When it comes to establishing goals, it is often a good idea to work backward. What is the end result you want? Stephen Covey had it right when he said, “begin with the end in mind.” When you have a goal, it’s then a matter of establishing the steps needed to get there. It is no different with planning for retirement or establishing greater time-freedom. You want money that is safe, growing, and there when you need it.
For all of those reasons and more, Uncommon Wealth Partners likes the versatility and immediate usability of a cash-value whole life insurance policy. There are a number of reasons for this.
First, after nearly a decade of doing this, I haven’t met one person with children or a business or both who wants to leave nothing behind. Everyone wants to pass along a legacy, so a whole life death benefit is one more reason to appreciate what is possible in using this financial tool.
Further, as you age it’s natural to want a larger pool of liquid cash. What’s the best way to do that? Savings accounts and CDs are safe, but the interest rates don’t get you very far. Other investments, like stocks, are much more speculative, with the potential for higher gains, but with a lot more risk.
How can you create a banking system where you have access to an ever-increasing pool of cash, an ever-increasing return on that pool in the form of dividends or interest, plus tax protection? And could you make it so you can draw from that pool if an opportunity comes along for a sound investment, or just to purchase a new car or fix your roof?
That’s right, we keep going back to cash-value life insurance. It’s like fine wine, it just gets better with age, especially when it is designed to give you a benefit while you are alive, not just a death benefit.
Recently, we were doing a review with a client who has implemented our Uncommon Banking strategy with a cash-value whole life insurance policy. He told us:
“Having this policy is something I never would have done on my own. Actually, my previous advisor told me not to do it and compared it to a marriage. He must not have been a fan. But my marriage has been the best thing in my life other than God. My marriage has really been a blessing from God.”
I think I need a marriage with my money too, to hold me accountable. With Uncommon Banking, I have this pot of money that helps me think more like an entrepreneur because the money is liquid and available. When I think about accessing some of the cash value via a loan, it makes me really think through and honestly evaluate what we will be using it for. I want to be wise with it. Now that I see the economy slowing at work, it makes me think about how I could use this to generate another income stream to protect my family if my income were to drop or go away temporarily as I look for a new job.”
He then thanked us for selling this the right way, by being super honest and customizing the policy to his situation – not making it a burden, but not making it too small where he would never appreciate it. We took time with him, over a year before he decided to go ahead. Now after three years with a policy, he can’t believe how much they have saved.
He also said it’s so easy. There are no tax forms to turn in, and it’s flexible. As things change in life, they have been able to change the policy to accommodate their life.
This is not like a Roth IRA, where you need to wait until 59.5 to access the growth. And when you take out a loan, that does not trigger any taxes either. Plus, you can take tax-free retirement income from the policy to supplement income or act like a personal pension.
Uncommon Banking and cash-value life insurance are like a marriage – it’s hard work, it’s long-term, and can be rewarding if you stick with it and work at it. This is the longest range type of planning you can do. If you stick with it, you might be surprised at the change in mindset and discipline that may come as an added benefit.
Whatever your life goals, it is our honor to help people fuel their Uncommon Path.