What is Whole Life Insurance? How does Whole Life Insurance work?

GWSP President, Jim Evans, provides a description of Whole Life Insurance, how it works, the policies performance, net amount at risk, premium, types of policies, what you need to know before you purchase.

[dq]

The most logical explanation of how WL works.

[rosstemple]

That was probably the best I’ve heard so far. Still makes my head hurt. Bunch of jargon I’m not used to hearing.

[jean-simondoiron]

Awesome explanation! You understand the product very well.

[briankilfoyle]

At 6:40 reguarding the 5% dividend on the full 10, 000. That’s only assuming that the company is a non direct recognition company. Just to keep that in mind. A Lot of companies are direct recognition, therefore, subtracting any outstanding loans and ultimately end up paying a reduced dividend. Doesn’t make a huge difference... but just something to keep in mind. Awesome video.

[GannonWealthSecurityPartners]

If you've found this video to be helpful or if you've called our office and had a free call with Jim and found value in it - we would greatly appreciate it if you could leave a review on google about your experience watching our videos or speaking with Jim. Please help us get the word out that we're honestly here to help! You can find us by searching Gannon Wealth Security Partners in your google search! Thanks again for watching our videos!

[jms]

I highly recommend that anyone interested in whole life Read Becoming your own Banker by Nelson Nash. It is a very thorough explanation. It is easily read in an evening. The strategies with whole life are limitless, especially if you learn to use your policy as your own bank. Let me know if I can help explain further.

[rontan]

Back in 1999 an insurance agent offered me whole life for $70 a month. Well the day I decided to sign up for it with the agent at my house, I listened to dave Ramsey and decided to get the term life from another agent. It was for $10 a month. I ALSO decided to store the $60 a month since I could afford $70 a month to a savings account with no care to what the interest rate is. Well today I got almost 15k in the account from nothing but $60 a month. And I still have the life insurance. Selling whole life insurance is worse than selling snake oil

Thanks Jim - very informative, well done

[marksgameoflife]

How do you think the corna virus and the lockdowns are going to effect the insurance industry in the future?
Is it going to be better, worse or the same? What are your thoughts/predictions on this?
And which type of insurance should i study...right now im studying life and health, should i add anything?

[travisny]

how long does it for the cash value to grow 10k?

[rosstemple]

Wishing someone would explain using this as a bank in and outs. Policy pitfalls to avoid. I’m wanting to go into profitable farming and will need many up front investments. At a certain time can you cash out then switch to a term life for more security. How much will I be putting in on let’s say a million dollar policy. How soon could I draw if I paid 2k a month

[mjtuf]

Question..The whole life Insurance illustration printed out to me earns a cash value, but it takes about 18-20 years to be high enough to equal the amount I'm putting into it over that time.. so for 20 years to have a policy that's equal to what I put in that doesn't seem like a good investment option because that's lost opportunity and that money over 20 years of inflation wont be worth the same.. If my job offers a group life insurance rate wouldn't it be wise for me to take out a term policy to cover me for the later years in life since at the group rate i'm paying the same premium which then will probably be a better rate than I'd get at an older age?

[wowthatsdeepman]

5:50 to 6:30 sounds like you just said - They will give me (a policy holder) a loan from the insurance companies general funds and use my actual cash value as collateral (meaning I'm not borrowing fro myself). Therefore I DO NOT REDUCE my cash value AND I receive a dividend on that Actual Cash Value amount (regardless of the outstanding loan amount)...

Using your numbers - if I had $10, 000 Actual Cash Value and the dividend were 3% - I'd see a $300 dividend for that year ... and in the same year - if I took a $2, 000 loan at a 5% interest rate (paid over 12 months) - I'd theoretically have access to control $2, 000 and only pay back $55 in interest - essentially ending in a NET $245 position all the while maintaining my benefits under the insurance policy.

I would NOT have to pay IRS taxes on the dividend NOR would I have to pay taxes or penalty on the loan disbursement!

Is this real?

[jimk]

Whole Life insurance should have a level death benefit, it does not increase over time. This is one of the key aspects of whole life. I assume since Jim Evans says that the death benefit increases over time with whole life, he is referring to that held with mutual / participating companies. And, that would only happen if dividends are used to increase the death benefit via paid-up additions.

[bigbk]

If you liquidate the cash value and the policy collapses. What are the tax consequences? If the loans are treated as distributions?
What is are the overall mechanics of this happening if nothing is paid back towards premiums or the loans?

[goldtouchhc]

which life insurance are you with that does 10-20 years payments?

[Richb]

so for infinite banking you don't take out a loan from your principal and pay it pack into the account?

[ashleytaylor]

@7:00 minutes you talk about arbitrage and you give the example of a 5% dividend on your 10, 000 and a 3% loan interest on the 2, 000 dollars. That gives you a 2% arbitrage. My question is, how common is it to have the dividend interest greater than the loan interest? I have read that a lot of insurance companies charge 8% loan interest. So if you are making 5% on the dividend but losing 8% on the loan interest then you are in a negative arbitrage. Can someone chime in and help me out?

[ashleytaylor]

@10:00 minutes you say: The death benefit rises with inflation, the death benefit is going to rise as you pay your premium over time, that should keep up with or better inflation. If you buy a life insurance today for 500, 000 is a lot more than what 500, 000 dollars would be in 20, 30, 40 years. "

If the death benefit is a guaranteed 500, 000, then when you die the insurance company will pay your beneficiary the 500, 000 death benefit right? Does the insurance company increase the death benefit to compensate for inflation? Let's say you take out a life insurance policy for 500, 000 dollars that ends up paying out in 30 years at 3% annual inflation. 500, 000(1.03)^30 = $1, 213, 631.00 . So in 30 years 500, 000 dollars now will be the equivalent of 1.2 million dollars. Will the insurance company payout 1.2 million dollars? Or will the just pay you the $500, 000 dollar death benefit which is worth significantly less money. I think it comes out to 206, 000 if you use 500, 000/1.03^30

[travisny]

9:20 so with an IRA we are paying 33% in taxes?