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The Concept
Explained

Gain financial security and peace of mind for your loved ones and your future

Discover Essential Financial Concepts for Your Financial Strategy and Health

The IBC or Income For Life (IFL) concept is not about buying a product; it's about embracing a process that offers lasting financial security and 'Living Benefits' beyond insurance. Let's explore the concept below.

THE PROCESS Summarized

Unlocking Financial Potential:
IFL/IBC - A unique process offering lifetime benefits, financial balance, efficiency, and tax advantages. Start your journey to financial success today!

For those short on time or seeking a quick overview, this summary highlights the key benefits of the IFL/IBC concept. If you'd like to learn more, feel free to start a conversation with me here.

  • Living Benefits: Permanent life insurance offers more than protection; it provides valuable guarantees, predictability, protection, safe harbor, liquidity, and use and control of your capital unlike qualified plans.

  • Warehouse Your Wealth: Store your wealth and capital where it can grow continuously through guaranteed compounded returns, maximizing your wealth-building potential, and have complete access.

  • Remove Market Risk: Whole life insurance's cash value is a non-correlated asset, unaffected by market conditions.

  • Financial Balance: Achieve balance in your financial portfolio by exploring alternative strategies to build wealth and minimize losses.

  • Efficiency and Wealth Growth: Employ a strategy that enhances your financial position, avoiding wealth transfers and benefiting from accessibility, control, and compounding.

  • Cash Value Growth and Access: Premium payments consistently grow cash value over time, offering immediate liquidity and access.

  • Loan Benefits: Utilize policy loans with low interest rates while your cash value continues to grow, providing tax-free access to funds.

  • Retirement Income Strategy: Strategically access cash value during retirement without triggering taxes.

  • Death Benefit Protection: Ensure financial security for your beneficiaries with a guaranteed death benefit, even if you take out policy loans for investments.

  • Tax Advantages: Enjoy significant tax advantages, including tax-deferred growth and tax-free access to gains through policy loans.

These takeaways summarize the key advantages of the IFL/IBC concept and whole life insurance, emphasizing wealth growth, access to funds, tax benefits, and financial protection.

Continue on if you would like to learn more or contact me to start a conversation.

THE PROCESS

Embrace the IFL or IBC concept as a transformative process, unlocking 'The Living Benefits' of specially designed whole life contracts that offer more than protection—providing a unique path to financial efficiency, wealth accumulation, and uninterrupted compounding, challenging traditional financial norms.

The IFL or IBC concept is a process, not a product, and there is nothing to buy. The products used in this process offer more than just permanent life insurance and protection; they provide a range of additional benefits that can be utilized throughout one's lifetime. These advantages, which I refer to as "The Living Benefits" of permanent life insurance, make the concept unique and valuable.

 

While the following information may contradict traditional financial advice, I encourage you to read it, multiple times, if necessary, to fully understand its implications.

 

What stands out to me is that many individuals lack financial balance in their lives. The majority of people I encounter have most of their assets exposed to market risks (401k’s) and tax implications through W2 income. To build long-term wealth and minimize losses, it is crucial to recapture lost opportunity on our money.

 

The concept of using specially designed whole life contracts to achieve financial efficiency is not just about the product itself, but also about the process. We must ask ourselves if there are alternative ways to accomplish our financial goals and produce better outcomes. The answer is yes. By employing a strategy that aims to enhance our financial position, we can avoid unnecessary wealth transfers, accumulate a growing pool of capital, and benefit from accessibility, control, and uninterrupted compounding.

 

Essentially, everything we purchase is financed in one way or another. We either pay interest or forfeit the opportunity to earn interest. It is essential to consider not only the cost of an item but also the opportunity cost associated with how we pay for it. In essence, there are three types of individuals: debtors, savers, and wealth creators. Although debtors and savers engage in transactions that seem opposite, they ultimately involve the same fundamental principles when examined closely.

THE MECHANICS

Unlock the power of a thoughtfully designed insurance product offering guaranteed growth, liquidity, and protection—leveraging its unique structure to access funds while your cash value continues to compound and earn interest, minimizing the true cost of the loan.

The insurance product used and its design plays a crucial role in its effectiveness. Unlike qualified plans, an insurance contract offers valuable guarantees, providing you with continuously growing cash values, a good level of predictability, access, control, protection, and liquidity.

 

There is no one size fits all. The IBC concept is completely scalable, it can accommodate individuals just starting their wealth building journey to high net worth individuals looking to add optionality to their financial plan or estate planning.

By paying annual, semi-annual, quarterly, or monthly premiums into a specially tailored insurance product, a portion of your payment is allocated to immediate cash value through the "Paid Up Addition Rider." This cash value earns a return, typically around 3.5%-4% minus a mortality cost specific to your peer group, along with a non-guaranteed dividend. After the policy has had some time to mature – approximately 6-8 years – and absorb the early costs of startup, the approximate yield on your cash value is close to 4.0% on a tax-deferred basis. The cash account remains liquid at all times and can be used as collateral, similar to a bank savings account, except for the 4.0% component.

 

When you need to make a capital purchase, or an investment of any kind, you have the option to take a loan from the insurance company using your cash value balance as collateral. Importantly, you never actually touch your cash value, which allows it to continue compounding. The insurance company charges you either a variable or a guaranteed contractual fixed interest rate for the loan. However, while the loan is outstanding, your cash value remains untouched and continues to earn compounded returns, currently at around 4.0%. The insurance companies I work with have a "crediting rate" mechanism, whereby they increase the dividend on borrowed funds, resulting in a net loan cost of approximately 1% underneath the surface.

 

An easy analogy to understand is to think of a cash-back credit card purchase - you buy a property for 100K, the credit card company charges you 5% interest on the purchase and gives you 4% cash back. In the insurance loan you are charged 5%, and your cash value collateralized for the loan grows by 4% - leaving you a net cost of 1% for the loan.

 

This unique structure provides you with the opportunity to access funds when needed, while your cash value continues to grow and earn interest, effectively minimizing the overall cost of the loan. You also enjoy total use and control and liquidity, all under contract law protections and safe harbor.

CASH VALUE AS A RETIREMENT STRATEGY

Empower your financial future by strategically leveraging your cash value as collateral, accessing tax-free funds for retirement without interrupting its compounding growth—unlocking potential far beyond traditional draw-down approaches on retirement accounts.

Cash value can be accumulated during your working years and strategically utilized during retirement. One advantageous feature is the ability to take loans against your cash value, using it as collateral, with no obligation to repay the loans. This approach offers tax-free access to the cash since loans are not considered taxable events. Importantly, as you are not actually withdrawing your cash value, your entire cash value continues to earn compounded returns.

 

By implementing this strategy, you can potentially make your money last longer, and accumulate a significantly larger sum of money compared to a traditional draw-down approach on a 401K or IRA account. It provides a means to access funds without triggering taxes while allowing your cash value to continue growing with a compounded rate of return.

 

It is important to note that when you have an outstanding loan, the payable death benefit of the policy is reduced by the loan amount plus accrued interest. This demonstrates how you can leverage the benefits of the insurance contract while you are alive, maximizing the value it offers throughout your lifetime.

Permanent ADVANTAGES

Harness the enduring growth of whole life insurance cash value—boosted by compounding dividends—and embrace its unmatched potential to work doubly hard for your wealth. And add the shield of a guaranteed death benefit, this is a financial advantage worth seizing.

The cash value of whole life insurance consistently grows over time, assuming you are consistently paying your premiums as modeled. Once a dividend is paid, it becomes a permanent addition to your cash value and cannot be taken back. Each year, your cash value increases regardless of current market conditions and returns. This is a valuable benefit that should not be overlooked.

 

Accessing your cash value within a policy for wealth creation allows your money to work twice, effectively maximizing its potential. This unique characteristic is not found in any other financial instrument that I am aware of. Furthermore, whole life insurance offers significant tax advantages and far more consistent returns when compared to trading accounts. The gains accumulated within a whole life policy grow on a tax-deferred basis. When accessed through policy loans in the future, these gains can be utilized tax-free, providing a considerable tax advantage.

Let's also consider the aspect of protection. Rest easy knowing that your financial responsibilities are safeguarded through a guaranteed death benefit. Even if you take out policy loans to invest in real estate, syndications, the stock market, or business ventures, your investments will remain covered by a death benefit for your beneficiaries.

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