All Forum Posts by: Matt Ruttenberg

@Jeffrey K. That shouldn’t be the case. If you want to be able to reuse the policy over and over, it’s better to.

If you don’t pay back the loan, you’ll need to make sure the policy won’t lapse down the road. An in-force illustration would help with that.

 Completely agree!  These strategies should be only used for investment purposes with buying an appreciating asset.  Thats why the dividend or rate you earn within the policy shouldn't be the primary deciding factor... the outside investment is the sole goal.

It's a great concept and if designed properly, can be very beneficial.  There two schools of thought with either a Whole Life Policy or an Indexed Universal Life policy... I'm a fan of the IUL personally because of the flexibility and a much easier design.  You can use it like a Fix n' Flip then refi out to pay off the loan... rinse, repeat.

It's a good strategy for the right person.  When designed properly and implemented properly throughout the years, it could really be beneficial.

The idea is to keep the death benefit as low as possible to keep the internal costs of insurance down.  If it's used for funding RE, it's designed differently than if needed for death benefit.

Wanted to touch on the taxable interest part... it's only taxable if it becomes a MEC (modified endowment contract).  Meaning, the IRS sees it becoming an investment, basically just like an annuity.  It would also be taxed if the cash value is simply withdrawn instead of loaned against regardless if it's a MEC or not.

The design of these is a balance between the death benefit and the contribution amount, and not allowing it to become a MEC.  The goal is to "squash" the death benefit while maintaining the tax benefits.

I'd be happy to show you a design where it's completely optimized and show you the difference in commissions when designed properly versus not.  3x less in some cases. 

@Alex Xu The difference between the two, is more of a personal choice.  WL is a more steady growth where the IUL has more fluctuation in the returns.  The IUL has more flexibility once the policy is in force where WL is more set with the original plan design.

The goal is "squash" the death benefit down as much as possible in the design.  The internal costs (and commissions) are related to the death benefit amount.  Both types of policies are done in different ways.  Many will say it only benefits the person selling the policy, this is far from the truth when designed properly.  When compared to term commissions, the ratio is higher per premium payment in a term versus WL or IUL when designed properly.

As an administrator of 401k plans, defined benefit plans etc, these aren't to replace a retirement plan or other investment, it's to stack on top of those vehicles.  I wouldn't use these as your first and only contribution vehicle.

The real investment using these policies is what you're investing OUTSIDE of the policy... the real estate.

And finally, these are long term policies.  When designing these for short term access, it hurts the policy long term actually.  The concept is to use these in the short term as the down payment on the properties, or a portion of.  Then, as it grows, use them like a "fix and flip" loan where you pay off the loan with a long term mortgage, just like any other private or hard money loan.  Then, rinse and repeat.

When designed and implemented properly, you should be able to purchase multiple properties over the years, and still have a way to supplement your retirement in the end with the cash value.

Feel free to reach out with any follow up questions.

@Will Fraser infinite banking is actually using life insurance as an asset to lend against when over funded.

@Richard Hadley I’d be happy to discuss if you like to see what could work. Feel free to reach out.

Completely agree!  I was once targeted to be recruited and they have Super Bowl sized rings with their income level on there.  I laughed and walked away.  Very commission centric company.

I wouldn't call IUL's a scam.  There are a few companies that work off of the multi-level marketing business model (World Financial Group for one), but scam wouldn't be the definition.  If it is properly designed, it's a great tool and "piece of the pie".  

I wouldn't use this if you simply need life insurance because you'd want to prioritize other financial needs first.  But again, a piece of the pie.

There are many groups out there that have the opinion it's a scam, but that comes down to the agent and how it's sold to you.  Discuss with multiple agents, planners, and advisors before making a decision.