Life insurance might not be the most exciting topic, but what if it was the secret ingredient to securing your financial future and living your best life?
In this episode, John Curry and April Schoen dive deep into the transformative power of whole life insurance and reveal how it can be an essential financial tool for building and safeguarding wealth.
You’ll discover…
Why most people, including sellers, misunderstand life insurance.
The surprising ways whole life insurance can benefit you while you're living.
How life insurance can provide a “permission slip” to spend your savings.
Insights on leveraging whole life insurance for asset protection and financial planning.
Real-life examples of life insurance transforming retirement strategies.
Mentioned in this episode:
Transcript:
April Schoen: Hello, good afternoon. Welcome. My name is April Schoen, and I'm sitting here with John Curry.
John Curry: Hello, April. Hello everyone.
April: And we're excited to just talk to you guys today about the role of whole life insurance and how it can be a powerful financial tool.
John: Easy for you to say!
April: Easy for me to say, that's right. And we're gonna talk about today how, obviously the life insurance has a death benefit, so it's gonna offer protection for your family or beneficiaries. Charities, we're gonna talk through that, of course. But we're also gonna talk about how you can use it to build and safeguard wealth, which is something that not everybody knows that that's something that it can do for them.
John: I would say most people don't know. In fact, I would even argue that most people who are in the business of selling life insurance do not understand how to use the products partly.
April: I think a lot of people just think about it as being something that's left behind for the family. And, of course, there's a purpose and a role for that, which I know we're going to get into. But there are also benefits that you can use while you're alive. Those living benefits, we like to call them.
John: And I can't wait to talk about that. Because being in business 50 years and being 72 years old, I have utilized my life insurance in ways I've never, ever, April would have thought possible.
April: Well, I think it'll be interesting as we go through because I'm 41 you're 72. We could talk about how we both use life insurance in different ways at these different stages of our lives. And I think it'd be great for people to hear about too. Listen, I know that life insurance isn't exactly a fun topic. Most people don't want to talk about it. Most people don't wake up and say, you know what sounds fun today? Learning all about how life insurance works. But we're gonna make it fun along the way.
John: The title of my book on life insurance is Life Insurance, The Essential Financial Tool That Everyone Loves to Hate.
April: That's right, that's right.
John: You know why that is? Because none of us really want to face up to our mortality. And if we talk about life insurance or thinking about it, we're thinking about our death. Same thing we do getting a will done. So that's why people, they don't hate it, once they understand it, they love it, as you know, they want more. But it's that stigma of, yeah, but I don't think about when we talk about dying.
April: We tend to procrastinate sometimes with those hard conversations to have or things that are uncomfortable. So we don't want to talk it. We don't want to think about it.
John: It's not on my agenda to die today.
April: Don't do that. It could really ruin my day, John.
John: Mine too.
April: So here's what we're going to talk about today. We're going to talk about, if you wanted to know, ways that you can build and protect your wealth in predictable ways. If you're looking for tax-efficient strategies to increase your retirement income, if you want security that's not tied to the ups and downs of the market, then you're in the right place, because those are all the things that we're going to talk about today. So, let's get into it.
John: Can I make another comment real quick?
April: Of course.
John: I promise everyone who is listening that if you stick with us, you're going to learn things about insurance that you've never heard anywhere else and probably never will. And ways that you can benefit. I promise you that.
April: So here's what we're talking about. Why you may want life insurance. You'll notice it doesn't say need. It's not necessarily why you may need it but why you may want it. We're gonna go through the different types of life insurance. Key benefits of whole life insurance. We're going to talk a little bit about term insurance and when it makes sense. And then we're also going to talk about some case studies or some real-life examples.
So before we get into the specifics, let's just quickly cover the difference between two types of life insurance that’re available and how they fit into financial planning. Because they're really two different types of products. You can think of them as apples and oranges. And they really do fit in for financial planning in different ways.
So we're going to talk about the key differences between whole life insurance and term life insurance, and then we'll share with you too of how we've used them in our own planning and for clients as well. So, whole life insurance is, it's permanent coverage that doesn't have an expiration date. Sometimes you may hear someone say, it's whole life insurance. It's designed to be in place for your whole life. So it's permanent coverage.
So, the death benefit does not go away. Obviously, it has the death benefit that comes in tax-free to your family, and then it's also going to build cash value. So this cash value is going to grow tax-deferred over time. So you're not paying any taxes while the cash is growing. And on that cash value growth, you can have guaranteed growth, and you could also have potential dividends.
Now, that's going to depend on the insurance company that the policies are with, but we're going to talk a little bit more about that later. But that is something that helps both the cash value and the death benefit growth. But one of the things that we like also about the cash value is, you know, that it can act as an asset on your balance sheet. It's going to provide liquidity and stability in your financial plan.
So we think of it more of like that, along with the savings components on our balance sheets. Along with retirement accounts, investments. You know, it's not that one is better than the other, it's that they work well together in tandem. And then term life insurance is temporary coverage.
So let's say you had a policy that was going to be enforced for 10 years, 20 years, 30 years, you're going to pay a premium for that amount of time. And if you pass away in that time frame, let's say you had a 20-year term policy, then that death benefit would come into the family, tax-free. And at the end of the term, the life insurance goes away. If this is more of a protection-only vehicle, it's not really what we think about for the long term.
It is going to have, initially, a lower cost. So this is really designed to have high coverage, high death benefit amounts with an affordable price. And it's good for younger families that are looking to protect their income against premature death. We joke, whenever I die, it’ll be premature, right? But, we really think about younger families. I give myself as an example. I'm married.
I have two boys who are eight and 11, so I have a lot of financial responsibility. You know, if something happened to me tomorrow, not only would my family have an emotional loss, but they'd have a financial one as well. And I've taken care of that risk. I've taken that risk off the table with the life insurance that I have. So I have term life insurance to come in to help replace my income for the family.
John: And you've locked in your future insurability by doing that. I have a quick question for you and everyone who's listening. Would you rather own a house or rent a house?
April: Own.
John: Tell me why.
April: I'm going to build equity.
John: That's what whole life does. Whole Life is like owning the house. The term insurance is like renting the house. And there's a lot of benefits of ownership that none of us would ever dispute, and that's the difference between the two types of coverages. If you break it down to the most simple, simple explanation. You own it, you have control of it. You've got equity, tax-deferred growth on it, just like home equity.
Term, you have coverage, but then once it's up, you lose it. And I would argue that it's not the lowest cost, it might be the most, it may have a lower premium, but if we're truly measured economically, like you and I have been trained to do and we educate our clients. It's usually more expensive to have term and do something else than to have the whole life.
April: Sure. Yeah. So I have, I both. I have term insurance, and I have whole life. So I have the term to have a larger death benefit today for the family, like I said, if something happened to me tomorrow, because it's important to me that financially for them, life is the same. If something happened to me, I want my husband, like you mentioned the house.
I want him to be able to stay in the house. I don't want him to have to sell the house because they can't afford it now. And we've seen that happen with people. I want vacations to be the same and college funds to be the same. I want future weddings paid for. There are all these things that I want to still happen for my boys.
John: Think about what you're saying. What you want is the path you're on, you don't want your family to have to abandon that because of lack of financial resources. So you're insuring those financial resources. Which is huge. The most important financial asset you have is yourself because the economic value you create by working.
April: Absolutely. So make sure those protections are going to be there. Now, I'm not planning on dying tomorrow, and so that's why I also have the whole life insurance that I do. That's part of my wealth-building strategy. I know, as we're getting into that today, I'm going to share some more about my viewpoints on that too. So, before we get into more about these different types of insurance, I just want to pose a question.
If we were, let's say we had a blank sheet of paper and we're designing like the perfect financial tool, one that's going to provide you security, flexibility, long-term success. What would some of those characteristics be? What would you want this tool to do? Or maybe to even not do? And I'm going to give you a list here of some things that we've put together when we start thinking about what would be an ideal financial strategy.
Well, one, we want to minimize risk and loss of money. We don't want to put our hard-earned money, savings at unnecessary risk. So we'd want a financial tool that's going to offer stability. That's going to offer protection.
We want to minimize taxes both while it's growing and when we go to take it out in the future. Taxes are something that can eat away at our wealth over time. So we want a tool that's going to allow for some more tax-efficient growth and also tax-advantage distribution. I want to have my cake and eat it, too. On both sides of that.
John: Absolutely.
April: We want to earn a competitive rate of return. We don't want to just sit stagnant. We want our money to grow at a reasonable rate. We wanted to outpace inflation. We want to have long-term financial success. We want to be able to access our money throughout our lives. Flexibility is key. We should be able to access the funds when we need them, whether that's in our working years, retirement, or some sort of unexpected expenses that may come up.
We want to be able to prepare for contingencies like death, disability, emergencies, unforeseen factors. Because we all know life happens. The ideal financial tools should be able to provide some built-in safety net for all of those things. And so what if we told you then that this financial tool does exist today, there is something that can do all of that, and this is where that life insurance fits in.
The whole life insurance can check off those boxes, and that's what we're going to talk about next. So let's get into some of the key benefits here, of when we think about the whole life insurance and how that fits into your overall strategy, and why it's going to check off some of those boxes that we talked about.
So first, it's going to have this income tax-free death benefit to your beneficiaries. So if you pass away, or when you pass away, that death benefit is going to come in tax-free. Could be to the family. It could be to an organization, a charity that you care about. But it's going to come in income tax free, which is unlike other assets that could be subject to estate taxes, income taxes. You think about if you're leaving retirement accounts behind.
We were just talking with a client yesterday about wanting to leave some property to their daughter and how was the best way, from a tax perspective, to do that. So it's going to allow you to have more effective, easy legacy creation. It can include that guaranteed growth on the cash value and potential dividends. So whole life insurance offers guaranteed cash value growth, meaning that your policy value is going to increase every year, regardless of market conditions.
We like to say it never has a bad day like when the market does. And not only does it have guaranteed growth, but many policies also pay dividends, which can be used to increase cash value, buy additional coverage, and can even be used to take as cash. We were just talking with a client who's retired and has her life insurance policy, and we were just talking about the options for her to use the dividends to supplement her income.
John: Take them in cash. Spend it if you want to.
April: That's right. So dividends are not guaranteed. Many financially strong insurance companies have a long history, though, of consistently paying them. So when we get to talking about, we start thinking about the insurance company and who you should be using, that's one of the things that you want to look at. What is their dividend history? The cash is going to grow tax-deferred.
So, unlike taxable investment accounts, the cash value grows tax-deferred. You're not paying taxes on the gains every year. That means you get to keep more money in your pocket. This means your money is allowed to compound faster, which can help have longer term growth, and it's going to give you more flexibility in retirement because you can access those funds on a more tax-advantaged basis. The cash value is also liquid and available to you at any time.
So unlike retirement accounts, where you might have to wait till you're 59 and a half, or you have to wait, let's say you can have an account for five years or more with some stipulations, you can have access to this along the way. So what are some things that you can use the cash value for? You can use it to cover unexpected expenses, pay college tuition, start a business, supplement retirement income. There's lots of flexibility.
John: Buy a house.
April: Buy a house.
John: I literally bought a house on the Florida River by using the cash values instead of using the bank money. I used the cash value loan, bought the property, and then I went and got a permanent financing letter. I was able to close on it, there were four couples wanting to buy it, and I told the seller. I said, I can have the money in 24 hours. He said, no way. I said, yep. He said, how do I know that? I said, hang on.
I called the insurance company, got the lady on the phone, said we could overnight a check. He says, okay, it's yours. I went straight to the end of the back. Same thing with the house right down the road that I bought in May of '94. I was going to use money and my mutual funds for the down payment and closing costs. Market was down bad in May of '94.
So instead of doing that, I borrowed on my life insurance policy. I used that money to get into the house. When the market came back up, I cashed in the mutual fund when it grew again. I could give you a dozen examples of how I've used it. Cars, business equipment, health insurance costs, not health insurance costs, but health costs when my mother got sick. I can easily give you a dozen, probably 20, that I've used, personally.
April: Lots of flexibility. That's what I a lot of people can get. Don't realize the flexibility.
John: I feel so strongly about it that the only other asset that I might consider more important might be my house. And I'm not even sure about that. House could blow away because of the cash value I can get a new house. If my cash value to blew away I'd be in trouble.
April: That's right. Well, speaking of some protection there, too. This is going to depend on your state, but you can have asset protection where the cash value is shielded from lawsuits and creditors. But again, this is going to depend on state law, so you really want to pay attention to that. We're in Florida. So here Florida, cash value is fully protected from lawsuits and creditors. You can have flexibility to adjust premiums.
So you might could, again, we talked about the dividends, so you could use the dividends to reduce premiums, cover them for a period of time. You can modify the payment schedules as well. So it can be more flexible and fit into that long-term plan. You're not stuck with it a certain way. And it's also a non-correlated asset.
So what does that mean? That means the cash value growth is not tied to the stock market. It gives you that more stability. So where we're going to see our investments, our retirement accounts, rise and fall with the market, this is going to be providing more like that, steady growth, no matter what's happening in the economy.
So you can use this for more than just protection. It's a very versatile financial tool. And so next, we're going to get into how this can go into financial planning and then talk about some other key benefits as well. So how can it help you in retirement? Because sometimes people say, well, I'm going to retire, so I don't need my life insurance anymore. And the key word there is need. You may not need it, but you may want what it can do for you.
So let's talk about where this fits in with overall retirement planning. John and I work with a lot of clients who are getting ready to retire and are into retirement, and so I can tell you, from us sitting with hundreds and hundreds of clients that one of the biggest concerns that they face is how much can they take from their money, their investments, their retirement accounts, without running out of money?
And this is true for someone who's getting close to retirement and also into it. So we see this all the time about how much can I take out or maybe I need something, I don't want to spend it, because it's my just in case money. Just in case I need it, just in case this happens, just in case that happens.
John: And they don't use it so they end up leaving it behind, and someone else does all the things that they never got around to doing. I want to make a quick comment about something. You talked about you may not need a life insurance in retirement. People are guilty of canceling policies when they retire. I don't need it. But yet, you can't turn the television on now without seeing an ad for somebody willing to buy existing life insurance policies.
So think that through for a minute. You got a third-party company who's willing to buy your life insurance policy or buy mine. They'd rather have mine because my age and health. So why would they want to do that? Because ultimately, there is going to be what's called the inevitable gain of a life insurance policy. Someday, you're going to die.
That money will come in tax-free to someone. If I even bought it as an investment, maybe I pay tax on it, but it's still money I get that's guaranteed. So people are being told you don't need the insurance anymore. It's actually a sales pitch. You don't need this.
You know, you're now retired. Let us buy the policy, and they'll give you money for the policy. Now, when you die, they get the death benefit. And all the cash value build up that's inside that policy is now theirs. So think through. A third party is willing to buy your policy. Why in the hell would you give it up? There i no way you're getting my policy. Period.
April: It's more economically beneficial for them.
John: Absolutely.
April: Than it is for you. Absolutely. So let's talk about this with this retirement planning. You know, a lot of people will underspend in their retirement. They don't spend what they could, because it's out of fear that how long am I going to live? Am I going to run out of my money? Is my spouse going to run out of money?
So that's where we see they can underspend. So this is where some of the insurance can help, because if it's structured properly, this can actually give you a permission slip to spend other assets. So you know, you might hesitate to say, oh, I don't want to take too much out of my retirement accounts or my investments because I don't know how long I'm going to need them.
But this is going to allow you to have more certainty because the life insurance is going to provide that guaranteed death benefit. So this is going to be more a safety net. It's going to allow you to spend down your other asset because you know the death benefit is going to come in tax-free. So let me give you an example.
Let's say there's a couple, husband and wife, they're stepping into retirement. And let's say the husband has most of his retirement savings in a 401k. And again, he might worry about not wanting to take too much out, because how long am I going to need it for? Is it 20 years, 30 years, 40 years? How long is this bucket of money going to have to last me? So, instead of just taking out what they truly need, they might take out less.
They might take out the bare minimum, which is going to just limit how much they can enjoy in retirement. So now think about the opposite, though. And let's just use some, we'll use some numbers too. But let's say that they had an equal amount in life insurance death benefit that he has in his 401k. How does that change his planning? What does that now allow him to do it?
John: He could spend every dollar, they could spend every dollar, and then we get into the best ways of using the money. Because if it's done properly, they increase their income and still not run out of money. But I'm in that mode now. At 72, I'm drawing down on assets that I want to use for things, and knowing that upon my death, all of my inheritance wishes are taken care of with life insurance.
Everything else goes into the trust, so retirement accounts, investment accounts, real estate holdings, all that it's free and clear. That can go into the trust to provide additional benefits to the people that I love and care about. But I have the ability to take care of me first, without hurting them. So sounds kind of strange. If I didn't have a life insurance, somebody's gonna get short-changed, right? Either I will because I didn't enjoy the money, or they will because I did enjoy the money to improve my quality of life, and I spent it all.
April: Yeah, if you don't have insurance, your assets become your insurance.
John: Absolutely. Assets are not good insurance. And insurance is not good assets, as far as the death benefit goes. In order for it to become an asset, the death benefit itself, you got to be dead. But you can benefit from it without actually dying is the key point
April: So in this example, for this couple, if he knows that the life insurance is going to come in tax-free to fill that bucket back up, then he can spend every dollar. And then I agree with you, there's always some planning and strategies they can use to where they make sure they don't run out of money in that 401k. But even if they did, let's just say worst-case scenario happened. They still have their cash value.
John: Correct.
April: That they could rely on if they needed to.
John: Let me amplify that, because I'm in a position now where I took a chunk of my retirement lump sum money and created a stream of income that will last me the rest of my me the rest of my life. Again, now I have more income. I don't have to worry about it. On the first day of each month, that check is direct deposited in my checking account.
In addition, the life insurance is more than enough to replace that income upon my death. The cash values of the various policies I own I can tap into if I want more money for anything. I'll take a vacation. If I want more income, I don't need it, still working. The peace of mind is just unbelievable knowing.
April: It gives you that flexibility and that control. So it allows you then to confidently spend on other assets, knowing that you have this death benefit that's going to pass to the family tax-free. So again, it's getting more of that confidence and really letting you then have more control over what you do and don't do in retirement. So let's talk about some of the other benefits, but beyond just some of the security and stability that can enhance your overall plan.
So we talked about this a little bit earlier, but may provide asset protection from lawsuits and creditors. Again, this is going to depend on state laws, but again, in Florida, cash value is protected from lawsuits and creditors. So this can be a very attractive option for business owners, professionals, high net worth individuals who want to make sure that they're protecting their wealth to have those protections in place for those unforeseen situations.
April: So this can also give you more control. So I'm going to talk through a few things here on the control and flexibility side. One is having no tax penalties. So if you access the cash value before age 59 and a half, so unlike other retirement accounts, you're not going to have tax penalties. There's also no required minimum distribution. So you aren't forced to withdraw funds from this at a certain time like you are with those tax-deferred vehicles.
This is going to give you more control over your taxes because you can strategically decide how to use the cash value to supplement income if you want, which can help you reduce your taxes. And again, there's no market risk, so your cash value is not affected when the market is down, which is going to allow you to time your withdrawals better. We're going to talk about that a little bit more later, what that actually means.
But you can use the cash value for income when the market's down so that your investments have more time to recover instead of selling at a loss. Like John was talking about earlier with buying the house. Very strategic thing to do. Some people say, oh, well, the market is down. I'm just gonna do it anyway. But you can have other options and help you have another outcome.
John: Think about it. If I had taken that, I don't know what it was, just called $20,000. Let's say I had taken that out of a mutual fund. Well, I would never get that back because of sound. If it's not in the account, it can't grow, it can't recover. But I was able to weather the storm, and then 12, 13 months, whatever it was, the market was back, and I was able to use the money.
April: It's a great strategy. So not all life insurance companies are the same. So when you're thinking about a policy, you really want to take a look at the company and make sure that you're using a company that has a strong financial foundation, and it's going to have some favorable features and benefits as well.
So here are a couple things you want to look for. You want to look for strong financial ratings, and also a company that's been around for a long time, so it has a long-standing history. We would say, look for company that's got 100 plus years of history. This is going to show stability, reliability. Think about all those economic things that they would have gone through in the last 100-plus years.
That's also going to help make sure that company can deliver on guarantees and pay dividends. You want to look at dividend performance in history to understand how that's been changed over time. So you want to look for a good, strong dividend history, and also look for fixed loan terms instead of variable loans rates.
That's something we were just walking through with a client the other day. And then looking at also just the different options they give, they have for you that you have availability of some policies that can build cash earlier in the policy, early cash value growth. Also allowing for convert a term insurance policy like I was talking about earlier.
This can allow you to seamlessly convert that to a whole life policy with no medical underwriting. That's what John meant about for me having the term that I've locked in my insurability. So yes, I have the protection now, but what I'm doing is I'm strategically converting part of the term to whole life. And so doing that, I don't have to worry about the medical underwriting again.
That's what I've done over the years. I have no term insurance now, over the years, I've actually got it all upgraded. We call it converting in the business, but it's upgrading it to permanent, good quality of whole life insurance. And also we need to talk about the different types of companies.
You have mutual companies, we have stock companies.
And the best way to describe it think about a bank. A vehicle like a stock company. Okay, what's the bank's role? Board of directors is what? They got to make as much profit for the shareholders as possible, versus a credit union that works for the benefit of their members. So a mutual life insurance company is the preferred company if you can get your coverage there, because you're going to participate in the surplus, meaning, if there's a surplus at the end of the year, that's what determines that dividend.
And I started off with a stock company 50 years ago, and I wish I had been with the company we're with now, with Guardian all that time because of their performance. And there's a big difference. I would say that most people have never had that explained to them in a way that they can see what that policy might look like, performance-wise, 10, 20, 30, 40, 50 years down the road.
April: Yeah. I, you know, I also worked for a stock company at first and saw firsthand new decisions that were made, like you said, to benefit more the board of directors or the stock shareholders, not necessarily the policy owners.
John: And I'm not picking on the stock companies because, frankly, I own some stock in some of those companies, via the ETFs and mutual funds. And if you have mutual funds, you do too out there. But if I'm going to want to protect my family and give me the best bang for the buck, then I want mine with a good quality mutual company. I did that many years ago.
April: Absolutely. So, let's get into some examples. Talk about some real-life examples where we've seen this come into play.
John: Before you go there, would you go back to that previous slide when you're talking about the cash value and designing policies. Let's talk about that for a moment. I think it's very important that everyone listening that whether it be us or someone else, find someone that doesn't just dabble at the insurance side. They're an insurance specialist. When I started 50 years ago, that's all I did was life insurance.
Term insurance, whole life insurance, that was it. And then later, I wanted to do more of the financial planning. So two years later, 1977, I proceeded to become licensed to be able to do any type of investment account. But too many people don't do life insurance full-time. That's kind of like their dabble. They're called a broker. Find someone, whether it's us or someone like us, that can sit down with you and help you design the plan.
Because there are different policies. It's like a toolkit, a toolbox. We've got all these policies, like different tools in that box that we can use. I own seven different policies, different types, all life category, but they are a different type of whole life for various reasons. But I just thought about needing to share that.
April: Absolutely. Okay, so real-life examples. So let's get into a few things here. One is obviously creating a legacy through the death benefit. So we'll talk about some options here. But this is really going to ensure, again, that your loved ones are protected. That they receive that tax-free inheritance when you pass away. So what can that be used for? It can be used for a spouse. It can be used to cover taxes, expenses.
It can be used to leave a financial gift for children, charities like organizations that you care about. And you know, unlike market investments that are more market-based, this is going to have that guaranteed death benefit that's going to have more of that financial security than you can think of again, spouse, future generations.
So, sadly, last year, we had one of our clients pass away, and going through and doing some income planning for his wife, she was going to lose a big chunk of their retirement income because she was losing one of their social security benefits. And he had life insurance. And so she was able to take part of the life insurance to replace the income that she lost from Social Security.
She was also able to do some gifting. And this was very important to her, that she wanted to give money to her son, that she wanted to give money to her grandson, who's in high school, to make sure that he could pay for college. And so she was able to do all of those things. Have the income that she needs now, and also be able to gift things now, while she's still alive, to be able to see them enjoy it.
You can use that cash value as liquidity, and so you can use it at any time for any reason. We gave some examples earlier. But we've had clients use it to buy a car, buy a house, an investment property, pay for medical expenses, pay to renovate the home, pay for kids’ college. There's a lot of options, float payroll.
So there's a lot of different options out there why you can use the cash value if you need to along the way. And then you can also use it to supplement retirement income. So again, this is that cash value piece of the client, which was talking about, who used his life insurance to replace income she was losing. Well, she has her life insurance policy as well. Now she's doing great and fine and wonderful financially.
She's not going to need to tap into that. That was likely just the death benefit will go to the family when she's passed away. But she does have it, just in case. It's going to be kind of that backstop for her, where, if she does need more income, let's say she needed it for care. That's an option, too, that she could use the cash value of her own policy.
John: I have a thought that I'm going to share. I own policies on several family members. So if you're sitting there thinking, well, maybe I'm to the point of where I'm uninsurable, I can't get life insurance, or I think the cost will be too high. The benefits of life insurance would help a lot of people. So in my situation, I own the policies, therefore, the cash value is under my control.
I reserve the right to use that for me first, if I need to. But along the way, I've allowed different people and family, to use some of the cash to go buy a car, whatever, by doing a policy loan or as collateral for a loan. Then make sure to pay back. But as long as I'm living I own the policy. I die my trust owns the policy. The structure is this benefit is in place to take care of their families later in life. And by making those premium payments. I'm saving money that I can use for them.
I just paid two premiums last week on two policies I didn't have to. You mentioned the dividends earlier, April. I could have used the dividends, and had planned to, to offset the premiums to pay it for me, and it would have paid it in full on two people. But instead, I made the premium payment. On one of them, it's $8,009. The cash value increased when I made that payment of $8,009. Guess what the increase was for this year?
April: What was it?
John: $15,000.
April: Wow.
John: Almost double. Because it's been a force for a long time. So when I look at what I'm earning on savings accounts, I said, that's crazy. I took the money out of my savings account, paid the premium. And I can look at it each year and make that choice. But don't rule out insuring other people that you care about, because you, especially with children and grandchildren, imagine this. Long after I'm dead and gone, they have insurance in place that will help them. For everything you've covered here today, it would help them later, because of me doing it today.
April: Yeah, that's why I have insurance on the boys.
John: And it protects their insurability. My son was in a terrible accident, car accident in June of 2012. Unisurable for a long time, probably still is. But fortunately, I had term insurance on him. A lot. As much as the company would let me get. Also had insurability options on him. So, every time one comes up, there are two more. And when they come up, I'll exercise them. That way I'll get him covered because he couldn't get the same coverage. He could get the same coverage today, but it wouldn't be at the same premiums. Let's put it that way. It'd be much higher.
April: Yeah, so I think we've covered a lot here thinking about, yes, there is a protection from the death benefit, but it also is that powerful financial tool that's going to provide more of that security, liquidity, financial control.
John: I just thought of something else. I have two charities that I support, and so one of my life insurance policies, those two charities are the beneficiary. So money that I'm giving them while here today, when I die, they would lose that, wouldn't they? If I'm not here, they get no gifts. So the life insurance, by going to the foundations for these two organizations, will help continue the things that I've been doing while living.
April: It's very powerful.
John: It's very powerful. Long after I'm dead and gone, they're still getting the benefit of that. They'll take the proceeds, they'll invest it to help with the foundation's needs.
April: That's awesome. So today, you know, we've covered a lot of these strategies. Thinking about how to build, protect, grow wealth. And so the question that is going to be is, is this strategy right for you? And it's really important that you don't try to implement these strategies on your own without some professional guidance, because the last thing you want to do is make a mistake that's going to cost you taxes, lost opportunities, financial security.
So make sure you don't make a mistake. So make sure you're working with someone on these strategies. And if you're curious about them, then I encourage us to schedule a time for a consultation. So at this call, at this session, what we would do is, we're going to help you get clarity. Clarity on your financial goals and concerns. We're going to help you identify opportunities. Is it one of the strategies we talked about here?
Would one of those be a good fit for you? We're going to talk about are there any roadblocks in your way. And then also map out some next steps that’re going to help save you time, money, and effort, getting you closer to those goals than you have. And I don't know if we're the right fit for you, because we're not the right fit for everyone, but I can tell you that after having this session, we can determine if it makes sense for us to continue working together.
So again, this call is complimentary. There's no charge for it. And so this call would really be for you if you're motivated, you're committed to reaching your goals, you're coachable, open open-minded, you're willing to listen to some new ideas, and that you're an action taker. But this calls not for you if you're not coachable, you're not open to any professional guidance, and if you're just really expecting a lot of free consulting along the way.
So the best way to schedule a call is you can go to our website, which is curryschoenfinancial.com, and there's gonna be a button that says, book a call. It's very easy. It's gonna take you a link to my calendar. You can select a 30-minute call, and you'll see the times that are available.
You can also call our office. So you could call 850-562-3000. Again, the number is 850-562-3000, and you can tell Luke or Leslie that you were on the webinar, that you heard our podcast or our YouTube video, and that you'd like to schedule a time for your complimentary consultation. I hope you guys enjoyed today. We look forward to helping you take the next best step to having a more confident and secure financial future, and we look forward to talking to you next time.
John: This was fun. I enjoyed doing this. Have a good day, folks.
April: Bye, now.
Voiceover: Whole life insurance is intended to provide death benefit protection for an individual's entire life with payment of the required guaranteed premiums. You will receive a guaranteed death benefit and guaranteed cash. Cash values inside the policy. Guarantees are based on the claims paying ability of the issuing insurance company. Dividends are not guaranteed and are declared annually by the issuing insurance company's Board of Directors. Any loans or withdrawals reduce the policy's death benefits and cash values and affect the policy's dividends and guarantees. Whole life insurance should be considered for its long term interest value. Each cash value accumulation and early payment of dividends depend on policy type and or policy design and cash value accumulation is offset by insurance and company expenses.
Consult with your guardian representative and refer to your whole life insurance illustration for more information about your particular whole life insurance policy. Although noted as clients, the examples given in this podcast guests are all hypothetical and fictional and have been created solely for educational purposes. Any resemblance to existing situations, persons or financial characters is coincidental. The information presented should not be used as the basis for any specific advice. This promotional information is not approved or endorsed by the Florida Retirement System or the division of retirement. Neither Guardian nor its affiliates are associated with the Florida Retirement System or the division of retirement. This material is intended for general public use. By providing this content, Park Avenue Securities, LLC, and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation or to otherwise act in a fiduciary capacity.
If you'd like additional information about our services, visit our website at curryschoenfinancial.com, or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities, Guardian, or North Florida Financial, and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities, LLC. Address: 1700 Summit Lake Drive, Suite 200, Tallahassee, Florida, 32317. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.
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