There’s an
insurance product that
can fund intergenerational trust wealth for next to nothing.
It’s a tax-advantaged instrument that:
is historically safer than banks;
offers tax-advantaged compounding of dividend and
distributions;
the trust gets to use the premiums it paid to fund its
other investments through low cost guaranteed borrowing
the borrowing interest rate is historically lower than the
dividend distribution paid out, and you're borrowing against the death
benefits while your policy’s cash value compounds unhindered
by
your guaranteed loan
and it provides life-changing payouts upon family
members’
deaths, guaranteeing a massive influx of wealth at the end of each
generation to refund or expand the trust for upcoming
generations.
The smartest investment brains on the planet work for life insurance
companies. Banks invest a substantial amount of their
reserves in
life insurance policies - in the billions! This investment is
so
good it’s not uncommon for bank balance sheets to show
holdings
of twice as much life insurance than real estate.
Because of their significant social benefit life insurance dividends
are tax-sheltered making their compounding superior to other forms of
“risk-off” investments like US Treasuries, bank CDs
or
bonds.
Also, and significantly, death benefits are entirely tax-free.
Life insurance companies hedge their investments to maximize returns
while taking minimal risks. They have superior century-long
investment records of steady, reliable returns.
Whole life policies from mutual insurance companies offer guaranteed
tax-free growth rates of 2-3% and pay tax-free non-guaranteed, but
reliable annual dividends on top of that. Albert Einstein
said
that compound interest is the 8th wonder of the world. Those
who
know get it. Those who don’t pay it.
Making interest
on interest tax free in this investment snowballs your trust funds into
a family fortune in the safest and most reliable manner possible.
There is no safer, more reliable way to compound a risk-off investment
than a fine tuned, whole life mutual insurance policy.
It’s
no wonder why they’re banks' investment vehicles of choice,
not
to mention a strategy of capital formation for industry titans like
Disineyland, McDonalds, JC Penney, Foster Farms, the Pampered
Chef, and much more.
Whole-life mutual insurance policy investments may be a DST staple for
guaranteeing intergenerational family wealth.
There are several insurance companies that are wholly owned by
policyholders directly, called mutual life insurance
companies.
These are advantageous because all the gains these companies make go
directly to policyholders as opposed to profits being siphoned out to
stockholders.
These mutual life insurance companies offer their shareholders a
guaranteed tax-free multi-million dynastic wealth option at very
marginal opportunity cost.
Here’s how they work:
Choose a mutual life insurance company so that dividends paid on your
policy are not diluted by public shareholder dividends.
Max out the cash value of whole life insurance on yourself, and/or your
family members with paid-up additions and term insurance riders which
offers cash value as high and as close to your paid premiums as
possible.
Borrow back your premiums for reinvestments against the
policy’s
large death benefits, up to (as near as is possible to) the cash value
availability created by your paid-up premiums.
You will be charged an interest rate for your loan, but it will be
historically more than offset by the tax-free distributions your mutual
insurance company pays on your policy.
Pay off any of your life insurance loans with the cash flow from your
policy and reinvestments (do not let it cannibalize the death benefit);
In about a month (insurance loan processing time) after you make
premium payments, you’ll have a very significant portion of
the
cost of this policy returned to you in cost-free loans, so you can
reinvest how you would have had you skipped this dynastic wealth
building strategy altogether. Or you can just let your life
insurance cash value policy compound, if you feel you have no better
investment alternatives.
Generational wealth will flood into your family trust in the form of
death benefits as one generation passes, and another one flourishes
nearly cost-free every generation thanks to the compounding investment
results of these world-class investment geniuses of centuries old
whole-life mutual insurance companies.
In this strategy you get to employ the best minds in the investment
world working for returns on your paid premiums. You get a
return
on your policy which is not reduced by policy loans - rather,
they’re colateralized by the policy’s death
benefits. And you get guaranteed loans with interest rates
less
than the growth and dividend value of the policy whereby you can
reinvest the money you paid for premiums into any other investment your
DST chooses. You’re getting two returns on two
investment
vehicles (the policy and your reinvestment of policy loans) for the
cost and capital layout of one! Where else (other than Lloyds
of
London insurance writing) can you double dip ROI on one investment?
The loans used to reinvest (if you chose) are also drawn
tax-free. They can be repaid with policy dividends, so they
are
largely cost free as well. Because of this loan option your
trust
premium investments are only temporarily diverting your capital from
working its own magic on your own trust investment portfolio.
And while your whole life mutual insurance distributions pay off your
loans, you're left with a small positive delta between your mutual life
insurance cash value compounding growth (thanks to your mutual life
insurance whole life policy ROI) and your life insurance loan
repayment. All the while, your DST reinvestments are hardly
hindered by a temporary diversion of investment funds to front run
these whole life mutual insurance premiums.
In the end your family can gain multi-million dollar payouts every
generation at nearly no opportunity cost because of the investing
brilliance of your (in every sense of the word) mutual life insurance
company.
The DST can own policies paid for by the trust. Having the
seller
as insured doesn’t violate trust rules, since the seller is
not
the insurance beneficiary. The DST can be the beneficiary of
the
payout of these policies to protect against irresponsible fortune
squandering by wayward nouveau rich family members who would otherwise
take the death benefit windfall. And the generational death
benefit payouts will more than replenish the DST investments in family
members in a way that empowers instead of corrupts.
Each generation can educate, train, and, when ready, hand over family
trustee responsibilities to a family member, or investment
professional, or a cohort of family members of the next generation who
have the investment curiosity and character to learn how to shepard the
family trust into each successive generation.
This strategy of using whole life insurance from mutual insurance
companies in generational estate planning goes by many names. So - why
wouldn’t you front run your capital through whole life mutual
insurance policies first, before borrowing the same funds against death
benefits at a net ROI gain, just to turn around and reinvest policy
loans in the investments you plan to make in any event, and collect
millions in death benefits every generation to boot?
What’s
the downside? The upside is millions in additional trust fund
assets that would otherwise be lost.
Be that guy in your family that walks out of the financial stone age
and establishes constructive generational wealth for all your
successive lineage through this risk-off no-brainer strategy.
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