Introduction Of 38-Year-Old Dentist owns 23 Offices! $100k In A Year With Insurance Policy How It’s Possible
38-Year-Old Dentist owns 23 Offices! $100k In A Year With Insurance Policy How It’s Possible. Why he reached out was specifically for a whole life insurance policy but he mentioned in his first email I’m interested in the cash value benefit which most people that reach out to us that’s exactly what they’re interested in how do I maximize.
Whole life insurance policy
The cash value in a whole life insurance policy however he had a follow-up question he said based on my age and income right now how much life insurance do I qualify for he had some life insurance in place already term life he had been pitched on or sold on whole life insurance in the past decided not to move forward with it but he has this question.
How much life insurance can I get so as a quick example here if he’s age 38 so if you are age 40 or younger it’s age 18 through age 40 you can typically qualify for 30 x your income now you can add more life insurance to this if I own a business I can ensure that if I’ve got certain liabilities I need to cover if it’s a key man policy it’s an additional 10x but most companies will permit 30x my income between ages 38 and 40.
Some will go up to 35 and I can first I can see that in the future happening with more and more companies once one does it others usually follow but the norm for a long time has been 30x income in total life insurance so this individual if his income is let’s say a million dollars per year at 30 times that income what is the total amount of life insurance call it death benefit.
A lot of life insurance 30 million dollars
That he would qualify for a million dollars in income times 30 is a lot of life insurance 30 million dollars which are paid out income tax-free if he had no other assets this would automatically put him over the estate tax limit so we do have to be cautious of that when passing on assets because that would be subject to estate taxes unless it goes to a spouse.
There’s no concern there but kids next generation there are state taxes in that respect but 30 million that’s the total amount of life insurance he would qualify for and that’s with all companies and all policies combined a question we get sometimes is hey if I qualify for 30 million and if your income’s 100 000 then it’s 3 million if your income is 10 000 then. You Can Also Read 1 Million Lump Sum: Is it Efficient Or We Hire Insurance Lawyer.
It’s 30 000. the 30x is consistent but a question we get is hey if I qualify for 30 million could I take that out with company a and then take out another 30 million with company b my answer is that would be nice but unfortunately no the limits are based on all life insurance policies we have combined whole life term all of that good stuff so there is the answer to his follow-up question.
Whole life insurance policy specifically designed for cash value
How much death benefit can I get so let’s progress on here the funding that he is interested in during our first zoom call he was interested in finding a policy at up to 100 000 per year for a maximum of 10 years so throughout the conversation I asked a couple of times how long do you want to be able to pay into it and 10 years came up he’s like I really like the idea of funding it for 10 years and then being done and a follow-up question.
I always like to ask whenever I hear that is there any chance that you want to fund longer so let’s say you fund it at 100k per year for 10 years once you hit that do you think year 11 do you want the option to continue to pay into it or do you want to stop altogether and the response was probably not we get this response from a lot of people, however, are there any advantages.
If I do keep paying into it what’s the difference if I stop after 10 years or if I want to keep paying into the policy the answer is when you look at a whole life insurance policy specifically designed for cash value what’s the worst part about it the first year right the minimum premium does not show up in cash value I have less money than what I pay into the product.
Whole life insurance policy every year after the first year
If I pay in call it a hundred thousand dollars, for example, your first year cash value is going to fall anywhere between 80 and approximately 90 000 in the first year so I take a hit what’s the best year about a whole life insurance policy every year after the first year because I get more and more of my money back it begins compounding all of the good stuff we talk about all the time.
So at year 10 or I should say at year 11 if you feel hey I like this policy it’s compounding nicely now I do want the option to keep feeding the beast that would be an advantage of having a policy where it can continue to pay into it beyond the 10th year now on the flip side there is a drawback to that or another item I should be aware of is funding a policy for 10 years or less will often enhance.
The internal rate of return just if I said hey here’s the dollar amount I want to get in say it’s a million bucks whatever the dollar amount is I get it into a policy and then I’m done like this is what I’m interested in with this product if I do that if I fund it for five years 10 years and then stop you will see the internal rate of return often optimized both on cash value sometimes on death benefit long-term debt death.
The non-guaranteed values the current dividend rates
Benefit yes short-term death benefit no cash value always so pros and cons there are advantages and disadvantages another follow-up question he asked was can i just give you a lump sum of a million dollars can i just pay it one time like if i’ve got a million bucks can i pay it off altogether the answer was.
But it makes sense to spread that lump sum out over three to four years three years would actually look pretty good at his age it looked better than four years when looking at the non-guaranteed values the current dividend rates but if we look at things more conservative kick dividends down look at the guarantees spreading it out over four years makes more sense so he had this question we want to show both options 100k per year for 10 years total of 1 million 250 000 per year for 4 years total of 1 million from a pure cash value efficiency standpoint.