Infinite Banking: 10 Mistakes When Buying Life Insurance

– Let’s talk about the top
10 mistakes that people make when they’re buying life insurance. Now this is not intended to scare you and put you in a position of fear and being worried about
making the wrong decision. What we wanna do is help
highlight these mistakes that people make so that you
can use them as a springboard to help you make the best life insurance purchase decision possible. Now the number one thing
that people get wrong is that they don’t buy
their human life value, in terms of insurance. What do I mean by that? Well, there is an amount that
the life insurance company will issue you as the
maximum life insurance that you qualify for. And that is the amount that
you want to have in place. The reason is that if you’re
just doing an analysis of what you think you need,
based on maybe your mortgage, how much loans that you have
that are still outstanding, how much it’s gonna cost to
send the kids to college, how much you think your spouse might need to carry on their
lifestyle in your absence, those numbers normally
end up falling short. And they tend to lean towards
having the minimum required to keep your life moving forward, or your families life, in your absence. You wanna make sure that your
death benefit is high enough that if you are not able to live out your full length of days in your lifespan, and your time is cut short, that you still are able to
fill up those wealth tanks with everything that you would have put in had you continued living
and working and investing, so that your family can
continue on that life that you’re wanting to create for them. Now the second mistake that people make is not getting the right policy type. Now there’s multiple types of insurance. And we’ve talked before about
term, universal, whole life. What happens here is a lot
of times we swing towards what we think is maybe best in the moment for various reasons. But term insurance is
something that is in force for a length of time. This is not going to
be your whole lifespan. That is something that you
might need to put in place if you’re trying to get
your full human life value. But you’re gonna wanna make sure that that’s not where you stop. The reason is that you want a product that’s gonna be with you
for your full lifespan. Now here’s a note about
universal and variable types of insurance policies, and why we do not recommend
them and why we don’t use them and why I would never have
one on myself or my family. With those types of policies you can often run into problems where
the illustration shows you putting in a certain
dollar amount of premium in order to maintain that
policy and keep it in force. But the cost of insurance
over time can creep up to the point where you actually
need to put more dollars in than what was shown in
the initial illustration just to keep the policy in force. That unfortunately is a really
precarious position to be in, especially when you’re
facing your 70’s and 80’s and you’re looking at the
time span of your life where you really need that policy to be able to pay out for you. So we wanna make sure that
you have whole life insurance. Now whole life insurance will be in force for your entire life, and
it will build cash value. Which is a valuable
component of you being able to control your capital
and have access to it and really be able to have
a storage tank of money that is usable, safe, liquid and growing. The third mistake that people make when buying life insurance
is they try to save money. And I know this sounds like something that would be noble to achieve,
to spend the least possible, but in this pursuit,
often people end up making that completely wrong decision
for the wrong reasons. Now if you’re just trying to
get the cheapest product today, you’re gonna buy something different than if you’re looking at the
best cost over your lifetime. Let me tell you something
really interesting. If you are young and healthy today, you could be in a position
where term life insurance could be very low cost,
and you could save money by having term insurance for
the shortest span of time, say a 10 year policy. But what happens when that
10 year policy expires? The policy then needs to be renewed, and you’ll have a higher rate
to pay to keep that in force. So if you’re looking for
the cheapest possible, you’re probably gonna cut
corners on human life value and not get as much insurance as you need. You’re probably also going to
get a lower premium product where you have less
dollars going towards it. But A, it’s not building cash value. B, it’s probably not gonna be in force your whole entire life for you. And C, you’re gonna be in a position where you might actually
end up spending more over the course of your whole life, because term insurance becomes
very expensive to renew. If you look at a typical
illustration for a term product, and you look at the renewal
rate, and what would be due if you kept that same policy
in force after the term is out, you will typically find that about age 77 you will have paid more in premium dollars than you would receive in
death benefit for that policy. So if you’re looking to save money, term is not the way to
go if you’re looking at a big picture perspective
over you’re entire life. Make sure that saving money today is not your primary objective. The fourth mistake that people make when they buy life insurance
is relying on group coverage. Now this might be coverage
that’s available to you through an employer, and
it’s probably very low cost per the amount of death benefit you get. But a lot of times people
say I have $100,000 policy in force at my job, therefor I’m good and I don’t need life insurance. There’s several problems with that. One, it’s typically not portable. Meaning that when you leave that job, whether voluntarily or involuntarily, that coverage does not
transfer over with you. Meaning you don’t carry it along with you. So whenever you leave that employment, you no longer have life insurance. Make sure that you have your
own life insurance policy, that you are the owner, that you can carry that policy
with you wherever you go, and it’s not dependent on an
employer keeping that in force. The fifth problem that
people typically run into in the mistake that they make when they’re buying life insurance, is that they don’t have
the right product design. Now this is very specific to
you and what your purposes are that you want to accomplish. But for instance, if you
are looking at a policy that has the maximum early cash value and a maximum long term growth, that you wanna use this
for privatized banking, you wanna be able to invest
your assets and your capital by borrowing against the
policy and putting that money into other investments that
are gonna cash flow for you. Or maybe you also wanna make sure that you have some income stream, something to rely on in
your later years of life. You want to make sure
that you have a policy that’s designed correctly. And most agents unfortunately
are not familiar with designing policies
that are meant to be used. They’re typically looking at
policies that just accumulate, that build up a cash value
and a death benefit over time. And yes they do stay in force for you, however if you wanna use your cash value you really need to make sure that you have specific elements in place in that policy so that you can access,
usually with the right design, about 50 to 60% of your premium dollars in the very first year, right
as soon as that check clears, that you can then borrow against and go put to work in
an outside investment. The sixth mistake that people make is not being with the
right insurance carrier. First of all, it needs to
be with a mutual company. They need to have high financial ratings. That means a Standard and Poor’s, or Fitch’s or A.m. Best
rating of A minus or better. They need to have a Comdex
score of at least 80 or better. That’s a scale of one to 100, rating the financial
strength of that company. You wanna make sure
that they’ve been around for 100 plus years and
they’ve paid dividends throughout that whole time. Meaning that they’ve
been stable enough to pay through the Great Depression
and the Great Recession, and they’re probably not going
to be failing anytime soon. The seventh mistake that
too many people make when they buy a life insurance product, is that they don’t have
the right riders in place. Now what do I mean by riders? There’s specific things that
you can put into the policy that will make it perform better for you. One of those riders are making sure you have paid up additions. And this is a key part
of your policy design. You also wanna make sure
you have waiver of premium. Now this allows the
policy to stay in force if you become disabled, lose your income and are unable to maintain
the policy premium as a result of that disability. The policy instead will
continue to progress forward and will self fund, allowing you to keep that critical life
insurance policy in force at the time that you need it the most. Now you can also have an
accelerated death benefit rider which acts kind of like
a long term care rider, and you are able to use that
death benefit before you die in certain cases of critical illness. You also wanna make sure that
for any term life insurance that you do have in force,
which more than likely you will need in order to
make sure that you have up to your human life value, you want that to be convertible. That means that at your choosing,
you have convert that over to a whole life insurance product. And that will then give
you more life insurance, more death benefit and more
longevity on your policy. The eighth mistake that
I see people making when they purchase life
insurance is over analyzing. Now this probably also
goes without saying, but sometimes we can suffer
from paralysis analysis or analysis paralysis. And really what happens is we second guess our decisions so much or we over analyze. We look at illustrations and
we’re comparing line by line with a microscope and a fine tooth comb, and looking to see which
policy’s gonna perform better, which one is going to
have the better dividends, which one’s a stronger company, and we can really get
into that microscopic view where we’re not really
being able to move forward. What we want to do is be able
to know the most important things about the life insurance company and the right financial
professional to be working with that knows your objectives
and the strategy that you’re looking to accomplish, and is able to carry that forward. Now this goes right into the ninth mistake that I see people making, and it’s not buying life
insurance soon enough. Almost everyone who buys
life insurance always said I wish I would’ve known about this earlier and started it earlier. One thing is that you’re
able to then build cash value and accumulate that
cash value more quickly so you’re able to use it. Another thing is that
you get lower premiums when you start the policy sooner. You’re also gonna be less unhealthy and more likely to be healthy, so you’re rating and your
premium are gonna be lower. Now this leads right
into the tenth mistake that I see way too many people make. And that’s because they delay, they end up getting into
a position where now they do not have the ability
to get life insurance. They waited too long and now they’re past that point of decision. And now they have no ability
to get the life insurance on their life, but there
is a redeeming factor. If you’re looking to
use privatized banking and high cash value life insurance, you can put a policy
on a spouse or a child or a grandchild or even a parent, because you have an insurable
interest in that person. So don’t let that potential
un-insurability prevent you from putting life insurance in place that you know you can use, and that is gonna tremendously
benefit your life. Hey, I hope you liked this video. If you did, click the link
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1 comment

Quite a few great points made in this! What do you think about about using a few different companies vs just one or two? Your content is very helpful and I sincerely appreciate your time and efforts.

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