Now, if you’re on a budget, you should consider buying a whole life insurance policy with a TERM INSURANCE rider.
You need to die with at least a MILLION dollars, and life insurance does this fastest; investing is what you BORROW money from your WHOLE LIFE policy to do.
It’s common sense once you understand how DIVIDEND paying whole life insurance works. When you invest and ONLY purchase term insurance, you’re making yourself and your family VERY vulnerable because there are ZERO non-nada guarantees with term life insurance and mutual funds.
Once you comprehend that whole life insurance revolves around GUARANTEES, being your own banker is second nature.
If you own a dividend-paying whole life insurance contract, you’ve now joined us in the world of GUARANTEED income. The knock on whole life insurance is that the returns are low, but that’s a STUPID way to look at it; if I gave you $50,000 in 10 years, and you gave me back $60,000 and I have permanent life insurance, and I was able to SPEND a large percentage of $50,000 I sent you to INVEST in things that make me money, which could even be mutual funds, why in the hell would ever taste my time purchasing term life insurance?
The only reason I’d purchase term life insurance EXCLUSIVELY in that scenario is if I didn’t comprehend the concept. When you purchase Whole Life Insurance, your insurance company offers you a secure line of credit.
Why does the insurance company do this? If you’re smart, you purchased an enormous DEATH BENEFIT, which the insurance company is contractually obligated to pay you, and they’re trying to lessen the amount by offering you DEBT.
Unlike Term Insurance, Whole Life Insurance deals with GUARANTEES. Once you grasp that concept, be your own banker starts to make a lot of sense.