Whole life insurance

[Magdaleno Garcia]

I’ve been hearing a lot about whole life insurance and how you can use it as your own personal bank to finance real estate deals. Can anyone expand on this and does anyone recommend a good whole life agent to work with on this? Thank you 

[Matt Ruttenberg]

@Magdaleno Garcia

These can be great tools, but more of a long term play.  You're not tied to using Whole Life, you can also use an Indexed Universal Life policy, which gives you a little more flexibility, but also a little uncertainty since it's tied to the markets.  But, the idea is that the real money maker is outside of the policy in what you invest in.

The concept is, when designed properly, is to get the death benefit as low as possible in order to lower in the internal costs.  This will allow for better cash value growth.

As it grows, you're able to take loans against the policy and use for basically anything you like. The concept with REI is to use it for the down payment in the early years, and grow to full purchases as it builds value.

The best technique is to use it similar to a "fix and flip" loan and then refi into a long term loan and pay off the loan inside the policy.  Wash, rinse, repeat.

I've seen many policies designed improperly, so be careful who you end up speaking with.