WL cash value real estate?

[Zach]

Hey guys! I'd like to aquire some companies to where a client wants to buy a house but puts his or her money into a WL policy to draw from while it continues to grow interest. What are the best companies for immediate cash value for this type of investment? Thanks guys!

 

[Tahoe Ray]

Hey guys! I'd like to aquire some companies to where a client wants to buy a house but puts his or her money into a WL policy to draw from while it continues to grow interest. What are the best companies for immediate cash value for this type of investment? Thanks guys!

None, because that strategy doesn't exist in any reasonable way.

 

[Zach]

None, because that strategy doesn't exist in any reasonable way.

I believe that it does but do you have a specific view why you think it doesn't?

 

[DHK]

I already posted this in your other thread:

The higher the immediate cash values... the lower the long-term dividend performance.

Why? Because Paid Up Addition riders are not entitled to the same dividend scale as the base policy.

That being said... pick one: MassMutual, Penn Mutual, One America, Lafayette Life... they can all be structured in such a way.

 

[DHK]

This segment would also be excellent to review:

 

[Zach]

I already posted this in your other thread:

The higher the immediate cash values... the lower the long-term dividend performance.

Why? Because Paid Up Addition riders are not entitled to the same dividend scale as the base policy.

That being said... pick one: MassMutual, Penn Mutual, One America, Lafayette Life... they can all be structured in such a way.

Thank you for your help. Do you think they would be more beneficial if they could have some patience and use a IUL for a much larger return? Then they can use the collateral loan from the bank and use it a a "business loan" and write off the interest? Or they could go the route of infinite banking as well whatever they chose best.

 

[DHK]

The magic of whole life is not the rate of return. Yes, there is an IRR on the cash values, but that's not the magic.

It's having a source of capital that you don't need permission to borrow against, no IRS taxation or penalties (as long as it stays in-force), and unstructured repayment schedules.

So, if your focus is on returns, that's not the best angle. The focus ought to be having a source of capital to fund their real estate purchases and not have to rely on bank funding.

 

[billyb]

Some of the local agents here started using the LEAP system years ago. I don't think it worked too well for them. This sounds similar.

 

[Tahoe Ray]

I believe that it does but do you have a specific view why you think it doesn't?

Taking money out of a policy immediately (to buy a house, for example) will cause the policy to underperform and possibly create a liability.

The numbers only work in fantasyland (illustrations).

 

[Allen Trent]

Taking money out of a policy immediately (to buy a house, for example) will cause the policy to underperform and possibly create a liability.

The numbers only work in fantasyland (illustrations).

Especially when the client finds out they can't actually take any of their own money out if the base policy but instead are taking out a loan to get some of the insurance companies money & the collateral assignment to the policy is compounding with an loan interest rate likely higher than current loans from banks, etc