Borrowing From Your Policy: When It DOES & DOESN'T Make Sense | IBC Global

[@octaviusss]

This presentation is GOLD! I will refer to this in the years to come.

[@IBCGlobalInc]

Thank you!

[@thainesmith1]

What matters in my opinion is the percentage of cash value borrowed that would generate same interest as earned under the guaranteed value column. I think that’s about as conservative as you could be and have it guaranteed, and that scenario makes sense only when you have a mature policy. New agent here. Thank you for the value provided!

[@ferchoordonez7647]

O⁹

[@samuelcoronado2229]

I love the detail in this channel. The simple interest portion was crucial. So it really is compound interest.

[@IBCGlobalInc]

Compound and Simple Interest on Whole Life Insurance policies.

[@JustAVariation]

This guy is the most honest cash value agent I've seen lol 🤣. But I can work with it. His explanations are detailed and not a bunch of bs.

[@IBCGlobalInc]

Lol, Thank you :)

[@marlonsimpson5441]

16:30 - wow! How fast interest rates changed in 12 months and it makes whole life look like an even better option to borrow from.

[@tylerrobinson4422]

The best I have found is prime minus .5% with is an effective loan rate of 5%. unless you have more than 250K loanable value which would then qualify for prime rate minus 1% which right now is 4.5%. Do you know any bank offering a better rate than that? I’m wishing I could reduce my rate more to keep the arbitrage. I’m concerned prime rate will keep going up. @ibcglobal

[@stephensampson1]

You are right: OPTIONS!!! I don't know how many times I go thru this in my head but I can't find that "correct" answer. I think what matters most is WHEN you are ready to take out a loan, you have to take the time to measure your options.

[@JeffFaulkner-l7h]

fantastic video! thanks for the in-depth discussion and the actual illustrations - very helpful!

[@growing367]

0:30 2:00 gross rate 30:30 cash value collateral loan

[@JJ-xv3gs]

This deserves more likes. Learned so much!!

[@IBCGlobalInc]

Thanks J J!

[@RJ-gi2hf]

On a direct recognition policy such as Guardian, when you borrow midway through the policy year, does guardian pay the increased dividend on the borrowed amount as if it was borrowed for the whole year? In an extreme example, you borrow $10,000 the day before the policy anniversary, then pay 1 day of interest on the policy anniversary. Would Guardian (depending on age of policy) pay either 6% or 8% on the borrowed $10,000 as if you had the policy the entire year?

[@IBCGlobalInc]

Good question RJ. - If you were to borrow midway through the policy year, Guardian will begin crediting the accelerated dividend midway through the year (on the date the loan is taken). - Guardian will credit a dividend rate that matches the loan rate on borrowed funds from the date the loan is taken. - Depending on when the policy is opened, the rate will be 8%, 6%, or 5%. Thanks!

[@marisoljesus9862]

I'm so grateful I stumbled upon your videos. So detailed and informative. Thank you🙏

[@IBCGlobalInc]

Thank you! :)

[@B1D1r3ct0r]

When a policy charges interest upfront and you make a payment does it cover the annual interest first or go to principal. For example 10k @5% is $500 in interest. If I make a $600 payment n 1 month is my new balance $9900 or $9500?

[@NGF-Life]

Great video, thanks for the content. Do you have a list of lenders you know that offers cash value loc? Thanks in advance

[@IBCGlobalInc]

Thank you! Regarding lenders, we have a few we like working with that offer attractive rates and solid customer service. Feel free to email us at [e-mail] and we can provide.

[@pramvinnyyt]

Thank you very much for the illustrations and useful content. I have a question about direct recognition policies. If I borrow at 5% and the declared dividend rate is 5.75%, will the dividend on the borrowed amount be calculated at a different rate? Based on your illustration, I understand that the CV of non direct recognition policies catch up to no-loan scenario, but wondering about the direct recognition policies and the impact of borrowing thereof. Thank you!

[@rcruz401]

I have a Guardian policy and wanted to know if I can pay the loan interest ahead of time or before the anniversary date? I currently made a payment on the website and if only allows me to pay into PUA'S or the actual loan amount.

[@maxpruger837]

Respectfully, you're misunderstanding what type of loan this is. Sounds like you're thinking of this loan like a mortgage where it's amortized over 30 years and there's an interest and principal component. This is a simple interest loan. There's no amortization. Interest accrues and is added to the balance on a daily basis. For example, if you take a 10K loan @ 5% that means interest is added at $1.37 per day (10K * 5% / 365 days). If you take a loan today then tomorrow the balance will be $10,001.37 at the end of the month it would be 10,041.67. There's no principal and interest, there's just a balance. In other words, with a simple interest loan there's just a loan amount and you pay off that loan amount which is why Guardian only shows a "pay actual loan option". In a simple interest loan, if you want to pay "interest only", you just pay that amount towards the loan. So if you take a 10K loan and want to pay interest only then you could just pay $41.67 every month to keep the loan balance at 10K. Hope this helps and makes sense.

[@IBCGlobalInc]

Thanks for the message. Max added some great details. Thanks Max! Regarding your Guardian portal, you do not have the option to pay loan interest before the anniversary date. With that said, any loan payments you make prior to your anniversary date will pay down interest, reducing the interest bill you receive on your anniversary.

[@WizeChoice]

Amazing video👉🏾✨✨✨ Thank you much

[@canaldrip2523]

Wouldn’t the performance be higher in the unseen tax differed vehicle? Is that already calculated?

[@IBCGlobalInc]

Hi Lucas, thanks for the comment. Can you provide more info on your question in respect to the tax-deferred vehicle? The cash value policy produced a net IRR of a little over 4% in these examples. It is possible it could produce a stronger return, but we'd prefer to keep the numbers conservative.

[@franklehane8843]

The language we use confuses. We borrow the life company's money. We don't borrow from ourselves, nor do we pull money out of our policies.

[@IBCGlobalInc]

Thanks Frank. The language, and compliance in the industry, is over complicated. We'll keep working on refining and improving 👍

[@zacharygardner4568]

Good info, but this info is only relative to policyowners with IBC policies. Loans are also 8% on average. The best bet is to run a few illustrations and show the client. MEC is important. The folks generating the illustration understand this. We don't want a taxable scenario. Also, the biggest thing that wasn't even talked about was underwriting. They don't care how much money you have. They only give a fuck if your MIB fits what they want.

[@KS-pm4ib]

Great video Thankyou

[@IBCGlobalInc]

Glad you enjoyed it!

[@must4222]

I have one of these policy loans from lafayette. They approved the loan but there isn't a way that I can find in their web portal to transfer the loan funds into my bank account. Do you happen to know how that is done?

[@IBCGlobalInc]

Good question. We would recommend reaching out to your agent to assist with this.

[@bjbolton1]

Is the 5% Interest tax deductible?

[@michaelzelesnik9860]

Do you have or can you do a video how Guardian LTC rider works in their Whole Life policy.

[@IBCGlobalInc]

We can create some content on that. We'll typically use the EABR (Chronic illness rider) as it is free but the pure LTC rider has some added benefits.

[@khalil4115]

You are so ethical and good at this profession. I'm going to cash in some crypto & call you

[@IBCGlobalInc]

Thank you! :)

[@canaldrip2523]

Great video!

[@dosmasdos9542]

Thank you for making these videos ! You explain things better than my office trainer

[@IBCGlobalInc]

Thank you! Glad to hear it was helpful! :)

[@Mike-cc3ki]

Do you have any of your spreadsheets posted publicly? I would be interested in playing around with them a bit

[@IBCGlobalInc]

Hi Mike! Thanks for the comment. They are available to clients and subscribers to ILS Agent Academy.

[@countysheepdog55]

EXCELLENT... I just subbed 👍

[@IBCGlobalInc]

Thanks for the sub!

[@marketeandotehoy]

Quick question, why you never talk about IUL? only Whole Life...

[@maxpruger837]

Steve has plenty of videos around IULs but they don't sell IUL policies and IULs are not recommended for Infinite Banking. - kzbin.infosearch?query=iul

[@IBCGlobalInc]

Thanks for the comment David. Max covered it well. We have some videos on IUL's but our strength and focus is Whole Life.

[@reoman8179]

Is an IUL not recommended for infinite banking? I’ve heard that you don’t have immediate access to any cash that you have in a IUL?

[@aaronvalerio19]

Can somebody tell me what kind of presentation board he is using here, please. I want to buy one for studying.

[@IBCGlobalInc]

Hi Aaron, Steve is using a OneScreen touchscreen interactive display in this video.

[@dailstancill720]

It is true that earning on a inclining balance is greater than paying on a declining balance? This is presented as major benefit of IBC. Agree?

[@IBCGlobalInc]

I would just ask the agent you are working with to show numbers. Net cash value growth vs. net dollar cost to borrow.

[@YourWealthSaverAdvisor]

Hi Steve, can you please let me know the good standing Mutual insurance company in Canada that you can use this strategy aside from Equitable Life, thank you so much, i appreciate your hardwork and i learned so much

[@IBCGlobalInc]

Thank you Sarah! We are not that familiar with Canadian companies. There is a group in Canada that designs policies for maximum cash valu. I've included a link below. - ibcglobalinc.com/canada/

[@YourWealthSaverAdvisor]

@@IBCGlobalInc thank you

[@Jord85]

Such a garbage product. Always always always read your policy. It will always never work out in favour of the client

[@IBCGlobalInc]

kzbin.info/www/bejne/aYiWiYCOg69gp6M - Don't make these mistakes with Whole Life Insurance

[@AaronSmith-rk4mn]

Ok this video hits on what I’m talking about. But I’m this case you’re taking 150k but have an annual dump of 40k. Could you do a video where you take 90%Ltv of the cv from year one, you pay interest only annually, and pay max MEC every year for say 30 years. I want to see how the compound interest grows in respect to the simple interest from day one. Cause if you can leverage the the loan money you pull out of the cv into another policy, and waterfall this strategy, theoretically you should come out way ahead. What I’ve come to notice is youre literally compounding the interest by about 3x your cash dump on your first policy with a trickle down effect.

[@IBCGlobalInc]

Thanks for the comment and case study specs. We can create something like that in the future. That strategy can work but the net interest expense can also exceed the interest earned on the policy. We'll highlight the pros/cons when we put this together.

[@AaronSmith-rk4mn]

@@IBCGlobalInc awesome! Would changing the percentage of the LTV make any difference? That’d be cool to include as well in a case analysis! Thanks!

[@tedtasticrevelations1394]

over over complicated. I believe diliberately. WHY? WHY? WHY? ... are we beffing the LI companies to invest our money and let me borrow against it. The part that stays there in the policy? You don't ever get!!! You can only borrow against and loose it if you die!!

[@fechnerjean-philippe3238]

Why does it make ANY sense for anyone to borrow THEIR OWN MONEY??? Would you give me your money to hold for you and when you need it I loan it back out to you?

[@IBCGlobalInc]

The video provides an alternative to loaning from a policy. Cash Value collatearl loan.

[@mikieemiike3979]

If you set it up right and practice self discipline it can become a source of passive income.

[@Sideler74]

@@mikieemiike3979 no it can't, ever. The CV is never yours. You touch it & you WILL to pay it back via % added to your monthly premiums. There is no getting around that.

[@mikieemiike3979]

@@Sideler74 Lol man did I find out soon enough. Canceled my new policy and cashed out. I was wrong.

[@jalfredprufrock620]

@@Sideler74 Are you referring to the case covered in 28:10 or something else?

[@jonathanschwartz4615]

Please answer this : if I can earn a yield greater than the rate at which I'm borrowing , why wouldn't that make sense? Why are these videos so lengthy and complicated? Example: 1. Assign policy to a bank. 2. Get an LoC at 3.5% against the CV. 3. Make investments that yield returns greater than 3.5%. What's so complicated?

[@IBCGlobalInc]

Thanks for the comment. See below. - if I can earn a yield greater than the rate at which I'm borrowing , why wouldn't that make sense? ***Answer: It does make sense. This video is meant to highlight when it does and does not make sense. Many people have expressed frustration after being told that they are earning a 6% dividend, and borrowing at 5%, creating a 1% spread in the policy. The item that is not clarified is that the 6% dividend is not what the cash value is growing by. The video is meant to highlight the IRR on the policy vs. the loan rate and when the policyholder is positive/negative. -Why are these videos so lengthy and complicated? *** Answer: We'll work on simplifying them. Appreciate the feedback! Example: 1. Assign policy to a bank. 2. Get an LoC at 3.5% against the CV. 3. Make investments that yield returns greater than 3.5%. What's so complicated? *** Answer: The example is a great one if comparing the outside investment with the cost to borrow. The purpose of the video was meant to compare the IRR on cash value vs. the cost to borrow. A LOC (Cash Value collateral loan) example was demonstrated toward the end of the video. Thanks again for the comment. Hope this helps! :)

[@fechnerjean-philippe3238]

The loan isn’t from the Insurance Company. It is from THE CLIENT’S CASH VALUE SAVINGS!! The insurance company isn’t lending the client from the insurance company’s cash account.

[@IBCGlobalInc]

kzbin.info/www/bejne/l2WUdqWBlMZ6frM - How Policy Loans Work

[@alw6589]

Is your last name Zerafa?

[@IBCGlobalInc]

Thanks for the comment. My last name is Parisi

[@brandonbrooks6780]

Well this aged well…

[@fechnerjean-philippe3238]

I BOUGHT $1 MILLION 35 YEAR TERM FOR $175/MONTH AND NOW INVESTING THE DIFFERENCE!!

[@IBCGlobalInc]

Nice! Great work investing!

[@JustAVariation]

​@@IBCGlobalInc I love how calm you are lol 🤣