6 Vital Life Insurance Facts You Can't Miss | With Rob Gill

Well, I mean, for me, it's simple. It's not, it's not the policy. It's the mindset, the policy or the contract, which is actually a better way to look at it, allows you to maximize money, meaning as you run it through the insurance, um, you can then leverage off of it and step into other investment opportunities that you see fit that works within your structure and how you look at money and how you invest your money. Yeah. The inherent contract guarantees date by state are incredible. Um, as Chris says, it's single digit ROI, uh, meaning, you know, it's, it's a place to use as a storage facility and then leverage off now when you, you don't want to use it as a storage facility and go on a European vacation. However, you do want to use it as a storage facility, leverage it. And if you're going to go buy real estate, you want to make sure your renters pay back your policy. Um, or if you go buy a business, your businesses is producing revenues to pay back that policy off that money. Cause then you can rinse and repeat, do it over and over again. And then both assets are growing and it's being paid back by the other asset off the same dollar bill. Um, well, so I have a client of mine that passed away two years ago this August and he, the real estate guy also owned the transportation company. And, um, he had the bank pay for his insurance, which was about a $10 million policy. And the bank paid these huge, huge premiums, which was about five, 600,000 a year, he just paid the interest on it. He was leveraging the money to go buy real estate, then COVID hit. And not because of COVID, but other things happened in his life. And he, you know, he passed away. So in life, he was able to leverage his policy and have the bank call him off to go buy real estate and give him money to go buy real estate. Um, while they paid for his insurance. And at the same time, when he passed away, um, him and his wife really did a great job at raising their kids. Uh, their daughter has taken over the business in an unbelievable way. And, you know, inside the trust, the family received a tax free check that was pretty substantial. Um, I think when you say worst, um, I think that where, you know, people thought that, um, it was going to happen overnight and I know for when I explained it and my team explained it, that's never, uh, the issue. However, my accountant referred to me, somebody that was in the middle of a premium finance. And when you do premium finance, the bank pays the premium. And then you need to have collateral for the difference between the loan and the cash value. Collateral means something outside of that. And this particular person's collateral was a stock trading account, which prior to 2022, the stock, the market was still going up. However, because the market had gone down by the time I met him 15, 20, even 25%, the bank was because his collateral basically went from a half a million or from a million down to a half a million, meaning his account value, so he had to come up with more money to keep the policy in good standard. So when it comes to premium finance, you never want to have as collateral, something that's risky. You want to either have cash in account, uh, cash value, like you may have, so my other client had all these other policies that had cash value. That was the collateral we use for his premium finance. So it's really important to understand what the collateral is. And I couldn't believe the insurance company and the bank that did this policy allowed for a stock portfolio that was heavily traded and leveraged to be collateral, but they did. And now the guy's in trouble. Well, I think that, I think people that love their family, um, and want to make sure their family's taken care of, you know, they're going to go buy insurance, whether it's term insurance or whole life insurance. And I think the insurance agent, if it's whole life may not explain each policy. Um, and I think because of that, or may explain it improperly because of that, somebody else looks at that same plan three years later and they say, oh, did you see the commission? This person may, or no, why did they sell you this insurance? Matter of fact, I'm going to tell you a story. I had to sit down with Chris's, um, fractional office, uh, team. And their question is why did he buy this much insurance? And my answer was, well, do you understand what Chris's investment And, and that's an example. This is Chris Cronin. That's an example that every single person out there doesn't have an investment philosophy. And when somebody on the outside comes in without understanding the game plan, these are good questions to ask. Chris's team asked very good questions. However, they didn't have certain information. And I think that a lot of folks out there, you know, you may get somebody that says, oh, you shouldn't do this life insurance. Uh, you know, you, you could have put your money over here. Yeah, that's on one specific incident. But if you play something out five, 10, 20 years later and truly have a mindset and truly have an understanding of how it works, then, um, I'd argue you can't go wrong with the space. As a matter of fact, fiduciaries, you never hear them and their job is to bring to you your best interest. What's in your best interest. Um, I think long-term care is in your best interest. I think life insurance is in your best interest. And I think a certain type of annuity program is in your best interest. Nine times out of 10, they don't talk about it. Well, listen, I think we live in a society where marketing is prevalent. And I think that we're subjected to opinions by a bunch of different people based on really no evidence or provability. So your accountant may say one thing, um, your financial advisor may say to do something else. The guy that knows your lawn may say to do something else for your sister-in-law may say to do something else because she's got a guy or a gal that can help. I think that if you get educated about money and money mindset, it's not going to show up at your front door. You're going to go get it. The first thing that's important to me is whenever I sit down with somebody, whether we're working with their other professionals or not, I think the other professionals need to get on the same page for the benefit of the client. Now, if you knew we're starting out, you want to make sure that you're with somebody that has a team, um, that could take you through this process. So a lot of times people say, Hey, you shouldn't buy insurance. It's the cost of insurance is too much. Or they make a lot of commission. Um, you know, at the end of the day, if you ran a 20, 25 year portfolio and you looked at that 1% a year for 25 years, there's a lot more fees than that than there is insurance. I think what we do when it comes to the insurance, by overfunding it, we reduce commission significantly. And because of that, it's about understanding how to then take the money and put it into other business opportunities. It's not something you do for one year and stopping, it's just don't even waste your time. Um, but if you genuinely want to be able to understand and be able to create wealth in the retirement income that you desire at the age you desire, this plan overall being the middle or the splash is really where the power is on how you put your money into other assets. I know that in 2022, um, it began actually last year, you heard the word, uh, transitory inflation, which they tried to act like it was going to be something that was going to be temporary. We knew it wasn't turned into inflation where we hadn't seen inflation like this in 40 years, which led the way to a recession. What does insurance have to do with that? Well, if it's your bedrock and you know how to use your money and deploy it in different ways, whether it's to buy a plane, to get a full write off, once again, I dot T cross, make sure your accountant is doing everything the right way. So in case there was an audit, you are protected. But the fact that, that not just for like planes I'm talking about, but the fact that, you know, people use insurance to buy real estate, to leverage their business, to finance their own debt, all these different things is where it becomes very powerful. You could be a business owner. I just had a client the other day. Um, my accountant called them up and they needed a write off. Now I'm going to tell you, show you something right now. They needed a write off. They owe the government, let's say North of $250,000. And it's for 2021. They need it now by September 15th. So it was like, I knew what you do. It was like, yeah, but you can't just do it for one year. It's a defined benefit pension plan strategy. You have to qualify. Everything has to be, I dotted T cross. But if you do it, you'll be able to write off that money and keep it in buckets for yourself that give you a pension plan later on in life. Phenomenal conversation, but I was upfront with it. Sometimes you'll get an agent that just wants to make the sale and they won't tell the whole story. I had to make it clear to the client that you can't just do this one year and stop. This has to be part of your financial makeup over the next seven, eight, and 10 years. So that's a good example of what's out there. And yeah, we fund it with, uh, with life insurance as well as fixed annuities, because we want to make sure the guarantee is there. We want to make sure that they get it. The fund monthly payment plan.