Gentlemen,
First, let me introduce myself. I'm a tax CPA with a Master in Taxation. So needless to say, when I heard of a financial vehicle that would allow me to have:
1. Tax Free death benefit for pennies on a dollar
2. cash growth without current taxation, which could range any where between 2-3% plus dividend for whole life to .75%-15% for index universal life
3. cash by accelerating my death benefit when I need Long Term Care
4. a collateralized loan using my cash value at a 1% net borrowing cost (interest I pay insurance company minus interest insurance company pays me back on the collateral).
5. my down payment to get this asset worth $2M (yes, life insurance is an asset just like real estate) is basically between 1%- 3% annually depending on my appetite which can be reassessed annually to fit my budget
I thought it was too good to be true. Are you telling me I can do a wealth transfer strategy involved no tenant, toilets, get an average annual growth of 6%-8%, liquid, low borrowing cost should I ever need fund to do my RE deals, and the cost to get in is only 1%-1.5% annually?
So I made it my mission to learn as much as possible about this too-good-to-be true product called life insurance. I ended up buying $2M worth of it, my husband bought $2M, each of my kid bought $700K. So if you think a CPA with a Master in Taxation knowing something about the tax code 7702A based on which permanent life insurance policy is treated for tax purposes is too dumb to use this strategy, rethink again gentlemen. Without going further into detail which exact policy we bought all I have to say is this: don't trust anyone, you do the studying yourself, you get yourself a license, make sure you contract with a broker who has multiple relationships with over 20 different insurance companies ranging from companies specialize in whole life, to universal life, index universal life etc...run all kinds of illustrations for both whole life, universal life, index universal life, variable universal life, guaranteed universal etc....study their cost structures inside out like I did before you decide". It took me a few months to do all the above but I'm glad I did it because I don't have to listen to a bunch of outsiders who know very little about this special secret tax code and trash permanent life policy or a bunch of insiders whose interest is to sell me policies so they can make money on me. To be fair to both sides, both have their own arguments but you know what, at the end of the day my end game is to make sure I divorce Uncle Same forever. That is why I bought it. However, with so many permanent life insurance policies out there how do you know which one to pick? Well, like I said before, do it yourself. It costs only a few hundred bucks to get a license, one week to study for it, then contact me if you don't know which broker will let you in with many quoting systems from different insurance companies. Permanent life insurance ain't so bad, the Clintons have millions of dollars tucked away in their various permanent life policies ranging from whole life to index universal life? Come on now, do you think the Clinton are stupid?They are also divorcing from Uncle Sam, too :)
