@IBCGlobalInc Founder Reveals Whole Life Insurance Secrets

Hello, everyone. Denzel Rodriguez here, your personal finance geek of the 21st century. And I have my mentor, business partner and longtime friend Steve Parisi back on the channel. It's been, I want to say, almost a year and a half since you last debuted on the Finance Geeks channel here. So it's been some time, but you've been serving your team and yourself has been serving my clients for years. So on the back end, there's a lot of you that know who Steve is. I'm always name dropping him often on my, on my channel. And I've got him here live with us to share some of his wisdom experience in the life insurance space. We're going to be talking about whole life insurance, some of the additional benefits that many of us specifically on this channel, we may not have been paying so close attention to simply because of, say, myself and the way I've presented whole life and the way I've used it in my own, in my own life. Typically there's these certain benefits that weren't really the main focus. And we've been spending a lot of time on the cash value component of whole life insurance, how we've been able to save our money tax free, grow it tax free, leverage it and earn money in two places. And all the fun stuff that's, you know, can be maybe a little hype sometimes and also just very educational use of leveraging money to grow, grow wealth and create generational wealth. So with that, Steve, you are here. Thank you for being here. I'd like you to almost reintroduce yourself. It's been some time, so we've got, you know, new audience here and the channel's grown. And so I'd love for you to just dive into how you got into the life insurance space. A little bit about your background and your experience now being a content creator for, I want to say, five plus years.

Yeah, yeah, absolutely, my friend. I would be more than happy to go through that. And thank you just for, you know, reconnecting. This will be fun talking through everything today and we'll have some fun talking about finance, cash value, life insurance and everything. So I can definitely start with my background. So I got into the business 2011. I was 22 or 23 years old at the time, a young kid. First I worked at a company that was called Bankers Life and Casualty. And that was cold calling people who were 65 years and up going to their doors and knocking to try and sell them Medicare supplement insurance and final expense insurance. And I hated it. I didn't last longer than nine months for the, the, the first full year I made, I think it was $5,500 gross, like before tax. So obviously I struggled quite a bit financially. But after that, transitioned into working as a career agent for Guardian Life Insurance Company of America. Spent a little bit of time there. Then the firm that I worked there went independent. When I worked there, I was involved in sales, but I gravitated toward the illustration software, toward a financial modeling system called LBs that stands for living balance sheet. And helped the owner of that firm and some other people at the firm really with modeling cases for their clients designing policies. I really had fun with that. So spent probably about a year and a half between Guardian and then when the agency went independent before I transitioned to working for what is called an executive benefits planning firm. And that's where I really learned a lot of the ins and outs about cash value life insurance. So my role at that executive benefits planning firm and why they recruited me to that place was called a case designer. So my specific job was to help design the life insurance policies for corporations and executive benefits. What that means is a corporation was interested in taking out cash value life insurance policies. Sometimes it's referred to as corporate owned life insurance, bank owned life insurance, but in most cases it is just whole life insurance products that are designed for as much cash value as possible. From start to finish, the corporation will take out policies on their executives, typically the owners and key members at the firm. The corporation owns the policies, funds the policies. The cash value is an asset on the corporation's balance sheet. So they control everything. And then how it works is they use it as really a retention and reward strategy. So for example, if I recruit you, you work for the company, I'll say to you, Denzel, if you stay with the company for the next 10 years, call that the vesting period. When you retire, I'm going to pay you $100,000 per year. What the corporation does is take the cash value that we've built up in this life insurance policy all those years and compensate you that way. So this way it's not affecting our revenue because you're retired at this point in time, and then when you eventually die, there's still a death benefit on you and that comes back income tax free. So anyway, working there, I learned a lot of ins and outs as far as how to design policies for maximum cash value. I was very, very fortunate to have access to some high level executives at some of the largest mutual insurance companies in the world. MassMutual was one of them, for example, that had insight as to how the actual illustration software was written and how the formulas, as far as like how dividends are applied to base premium dollars, PUA dollars, all that nerdy stuff. But that translated into knowing exactly what to do and what not to do if we're trying to set up a cash value policy for as much cash value for a corporation. So spent a decent amount of time there. And after that, while I was still there, actually, I connected with Nick and Jake. They ran the website becomingyourownbank.com they marketed infinite banking concepts that utilized cash value life insurance as your own financing tool. They were very, very good at marketing. I was a nerdy software guy. Yeah.

So what year was this by now? What, what year?

Yeah, so that was 2013 to 2014, I believe when I connected with that.

Is when you discovered ibc. Become your own banker. That okay?

Yeah, so. So I was introduced to it a little bit before then when I worked at Guardian. The owner of that firm did have a copy of Nash's book Becoming youg Own Banker. So that was the first time I was exposed to it. But working with Nick and Jake, like they were, they were generating leads. Like those guys were marketers and I was a nerdy software guy. Like I was not good at sales, wasn't good at communicating with people, but I knew how to design policies for the elite. Like we knew what corporations are doing. So we ended up working with Nick and Jake. And really what I would do is talk to a lead, say, yeah, we can meet. I can show you exactly how to set up a policy for high cash value because that's what they were always interested in. So I'd literally just pull up the software and design it live. Like we used GoToMeeting back then, the exact same way we would design it for corporations because you can do it for individuals. Like it's the same exact concept. You're just minimizing the insurance expenses and giving the person more cash value. But that's what I would do. Just one person at a time for a time. I worked at the executive benefits planning firm and worked with Nick and Jake. I worked for probably about six months, maybe a little bit more. It just ended up working very, very well with those two.

So like a independent insurance agent?

Yeah, yeah, yeah. That was way more lucrative. So did that full time, left the firm. My dad had a old commercial garage which he let me work out of. It was like 25% of the building. I can share a picture of that. But it was Me and one part time assistant. I didn't even have WI FI in that building. I got a WI fi extender and used it to take the WI fi from my dad's office.

Right.

So that's like. Yeah, I know, right? Early days, you gotta do what you gotta do to get things going. But did that as I just met with people one on one. And that was from. It had to have been 2014 for years. In 2015, while I was still in that commercial garage, that's when I incorporated IBC Global. It sounded like a cool name at the time. So we went with that. So that became official as actual corporation now. And the commissions flow to the corporation instead of just Steve Freesey, some young kid at the time. And for years, 2014 through about 2017, 2018, what built the business was just me meeting with people one on one. Like just thousands upon thousands of one on one meetings. It's really where I got to work that much. Just as far as communicating with individuals, got to read people just through experience and such. That helped me like reflecting back on what helped the most. It was the knowledge as far as how to design policies for corporations and then communicating with people, learning how to draft an email properly, what people, what questions to ask, all of the important stuff that has to do with business sales and really just listening to people. Because to oversimplify, like everyone I work with, all I do is just try and show options and show them the same thing I would want if I were in their position. It's all based on my favorite scripture, Matthew 7:12. Do to others as you would want done to you. I. E. The golden rule. But did that for years. We renovated the, the garage into a commercial office. So we had I think four different offices in there. The conference room, the assistant area. When people walk into the office, which was fairly rare at that point in time. Dara started working just with spreadsheets and kind of as a part time admin assistant here. Dara is my sister in law now. Is like second in command here. By the way, the power director of operations. Oh yeah, yeah, she's. We love that. I'd be lost without her. Like completely lost. Like her organizational skill is phenomenal. But yeah, as we renovated the building, started to recruit in 2018, it was October of 2018, we started our YouTube channel which at first was just webinars with me not even having, even even having the camera on because I was so like stinking camera shy. Like I didn't want to do that.

And keep in mind folks, keep in Mind folks, this. I started my YouTube channel August 2018, but I met Steve and I'm still, you know, I don't know exactly what the first point of contact was, but I'm almost positive it had to have been some kind of a ad of some sort. And I connected with someone else on your team and then eventually got on a call with you. In the early months of 2018, I was an agent already. I was already licensed. And then I was like, hey, can you teach me this stuff? I want to learn this stuff. So I was a customer at first, but I was also like wanting to like do this and help folks and do exactly what you were teaching.

I remember that distinctly. You met with John, who has since retired. He's been in the Dominican Republic mainly on missionary work, although he just moved back to the States. Yeah, he's fantastic. He was one of my life mentors. But you connect with him. And I remember when you had emailed just like the one, just a webpage, what you put together an article of what you were doing for people with finance, specifically helping single moms, which I like a lot. Like, I always admired that. Like, you're a young kid trying to help single moms. Like, that's great because like, not too many young guys do that, right? So it just showed like you had good intentions on the inside, which was fantastic. But I remember all of that vividly. I'm like, that's pretty cool. And you just kept on hitting it. You were on those early trainings back in the day, like when you have them via go to meeting with a small group of agents. Yeah, we do them every week. You're always there and you just kept on keeping on and your YouTube channel really took off, especially with the velocity banking. Like, that is just cool, man. Like seeing him grow over time, I loved it. And then we started the. The YouTube channel as well. And I can keep on going on. I know I've been talking a lot, but if you'd like me to tie up the story, I can do that.

Yeah, absolutely. I mean, I. I want to say after. I want to say maybe under a year is when you started getting in front of the camera. And then the channel started to really grow. And to this point, I think you're at 40k subs or around that number at this point. A little more.

Yeah, just. Just about 40,000 subs. Focusing just on YouTube. Yeah, I love it. Like, I love the education piece and that's one thing. Just with the channel, like, as I've taken on mentors and like we've got a business partner now trying not to chase views and just trying to. Because like my thing is like I always want to stay true to our audience. Like that's who I want to connect with. I wanted to speak to people who are interested in working with us. At first it was on cash value life insurance. Now we do do more than that in terms of other services and products, but it's really always speaking to our target audience, which for a while were technical folks, engineers, IT professionals, business owners, executives at corporations that there were a lot we worked with, but that was our initially. But as we've grown the channel and just staying true to that as that goal. And it's gradually grown too over the years, which is fantastic.

Awesome.

Yeah. So to wrap up that story with the YouTube channel, 2018 is when we started really has grown our company quite a bit. But the One thing with YouTube, you know, @ one point I was trying just to figure out how to grow the channel and chasing views and subs and it, it worked for a period of time where it grew the channel, but we didn't always get the, the audience we wanted. So stopped doing that and just got back to the content that spoke to our audience. As I know who we're trying to get in front of as far as the right avatar, it's usually white collar professionals, engineers, IT professionals, business owners, executives, our biggest clients, a bank where we go over the bank owned life insurance products with them. A lot of people that business owners we work with are interested in that type of content, so made it a point just to get back to that. And that really helped with just the overall quality of business that we received and mentors that I have in business. We took on a business partner like that that helped a lot as far as just helping me to stay focused on what I need to stay focused on. And the hardest thing for me that they've helped me do is say no at times when needed. As far as other opportunities or going on a podcast with other people that I absolutely love and would like to do, they're like, hey, stay focus focused on one thing which is driving revenue or whatever it might be. So that's helped me a lot. Power Focus has also helped me finish my book. Finally, after multiple revisions and making sure it's right, we finished it. It's just about ready to be released and helped me with a lot of things.

So this will be like an early promo here of, of your books because I've, I've known you for years now and you know, there's only so many books in the life insurance space that are technical that would help not only the customer but also the agent. So I'm curious to know what kind of book you're writing and you can give us a little bit of a preview to that, what you're working on.

Yeah, yeah. So it's whole life insurance unlocking the secret of cash value. And it really teaches people exactly what banks, corporations and wealthy families do with cash value life insurance. But it's not so much focused on concepts, instead it's laser focused on the product, what to do versus what not to do. I go over specific examples. For example, the bank we work with, we go over their policies. Right. Confidential info isn't there. But these are real pol like clients of ours and what we've set up for them, how they've used it. I share a story of this couple, ultra high net worth that I met with. Also how I met Elizabeth Morgan who I think is just the absolute best when it comes to tax and estate planning and her, her partner now Brock Bales and her, her team. But the story like of how I met them when their client who I was meeting with was interested in cash value life insurance. But she, she knows the product. She also knows insurance agents and she generally doesn't like them because she knows their motives in many cases. But just how we met the products, we looked at the questions she asked which provides insight as far as you want an attorney that advises billionaires and understands cash value life insurance. Here's the question she asks, here's the thing she advises. So I share a bit about that. So there's a lot in there. It ended up being about 150 pages. A lot of examples, a lot of numbers. Kind of like our YouTube channel. But I just, I had fun with it. Like I, I, I wanted it to be really, really good. Like I finished the bulk of the first draft, the beginning of COVID back in 2020 and then since then have just been going over it, revising it, reading it aloud to make sure like the active voice is actually like what I want it to be. And like now we're finally there. I was like Cheyenne and Dara yesterday were like, oh, I still like literally can't hit send. I'm like, guys, we're good, we're good. Trust me on this. Yeah.

So yeah, for those that are listening, there's this, this video is going to benefit two, two groups. You've got the viewer that is learning all about whole life insurance, infinite banking, how they can put this into their finances, how they can know, change their family line, their, you know, start generation, generation of wealth and get that going. And then this is also really going to benefit the viewer here. That is a licensed insurance agent and you're looking for that technical material to better your own practice. And in my personal journey from 2018 till today, 2025, I have yet to see a dedicated YouTube channel other than Steve Parisi's over at IBC Global where the videos that are posted are multitudes of real life case studies, real life policy designs, real companies, real facts, you know, pieces, ways that, that the agent Steve is crafting this policy for this context, for this situation. You go look at the landscape in the whole life insurance space. There's only a few of us, maybe 10 really qualified YouTube channels and I can name a few off the top. You know, you've got Garrett Gunderson, you've got Wealth Nation, myself, you've got Caleb Better wealth and there's a few other channels, Chris Kirkpatrick, Life180. There's all these YouTube channels that talk about the concept that you can add on to a whole life insurance product and also philosophies the way you view the product and how you incorporate it into a financial portfolio. And even on those very same channels, it's very rare do you see certain technical videos where actually goes into a policy and the company and how they started and how it's performing and all that good stuff. So I always go back to your channel whenever I need a refresher or if I need to figure out like what's the current dividend rate of this insurance company and what's the loan rate and how does the loan rate work again and is it non direct or direct? And it's like I can find all that material on your channel for past five plus years now, which is absolutely been beneficial to my practice. Now I want to ask you from your perspective as an agent, as a business owner serving all walks of life at this point because not only have you served the ultra high net worth individual or high performing entrepreneur or high income earner and even corporations and banks, right? But you've also served a multitude of everyday moms, dads, husbands, wives, and I would say maybe a good portion of that has come from my channel and because on this channel we serve, I serve single moms. That's always been the mission. Single moms, divorced moms, widows, just moms in general. And then that's branched open into serving a dad that grew up with a single mom serving a husband that, you know, loves his mom, trying to take care of his mom and has, you know, his wife and just resonated with that, that message. So every now and then I'll get a high performing entrepreneur or business owner or someone that's looking to really improve their life financially. That's maybe not a mom. And eventually, when we have the conversation of life insurance and how it can improve their life, I then push them over to your team and you provide this white glove service, A to Z, to really provide them with exactly what they're looking for and all the education that comes with it. It's a really clean, phenomenal, down to a science kind of a process that you have that I've been able to witness and that's caused a lot of everyday families. To your point, yes, the ultra high net worth corporations, banks do this, but you're coming from a perspective of serving those people and then also saying the person making 80 grand a year could do this. The person making 100,000 a year could do this. The person making the average income can do this at a much, much, much, much, much smaller scale, but can be a part of one's portfolio to help them, you know, reach retirement, to help them pay off debt, to help them just save money more efficiently and ultimately be a better borrower, honestly, is what I've learned. This has taught me, you know, over the years. From your perspective, other than the cash value component of life insurance, what are some other key benefits that a whole life policy brings that, say, people on my channel, yours are maybe not paying that close attention to, but under certain circumstances is immeasurable, incomparable to any other kind of financial product out there.

Yeah, definitely. I mean, I can, I can share my story a bit, which I think in recent, in light of recent events has definitely like woken me up a bit, which you and I have talked. I haven't shared it much, but I'm, I'm comfortable. So when I first got life insurance, I was totally focused on the cash value. We can pause for a moment. Is it pixelated?

It is. Okay. Whenever you're ready.

Yeah. Want to loop back in? Okay. Yep. I'll let you count me in. So I don't.

So three, two, one.

Yeah. So I can share my story to answer your question, especially in light of recent events which I've shared with you, but aside from that, just my team. So when I first got life insurance, when I was 23, 24 years old, you think I care about the death benefit? No. I was laser focused on the cash value. And over the years as I've gotten policies, so I've got a total of five life insurance policies. The focus has always been cash value. Now the death benefits are very large as well, just because of the MEC space and such, like how we'll design policies. So I am 36 years old right when we're talking today, and for years I've always been focused on the cash value. And nine out of 10 people we speak to say, hey, I don't care about the death benefit. So I work out every single day. I've done that forever. Always eat healthy. My wife's fantastic, cooks healthy as well. About a month ago, right, early April, went to the doctor, found a mass, turned out. Yeah, when you get a mass, you're worried it's going to be the C word. It was so found some cancer, thankfully. Very, very thankfully. It was stage one. So it took them five days from the time of finding it to operate. Like, it just moved so quickly. My wife and I prayed a lot, did research like, okay, this is the smart thing to do just based on, like, where the mass is and everything, so cut it out. And then after that, about two to three weeks, just of the waiting, right. Pat passes when they are doing the pathology report, you have a CT scan, all that stuff, blood work, everything came back clean. It was all confined to one area. Considered just stage one. Early, early stage one. No spreading, nothing like that. I just got to keep an eye on it for the next two years. And now my wife and I are doing everything in terms of like, healthy diet. Healthy, healthy diet. Like the things you can do to try and like, starve cancer cells to keep that all, like, at bay. So hopefully it never spreads. I don't have to do any chemo, none of that stuff anyway. I've had friends and family on my wife's side that have gone through cancer. It's. It's horrible. And I'm extremely thankful that we caught it early and it ended where it ended. Hopefully we're at the end of it forever. But anyway, the future always brings different things and you learn from it and can get stronger from it. To your question about life insurance, while my focus has always been on cash value, I was extremely happy and comforted for the reason that I had life insurance policies in force for the life insurance. One for my wife, that was the big one, and then two for the business as well as we've got a key man policy. So in the event anything does happen like that, that gave me a ton of Peace of mind. Especially now. Like, if I wanted to apply for a policy today, I still feel healthy. Like I just got back to running again. I had to wait three weeks after surgery. Doctor said four, but I waited three before I could start running again. So I feel good. Like I'm getting back in shape and everything. But still, like, once you get that, you've got to wait some time before you can, can apply and be approved again, which is totally fine. But at the same time, I am extremely thankful for the actual life insurance. I do have some term policies that are convertible and just knowing the rules of the game, I know I can stretch those to make them a bit bigger than the current term death benefit just based on the conversion rules that companies offer. So while I'm not always a fan of convertible term because you can't customize the design how you'd like to in a situation like this, you bet I am. So, yeah, aside from the cash value, which I know is always the focus, the death benefit obviously has a ton more value and just point of emphasis for me now because it was a situation where that kind of stuff crosses your mind, like whenever you, you hear the C word, like, oh no, what's going to happen here? But yeah, the life insurance piece is important because I did have the peace of mind that Tara would be okay and my employ employees. And we've got that because I've got a business partner now. So if anything did happen, like you've got that Key man risk where now there's a large sum of money that's paid income tax free. The purpose of Key man insurance is specifically for that to help continue to cover operating expenses. Find someone else or multiple people that can help fill that role. Because some of money is paid income tax free. The purpose of Key Man Insurance is specifically for that. To help continue to cover operating expenses. Find someone else or multiple, multiple people that can help fill that role. Because when I started the company and we grew it, yeah, like I was just having fun and such and I still do. But we're about 30 employees. All of them are my friends. Like I know some better than others, but I, I would not want them to have to start all over and find a different job if anything happened like that. That'd just be devastating.

Yeah.

So.

And you're, you're providing a livelihood for those people as well. So that.

Yeah. And they do. For me, like, it's all like teamwork together and they work fantastic together too. I enjoy working with them, the ones that are here all the time. The ones that are remote. And I want to make sure that that environment's always the same. But it's just me speaking more about the life insurance piece now and how valuable that is in addition to the cash value. Cash value is great. Like that's your personal line of credit for the business for personal use. I've used that. I'll continue to use it. That's like where you have fun, right? I enjoy that. But the life insurance, that's definitely way more valuable to me personally now because of that life event. It gave me peace of mind and just setting everything up. Like I already had set up my trusts and we had our LLC set up. There are a few minor changes which I just touched base with my attorney beforehand just to say, hey, here's what's going on. Can we just make sure everything's in order? I think I'll be fine. But just in case, it's the smart thing to do. And we did that.

And that she nearly lost her life and she had to undergo multiple surgeries. This is a healthy kid, 20 years old and in perfect health. And I had the honor to put a policy on her.

Boy, am I glad I did that those years ago where I'm like, yeah, I know I should. But yeah, I'm like, I'll be fine. I'm glad I did it because, yeah, who knows what's gonna happen, man, like 36.

That is a big, big takeaway for those listening that, you know, again on my channel, last seven years, I want to say the last six from 2018 to 2024. The bulk of the content has been a number one focus. Priority is the cash value and how you can use it now and pay off debt, do all these wonderful things. And then similar to around September of 2024 and the car accident happened on October, October 4th of 2024. So we're talking weeks right after the policy was in force, like right after. And then this event occurs. And I'm sitting here like, I never. What happened to you? I had a incident in my own life. Not me personally, but someone very close to me. My sister in law was in a terrible car accident that she nearly lost her life and she had to undergo multiple surgeries. This is a healthy kid, 20 years old and in perfect health. And I looked at, I never even paid attention to the death benefit. Even when I was presenting to her. I was like, this is the most important column for you right now. Had the honor to put a policy on her around September of 2024. And the car accident happened. This is how, this is where you're going to save money. This is how much money you're going to be saving. She's going to do a $10,000 a year policy. We chose massmutual and you're just going to save your money here. And on October 4th of 2024, so we're talking weeks right after the policy was enforced, like right after. And then this event occurs and I'm sitting here like I never looked at, I never even paid attention to the death benefit. Even when I was presenting to her. I was like, this is the most important column for you right now. We're going to build the discipline of saving money comes with this big old death benefit right here that you really don't need to worry about. If anything happens. We've got that death benefit now, you know, your family be taken care of. But this is what it is. And so now after that event and then other stories that I've heard along the way, I'm like, this is how. This is where you're going to save money. This is how much money you're going to be saving. She's going to do a ten thousand dollar a year policy. We chose massmutual and you're just going to save your money here and we're going to build the discipline of saving money comes with this big old death benefit right here that you really don't need to worry about. If anything happens. We've got that death benefit now, you know, your family be taken care of. But this is what it is. And so now after that event, oh wow. You know, how can I not only talk about the cash value component, which is still a very important piece. It's one. And then other stories that I've heard along the way. I'm like, why again, 9 out of 10 people are gonna sign up, why they're gonna do it in the, in the first place, but also say, hey, you're 40 years old, you're 45, you're 53 kids, four kids, married, the whole, the whole deal. Maybe there's some balance of priorities in, yes, high cash value and maybe also a component of do we have enough death benefit on this, on this policy knowing that it could have an impact on your cash value performance in the early years, but is that worth it for that kind of person? You know, and under those situations, have you felt that way over the, you know, over this, going into this new season where you felt the need to maybe talk a little bit more about the death benefit with clients or, or even with your team, your agents, your sales agents. Any changes there?

Yeah, good question. So. So not a whole lot as far as, like, you know, putting it on someone to say, hey, like, let's make sure. Like, make sure we really try to sell more death benefit. Or trying to emphasize this sometimes, but I've always tried to focus on what the consumer wants to focus on and start there and then add some additional benefits, like, hey, here's a reason why we might want to consider the death benefit, or, hey, here's how other people view the death benefit. I can give you a quick example that we've used a lot for people in retirement or very, very near retirement. It involves a strategy of leveraging, typically an old IRA or 401. And it has to do with taking the value of that, insuring it, producing income, and also leaving that to the next generation. So the idea of how do I spend my money and pass it? Because you need the death benefit to be able to do that. Someone who's very concerned about generational wealth, and it works for somebody who's a multimillionaire or someone with a few hundred grand in old 401k or IRA or something like that. Like, we've. We've been focusing on that type of planning quite a bit, and a lot of people are attracted to it. I. I can share an example of that, which, which kind of hits on that point of the death benefit, if you'd like.

Yeah, absolutely. Let's do that.

Okay. Yeah, definitely. So I'll use a recent case study as an example with a woman named Leslie, who I absolutely love speaking with. Like, the energy with her and her family is so high, and she has a ton of fun talking about finance.

I love that.

Oh, she. She's fantastic. So I think she's 58. She'll be 59 in about a year. She's got an old qualified retirement account with like $225,000 in it. Now, she had expressed that what she wanted to do with that retirement account is not spend too much of it because she wanted to be able to leave something to her children and grandchildren, like, that's important to her. So if she could grow it and leave something that's ideal, even though it would be taxed, it's still a balance that's going to them that was very, very important to her. At the same time, if she could use some of that to supplement income, her income in retirement, like with Social Security, her husband's pension is where she'll want it. But just with everything going up she could use some additional income. Like it will put her in a position where she's like, all right, this is good. Yeah, yeah, yeah. Not now, but in 10 to 15 years from now she definitely will, or she thinks she will and so do I. So what we did there is we've got that old retirement account with about $225,000. She's 58 now. What she can do is transfer that to an annuity, IRA to annuity. There's no taxes, that's just a rollover. I'm transferring it from a similar account then at 59.5. So about one year from the time of transfer, she flips the income switch on. Now that annuity produces a guaranteed income. I think hers was between $15,000 and $18,000 per year, but it was guaranteed income for the rest of her life. We flipped it on one year later because she didn't need it yet. So what we did is take that $15,000 per year and feed a life insurance policy for about eight years. The reason why is because in eight years she'll be just past 65 and she might want to start taking the income. She might need it at that point in time. So funding a policy with just $15,000 per year for eight years, instead of just setting the death benefit at the absolute minimum, guess where we set it?

Absolutely.

$220,000, $225,000 to insure the old IRA. Now she's got $225,000 in a life insurance benefit which is paid income tax free to her beneficiaries if anything happens. So now you've insured that asset with a tax free benefit instead of a tax deferred way better. But the cool part is it only needs eight years of funding to get away with less. But we fund it for eight years. We don't do our classic chop the term rider off, drop the death benefit, maximize cash value growth. She could if she wants, and we'll show that when that time comes. But we keep the death benefit at 225. It goes up as time passes.

That's what I was going to, you know, ask. Yes, 15 grand that we're contributing. I'm assuming, you know, there's that cash value growth that's going to increase the.

Death benefit big time too. But she also stops after eight years. So beginning year nine, all of the like, the cash value continues to grow, grow through dividends. That also pushes the death benefit up. But then after eight years that annuities annuity is still producing $15,000 per year. She now takes that personally for personal income. While the life insurance policy sits on the back burner and grows. She's got cash value if she wants to access that money, which she can access tax free now, by the way, which is sweet. But the annuity continues to pay. And if she makes it until she's called 85 or take 90, I think we looked at the total income that the annuity would produce. I can run the Math. It was $15,000 for about 30 years there. I got it. So $450,000. It was a little bit more because it was an exact 15, it was a bit more. So she put in $225,000. She got $450,000 from the annuity. But at 90, the death benefit had appreciated. It was around. It was between $350,000 and $400,000. Call it. It was about $400,000, actually. Wow. So what is that? Yeah. So not only did she get that $450,000, she used some of those $15,000 payments to put into a life insurance policy. Now $400,000 is paid income tax free to her beneficiaries. So you used two insurance products, an annuity with guarantees, a life insurance policy with guarantees. The market's not for her. It's just a peace of mind strategy that makes it easy and you get the cash value, which is nice, and the death benefit, which satisfies that desire of leaving money to the next generation. But just from a tax efficiency standpoint, it makes it so much better, if you want to call it that. And you have no market risk either. So that's a high level overview. We've got a video on our channel. It's like 12 or 15 minutes. That goes through that with visuals. But that's one strategy that does leverage the death benefit more. It's more so planning and coaching someone in retirement where you leverage different products, you know.

Yeah. For people listening, that might have flew over a lot of people's heads. But understanding that, wait, there's a way to have your cake and eat it too, as it, as it relates to a lot of folks that are five, 10 years out from retirement. Because there's this, there's this huge population of people retiring every single day. And then people that are five, 10 years out from retirement, they've got money locked up in these qualified retirement accounts. And those accounts are great for accumulating well. But then the strategy must change when you get into the distribution phase, the, the sequencing of returns. And this is things that I've been learning about lately and finally realizing, wait a second, you know, this whole life policy or these, you know, there's a new. The annuity, you dropped that in in our conversation here. But focusing on the, on the whole life policy, it has multiple functions and it solves for multiple things and while simultaneously removes certain risk the older we get. And it's so interesting us young guys, how we first started out. You bought your first policy at 23. I bought my first policy at 23 as well. And again it was like it was just a cash value. And with all my client base that I now have over the last seven years, it's been all about the cash value. In the last year, it's been just presenting the conversation, not to your point, still focusing on what exactly the client wants and then also saying, here's how others have viewed the death benefit. Here's an experience I've had that you may not have had yet or maybe you did have. And we can actually incorporate some of that thinking into our design process to, you know, maximize all the benefits that could come with life insurance over, over the long haul. So I love that we're diving into that here with you and you know, really cracking open some potential scenarios. Just like Leslie in that case. And quick question. With the funding of the 15,000, the split in terms of cash value to percentage of the 15 that goes to cash value versus death benefit, now that you're dealing with an older individual and there is a focus on solving for death benefit amount, does the break even period, did it still end up kind of being similar to a minimum design or is it slight difference and anything ever so slight?

Yeah, so the design of the policy was still a 1090, meaning 10% base premium, 90% PUA. We just added a little bit larger term insurance rider. That's how we got the death benefit to where we wanted. So the break even point was about year five instead of to where it would have been between years three and four. If we just stripped the term down to the absolute minimum, we typically always shrink that base as low as we can. The simple reason why we always did it for corporations. And when I track the actual results of policies, not just illustrations, but real policies that have lived the test of time, it always delivers the best results from a cash value performance standpoint. And then the policy with the greatest cash value will also have the greatest death benefit long term. Typically right when you hit age 85, like when insurance companies are expecting us to kick the bucket, that's usually when we see the death Benefit the highest two with a high cash value policy. So we still did that, we just added more term. And when we looked at the different designs like we always do that one, that one produced the most, if that makes sense.

Yeah, no, that's awesome. And it solved for exactly what she wanted. She wants to be able to leave money behind, but now she's able to leave the whole 225 for the next generation and spend the 225 plus more plus have reserves in the whole life because although you're paying for death benefit, you also have a living benefit which, the cash value which is a lot of what we all like to like to look at. And she's got that reserve component which all of that can be used tax free in retirement as supplemental income or you know, take care of an emergency or an unexpected expense. Really whatever she likes. So I'm blown away by those, by those factors. I'd like to transition a little bit into another topic as it relates to whole life insurance policy design and flexibility for the folks listening that are like, okay, I've been on this journey learning about infinite banking. That's the most say popular term. And I think that's what catches a lot of people's attention. This idea that an everyday person of any age group, any people group could essentially become their own bank, establish their own tax free family banking system. These wonderful terms that I think really resonate with folks and then they go in this journey of YouTube and social media reading books, what would the Rockefellers do the and asset Nelson Nash, become your own banker. That's one of the classics and a few others out there. Not a whole lot of books. Again we're talking a handful of books on this very topic. Like a handful. So there's only so many books you can read and there's only so many people you can learn from in this particular space. And I'd like for you now that you've been doing this since 2013. So we've got 13, 15 years in the books, being in the industry.

Yeah, the niche. Yeah, I mean 2011 started, but yeah, as far as the niche, like whole life cash value, over a decade. Yeah, well over, yeah, yeah.

So in that, in that time, what are some key foundational, you know, principles you've been able to see as it relates to the insurance company that we choose, policy design that we, that you, you know, typically or, or form that you work with and then as it relates to flexibility, kind of explaining what that is, what flexibility means and how people can use that to their Advantage as it relates to saving money in the whole life and adding funds contributing. Because Unlike a Roth IRA or unlike an HSA or a traditional IRA 401k tsp, there's all these caps that exist on what you can fund, how much you can fund per year, and if you don't fund that that year, you can't make up for it next year. And there's a lot of limitations. But when it comes to whole life, there's virtually no cap. Yeah, we get to set that ourselves. We have to customize that with the agent.

Yes, yeah, definitely. So I can go through that. Sure. So where I usually like to start, if someone's interested in a whole life insurance policy and we're looking to set it up for cash value, I'll go through this slow and if you have questions, feel free to stop me in my tracks is the first thing I like to do is educate the client on exactly how to maximize the cash value. And what I like to do is follow the money. Meaning the model that I have seen work firsthand for corporations and wealthy families and specifically where they do not regret putting money into the product is usually with a whole life insurance policy that is positioned with One of the four major mutual companies who are MassMutual Guardian, New York Life and Northwestern Mutual. And it is designed with the lowest base premium possible. That specific design for a very cash value focused buyer has produced the highest cash value. And what I mean when I say that is based on actual numbers, not just illustrations. So where I've seen people express buyer's remorse quite a bit is when they get a policy with a different company that we have not been able to attain any proof of performance. They look at the illustration, it projects good looking numbers but then in reality it underdelivered. I'm not saying all other companies aside from the four major mutuals do that, but we've received consistent proof of performance from those major mutuals. Corporations use them. It's who I used, who the executive benefits firm used back when I worked there. It's still who we use today. The bank we work with, their policies are with MassMutual Guardian and New York Life for their bank owned life insurance policy purchases because of that proof of performance, not just good looking numbers on paper. So if there's a model that I know works, I have a very hard time recommending someone go with a different company where I just have not received any proof of performance yet. It's quite simple, like I need the proof. Once I get it, I'm more comfortable Using other companies and we always, we actively try and get it from companies and other agents. But the model typically I like starting with those companies because I don't have to worry about a client saying hey, this is just under delivering every year. Which I've seen happen a lot with whole life. It happens a lot in the industry in general. That makes it very easy for the critics of whole life insurance to say yeah, you're going to see great, great looking numbers on paper but it's just going to under deliver like it makes it a punching bag. So you've got to do it right in that respect. I know the model that has the greatest likelihood of working so I use that. Any questions on that or making sense?

We're good, thank you. Cool.

Yeah, definitely then with the policy design piece. So what I don't like about whole life insurance just on the surface is that it can be very, very boring. Most people hear the word whole life insurance, they think I'm going to have this bill. I pay the same amount every month, every year it's the same thing. If I miss a premium payment, the policy will lap, oh what if I can't pay it? All that stuff. So how you can prevent that from occurring is setting up a policy to say as you said, be flexible. So with a life insurance policy, if you're going to pay a dollar into it, you, the policyholder can choose where that money goes. It can go toward your base premium or toward your paid up additions rider. The short version of that is PUA rider. Base premium dollars typically build zero in cash value in the first year, sometimes the first and second year depending on the company and product. Whereas PUA dollars show up in cash value, it's usually between 95% and 98% of the PUA deposit I make shows up in cash value immediately begins to compound. That's what people do when they're interested in cash value. So where the flexibility comes into play it does depend on the company as all companies have different rules. But generally what you can do is set up a policy where I'm only committed to the base premium and then PUAs can be adjusted, can be adjusted or added at leisure. So for example, if someone says to me, hey, I want a policy where I can pay up to $100,000 per year, what I'll do is say alright, if we look at Guardian Life Insurance Co. For example, I know that we can pay 10 times whatever our base premium is in PUAs per year. Which means if $100,000 is your desired maximum, we'll set the minimum as low as we can, which will be about $10,000. And that would include the term insurance rider. It would be a 10,000 or $11,000 net. But we're committed to $10,000. We're billed for $10,000 every year. We could even break that up over 12 months, which is $800 and change per month. But then their target was $100,000 per year. That with Guardian specifically can be added at leisure. You could literally go into your mobile app and just ach, transfer money from your bank account to your Guardian policy. Boom, throw it in. There's no limit to the number of PUA payments over the course of the year. We just set that maximum, which is referred to as your MEC limit at $100,000 or higher if they're going to fund for a long time. But Guardian lets you commit to a minimum amount and add more money at discretion at leisure. Not all companies allow you to do it at leisure, but that's what we would do. If somebody's paying in $100,000 per year, we'd set the minimum at $10,000. If they say the maximum I want to pay in is $10,000 per year, we would set the minimum at about $1,000 per year. So now they're committed to that with the ability to add the other $9,000 in PUAs. And sometimes the minimum ends up being a little bit higher than 10%. Maybe it's 10.5% or 11% with a term rider and such. But the point is we want to reduce the obligation as low so it never feels like a burden to them and they can add extra money at their discretion. Now you've taken that old boring bill out of the equation and made it a flexible savings asset. And the money that they add at leisure, they see that show up in cash value now and they like it and also enhances the long term growth, which makes it even better. Right? Yeah. Right.

So to get even more technical, and this is for the agents watching and those that are aspiring to become agents and they're, you know, learning about the different companies. So we're, you know, we're talking about Guardian Life, which is one of the top four companies that you like to use that have the actual performance and results. And it's a company I personally have a policy with and have been using for years with my clients in that first year when funding a policy. In that example, we can even use the smaller example, 10,000 a year with a base of just a thousand bucks and Once it's all said and done, when you add the term and the PUA costs in there, maybe it's a few hundred dollars more or a thousand dollars more, if that. On top of the thousand that you're minimally required to do in order to max fund up to 10. So you set the minimum requirements so low and then you've got all this space to grow with the policy. Now specifically with Guardian, can you talk a little bit about in the first year and also over the years of the policy when it comes to paying 10,000 a year, like can I, if I go less, what happens if I don't fund, you know, a certain amount over a certain period of time? How flexible are we talking? You know, what limitations exist?

Yeah, good question. So I can break down the nuances and we can focus on Guardian. If you want to talk about MAS afterwards too, we can do that too as they can be even more technical. But we'll stick with Guardian. So Guardian as a company, PUAS can be added 100% at your leisure. We already talked about that. That means you log on your online account and send a check and just throw PUAs in whenever you want, which is nice. Now as a company, in the first policy year, they will allow a policyholder to pay up to 50 times the base premium in a PUA deposit. That can be upfront or over the course of the year. They'll allow that to be illustrated. That specifically accommodates clients who are starting with a large lump sum. Why Guardian rolled that out? They rolled that out in late 2021, 2022, when there's a big industry change really to replace a single premium life insurance policy. They used to have a pure single premium life. That's a one time MEC policy. This replaces it. If you're not adding a term rider. The thing is what you can do if you're savvy is you can add a term insurance rider to raise your MEC limit. Add a lump sum could be as high as 50x, but I can get a big deposit into the policy, have a very, very rich first year cash value. I usually break even between two and four years. A lot of times when I start with a big dump in like that. Yeah, but yeah, I can go up to 50 times the base premium in the first year. They allow that with all policies regardless over the first 12 months during the first year. So it can be multiple or one. They allow that and we can illustrate that too, which is nice. So in the first year up to 50x, Guardian will allow that Whether I have a term insurance rider attached or not. The thing is, if I don't have a term insurance rider attached, while Guardian allows that in terms of a company rule, the IRS rules you'll trigger a MEC if you don't have a term insurance rider attached. So to prevent the IRS mec, we'll attach a term insurance rider. And now all of a sudden you can have it classified as life insurance and be able to access it tax free. Like that's what people are into. That's the first year. From the second year to the 10th year, if you just go with a standard whole life insurance policy, meaning you don't add any term insurance riders, you'll be able to pay a maximum of three times the base premium in PUAs per year without any medical underwriting. If you want to go higher, it will require medical underwriting. From the 11th year onward, the maximum you can pay in PUAS is one times the base premium without any underwriting. You want to add more, they'll say you'll have to go through underwriting. That's the standard, which we almost never do. So how you beef up the limits is you can attach a term insurance rider. The one you want is called a one year term insurance rider. It's exactly what we did and still do for corporations, a one year term rider. When that's attached to a policy, what that allows you to do is now go up to 10x the base premium beginning year two, because remember the first year you go up to 50x 50x. There we go. So with the one year term rider, you can now illustrate up to 10x the base premium per year. And you can do that as long as that one year term rider is still attached once it expires. Because how that one year term rider works is as you pump money into the policy, specifically PUAs, your whole life death benefit is going to grow along with your cash value. And as that grows, your term comes down and eventually goes down to zero. So whether it naturally goes down to zero or if you chop the term rider off, as agents can manually chop it off, usually after the first seven years to prevent a mec once it's gone, then you go back to the standard PUA limit that Guardian offers, which is the three times through the 10th year and 1x 11th year onward. But as long as it's attached, an agent can illustrate and a client can pay 10x the base premium per year. Questions thus far.

So in that example, I'm funding a policy where I'm creating the ability for me to save 10,000 a year, I've shrunk the base premium minimum requirements as low as I possibly can go roughly 10% of my funding number. I can do up to 50x the base in the first year. Years 2 to 10, I can do 10x the base premium or basically however long I have have that one year term rider on. So if I'm only looking to fund the policy for 10 years, then I'm only going to have the rider on for say 10 years. But if I want to go longer, then we'll probably do some changes to allow for that. So that's all clear. And then the part about once the rider is off, if the term rider came off before year 10, you can do 3x the base premium until year 10 with no underwriting. And then after year 10 years 11 and onward, it's 1x the base premium. So to give a real life example, I have a policy guardian where I'm funding it. It was designed to be max funded for seven years. So after the seventh year in this example, my OIT rider would drop off at this point and then I can pay in up to 3x the base premium from for years 8, 9 and 10. And then years 11 onward would be 1x the base premium. But if I keep that OYT rider on after year 7, which I'm assuming we can, then I can still do 10x, correct?

Yep, correct.

Okay. Yeah, gotcha.

Keep 10xing in another thing on that. So with the one year term rider, let's say you have a policy go back to the 1k minimum, 10k max. To oversimplify this, let's say the MEC limit is 10k per year, right? So you set it up where you can fund up to that MEC limit every year. Let's assume you don't put in 10k every year. Let's assume over 10 years you pay in $5,000 per year, which would be a total of $50,000. By the 10th year you could have paid in $100,000 if you would have maxed it out every year. Again, I'm oversimplifying here, the MEC limit works differently. But just stay with me. Yeah, cool.

For all the agents we're overwhelming.

Exactly. So by the 10th year Guardian will allow this. Again, if we have the one year term rider still attached and enough terms still remaining is if I could have paid $100,000 by the 10th year and I've only paid in $50,000, I can make a big catch up payment which is just a big PUA deposit, but that exceeds 10x and we've had clients do that for years where they make large catch up contributions because they didn't max fund the policy. Every year they sold the piece of property, they come into a windfall, they say, hey, I've got this extra money, I'm thinking about getting a new policy. I'm like, hold up before you do that on your existing policy here, that's six years old, you can actually throw it in here, you've got some of that unused space and you'll see a positive return immediately. Whereas if you start a new policy, you've got to go through the initial expenses again. And they're like, oh, well that's fantastic. I'm just going to do that. Yeah. Because it's in your best, like I would do it too. It's like in their best interest to maximize the value so you can make up for lost time with those catch up contributions. Guardian allows that. Massmutual also allows that. The big key on that, to avoid the hassle of having to go through underwriting or the company just telling you no, is you do have to have that one year term rider that's not attached. You're not going to be able to do that or it's just going to be next to impossible. Yeah.

Okay. Now Guardian's got this rule about in the first year about, you know, first 60 days, you know, you got to get in that set amount of money that you're wanting to pay into the policy. And I think agents often get confused about this rule. And this is again more technical. This is for the agents.

The unscheduled PUA MEC rule. Yeah, yeah.

Help me understand that because yeah, I've got a policy where it's set up to pay 70,000 a year.

Mm.

And in my first year, although I did that number day one, I could have spread that number out throughout the year without obligating myself. 270. And so my minimum amount was 9,000. So what? So what end up actually getting. I actually got a bill to pay 9,000 day one of the policy and then I was able to dump the other 61 at leisure. In my case, I did it kind of both at the same time. But to have that flexibility is huge. Where you're like, okay, I'm able to get all of the benefits as if I was doing it all at once.

Yeah.

But not be obligated to it. But then there's this rule with Guardian about this whole unscheduled PUAs and scheduled PUAs 60 day.

Yeah, so yeah. So that rule is actually with all companies, it's a, it's a MEC rule. So it's IRS rule, not so much the insurance company. So, okay, yeah. So the simple answer is if you've got a one year term rider or your death benefit doesn't increase, whether you add the extra PUAs or not, like you if you just paid 9 or if you paid 70, your net death benefit in year one, no different. It's no different from when you started either. So that whole 60 day rule is you don't have to worry about it at all. What it's referring to is with a life insurance policy, if I started a policy with no term rider, say the death benefit is $1 million, my MEC limit might be $30,000. Now if I dump in $10,000 into PUAs, yes, it's going to give me cash value, but it's also going to push my death benefit up. Let's call it $1,030,000 or $1,030,000 now, which if my death benefit increases, my MEC limit is going to go up a little bit. So if it was $30,000 with a $1,000,000 death benefit, now it's $31,000. Right. With $1,030,000 from adding those PUAs. So adding PUAs to a policy without a one year term rider will push the whole life death benefit up. Like when you see a classic whole life insurance illustration with the increasing death benefit, the higher the death benefit is, the higher the MEC limit is. So what Guardian shows in their software, a couple other companies do it too, but they'll show okay, when you add PUAs, death benefit goes up and the software will show the MEC limit that matches that death benefit, including the PUA payment. However, the IRS rules with the MEC rules stipulate that during the first 60 days, you've got to add those PUAs to have the MEC limit based on the death benefit figure you see in that illustration. To simplify, a million dollar death benefit gives you $30,000 in MEC space. If you add $30,000 upfront on day one, that might push your death benefit up to $1,100,000, which now your MEC limit is $33,000 or whatever.

Higher. Yeah.

And then now it's $33,000 per year. However, if day one, you start with a $1,000,000 death benefit, $30,000 MEC limit, you just pay the minimum and then 61 days later you throw in $30,000 or up to $30,000, you fund it up to the MEC limit. The death benefit is pushed up to $1 million $100,000, but the MEC limit's still at $30,000 because. Yeah, so if I add it in the first 60 days, then the MEC limit is going to be based on what that death benefit is during the first 60 days. Whereas if I add the PUAs after the first 60 days, the death benefit still goes up, but the MEC limit doesn't go up with it because I've passed that 60 day window. It's somewhat meaningless when you're using that one year term rider because your death benefit won't increase at all ever as long as the one year term rider is attached because you're inflating it with the term rider from the get go, you're building in the future increase from day one. So the whole 60 day rule is at the window, but that's what that's referring to. Yeah. I hope that makes sense. Go ahead.

So what, so what happens is you're when you're as the agent designing this whole life and let's say you're going to use Guardian, but this is also with all the companies for the most part.

Yeah, yeah.

But just looking at Guardian, as long as we've got that OIT writer and we're going to pay in 10,000, but your client doesn't have all 10k right away and instead of informing them, hey, you only have 60 days to get that 10k in there, you actually can override that rule by having this OIT rider on there which now relieves the pressure off of the client to get 10k within 60 days. They now have the full 12 months to do the 10k. Now when it comes to issuing the policy to the agent, to the customer, the they'll see the base premium, thousand bucks, we'll see the term writer and the PUA rider. Is there a separation in scheduled and unscheduled PUAs? Like a little key difference there in terms of how they're issuing it to the client, where the client said, hey, I want to do 10 but I don't have it day one. But I also want to have the benefit of starting the policy today and give you a thousand bucks or give you 2,000 bucks right now and dump it in later without having a six day rule.

Great, great question. Most clients we work with will do exactly that too. So if I've got that policy where I can fund up to 10k per year, my base premium is $1000, say my term cost is 250 bucks. So I'm billed for 1250 per year. How we'll usually set it up is exactly like you mentioned. So I'm billed for the base Premium and the $250 term cost. If you're focusing on Guardian, that $250 term cost will actually be under the column Scheduled PUA because the Scheduled PUA covers the one year term cost. So the scheduled PUA is covering the OYT in that case. And then unscheduled PUAs are unscheduled. They can be added 100, 100% at your leisure. The thing is about those, they won't be reflected in the, the formal contract and the issue illustration because they're, they're up to the client, like you may have conceptually planned to do it. And the numbers look great. With those unscheduled PUA payments and 10k per year, they see that cash value build up. But if it's just the minimum, they're going to say, this looks horrible when I look at the cash value. What does? Because we're assuming you only pay the minimum for it to look like what we looked at before. It does require that you put in the full 10k. But why it looks like this, Mr. Client with the horrible values is because we're only assuming you pay the minimum. And we do that because then the company will only bill you for the minimum and you're not on the hook for 10k per year. That makes sense.

That's perfect because all right, I've got so many clients I've accumulated over the years that came from other, other agents, other agencies, and they're locked into this super high base premium of maybe five grand, maybe six grand. And they can do up to 10, but they get to a point where they're unable to keep up with the base premiums. And this is where you, you know, get into buyer's remorse and how it gets, you know, difficult to maintain the policy. And then the client is stuck with thinking, should I keep this? Should I let it go? And whenever I've looked at whole life policies, even the worst of the worst policies, a part of me wants to hold on to it, especially if I've had it for 10 years. You know, like even the worst whole life policy, if you've had it for 10 years or longer, it's doing its job to that extent and it's earning. And you know, I try to do everything in my power to, you know, educate the client, you know, save that and then just moving forward. When you go to do the next one. We won't design it that way. Where you've got such a, you know, a high, a high base commitment essentially. Now to kind of put a bow on this and kind of wrap things up here with the design features and the flexibilities. Some of the rebuttals I'm sure you received over the years and some of the objections or questions are, well, if you've got this low base and this ability to max fund and you're filling that gap with term which is unreliable in terms of a set price amount. Right. The OYT could change. Okay, fair. And there's this fear that may not be backed up with solid fact or even historical data about the policy itself maybe becoming a MEC over time. If you're max funding the policy, minimum base premium requirement funding up to the mec, maximizing the cash value performance. This fear that some agents put, put out about not doing it that way, rather having a slightly higher base even though you're paying the same amount. So same example, 10k a year. Instead of a 1000 base, what if we set it to 3000 or 4000 base? So now you've got 70% or 60% of your money going to cash and then the other 30, 40% is going to the base base premium because that's quote unquote safer and won't cause a mech. Can you kind of crack open some of those fears that a lot of clients and even agents watching that may be afraid to even do the design because they're worried that the policy could become a mech and that's the last thing they want their client base to face when they're in their 70s and 80s.

Yeah. So I think that there's no need to have a concern about that at all. The corporate design, like what we did for corporations and they've been doing this since the early 90s, since the one year term riders came out after the MEC laws came out, is just minimizing the base premium and stuffing the paid up additions rider. The, the MECH fear. I mean that I, I've gotten some agents that have talked about that, like yeah, it's not really a big deal. You can stress test a policy to make sure it doesn't mec and you can stress test it long term. There are tests that insurance companies can provide you with where you can run a reduced dividend, just the guarantees like if the dividends come down, like that's really the concern that you've got to be aware of when you're Looking at the MEC test where if an illustration says it's not going to MEC or I'm going to max fund it like a 1090 split for 30 or 40 years or something like that, if the dividend comes down, that means the cash value will be less. Yes, but then the death benefit will also be a bit less. And the death benefit has a direct relationship to that 7 pay test, which is our MEC test. So that's where I could run into trouble. The dividend goes up like it's, it's almost the opposite effect that you'll see that it has. So yeah, if you want to stress test a policy, you can just run it with a conservative dividend or just the guarantees, like that's a safe bet you can do there. But if, if you ever did run into a Mexican, which is like we probably get Mex once a week at our office, clients that do it by accident, it is the easiest thing to reverse. We've never had one permanently stay in force. We get notified the next day, even if it's during the weekend. I get a notification, so does my client relations team. We reach out to the client that day or the following day and say, hey, your policy became a mec. Looks like you accidentally contributed too much money. Or it looks like you accidentally removed the term rider in your online portal. If you don't want this to occur, we just need an email from you stating that you don't want a MEC and the insurance company will reverse the transaction and refund any money that you've paid over the MEC limit. We draft the email for them and then they can just copy and paste it because it's got to come from their email. Then we send it to the insurance company and that's it. Like that. That's it. That's it. To prevent a MEC, if somebody planned on paying 10 grand per year for 50 years and after 30 years, let's say the dividends do come down and that MEC limit is no longer 10k, it's 8 grand, then you have to reduce the contribution to 8k, your total premium PUA contribution instead of 10k. And if you said, ah, that's really going to mess everything up, then you can start out by setting your mec limit at 12 or 15k. You can over inflate it a bit because unused MEC space rolls over year to year which can bank on those rollover dollars. Yeah. To continue to pay the dollar amount that you'd like. So there's so many things you can do. Yeah, like when I hear that, that argument as far as hey, if you fund too close to the MEC limit or go too high on the term, that can become expensive. It's a variable cost. Like yeah, it can go up but it's still a thousand times cheaper than putting the base premium high. Like put just simple math, look at it. And if it gets too expensive you literally can just reduce the term or cut it off after the seventh year. Like there's so many levers you can.

Pull and pull and it's all based on how did the client fund it over the years and what's more likely to happen if we look at the vast majority Americans take away big corporations, ultra high net worth people, high performance, high income people that are going to stick to the numbers that they set out. Those are not going to be issues. Yeah, talking about vast majority Americans that have never saved before in their life or if they did, they never were consistent. And now through coaching and accountability and education like this, they're changing their life around. They're wanting to make improvements. But even then when you try to make improvements, change your life, what does hap. What, what happens? Life happens. So things happen. And then you're one year, you're not able to do 10k. Well instead of having such a high obligation of a high premium that you have to keep on funding each year, now you only got that low premium requirement and you have the same ability to do the same number of say 10,000 and you've got rollover credits, rollover dollars year over year. That doesn't exist with every insurance company though, just to be, you know, clear. There's some, there's some catch up contribution rules that exist with the different companies. With Guardian Mass, I've never had an issue. But take a company like Lafayette for example has a 25% makeup contribution of based on the PUAS. Yeah, right. And that's year over year. So if I was only, if I was doing 10k and I do 5k in year two, I go to year three, I don't catch up that 5k, I'll lose it in year two, I won't be able to make up for it after two years. So I kind of lose that space. And then if I was in year three and I've got 5k of space, I can only do 25% of the, of the PUA amount. So it's a lesser dollar. I can't really get all the money in. So that can, you know, maybe that can be an issue with Another insurance company as it relates to, you know, MEC laws, MEC rules. But if we're just looking at guardian, as long as you've got that OIT during your funding years that you're desiring, that means you're maintaining that ability. And as long as you initially designed a policy where you've got a combination of scheduled and unscheduled, then the client can make unscheduled PUAs whenever they want within that 12 month period in that year and even after through makeup contributions if they don't catch up. As long as you kept that oit. And would you say that in this example? 10,000 year two. I do five year three since I didn't get the growth of the full 10,000 in year two. Is my oyt insurance more expensive now in year three?

A little bit, yeah. I mean it could be three bucks, could be 200 bucks depending on the size of the policy. It's so minimal that it. I've never seen a case where it makes sense to go with a higher base premium instead of that minimum and the term cost. Yeah. And we've had cases, I'm sorry.

And if you have a client that's not meeting the expectation of the 10,000 and it's been seven years and they've never done 10, and they've only done 3, 4, 5, 6, then it's, then it's a matter of, yeah, maybe we should cut this term a little bit down.

We've done that.

Because you're not actually committing to that. And would you say under that circumstance maybe a MEC could occur?

Yeah, so good question. So very easy to prevent a MEC there. We've had that happen numerous times or people may have been a little overzealous. I want to be able to put in 100k per year. They paid in a maximum of 30 or 40k per year for whatever reason. Right. Even if they had the means. Right. But it's okay. Like it happens to us all in, in one area of life or another. But we look at it every six months. So service is a big thing. Like we'll reach out to our clients every six months, have review calls and review meetings as needed or whenever they want. But if we see a case like that where they're underfunding it, what you can do is just reduce the death benefit. Can you reduce the base premium? Reduce the term rider? We've done this on a number of occasions. When you reduce that term rider, the cost comes down, down as well. The only thing that you want to Be aware of with that is when you reduce the total death benefit, it is going to reduce the MEC limit. The thing is, you see exactly what it's going to be before you do it. We do it in the software. We'll run a new illustration and enforce. Companies will also say, here's the minimum death benefit you can have before it triggers a mec. So you do all that, you show the cost, you explain it to the client so they know exactly what they can and cannot do. And it's like, that's it, it's fixed again. It does take time to learn. I call it the rules of the game via the software. Like this is one example with Guardian. We've done that with Mass before. All companies have different rules as far as what you can and cannot do. So it does take some time just to be aware of that and then know how to articulate that to a client. Because you can't just do it or say, oh, we're going to do this. If they don't understand it, they get frustrated and say, that's not what I wanted. So you got to know how to communicate it properly too. So I might say, yeah, you know what, I'm talking too fast. I won't get into the. Exactly what I would say. But we would communicate it properly too because it's important. Like it's people's money that you're dealing with. So very easy to fix, to kind of loop this. When we hear that argument as far as, oh, a low base premium will make or the term rider gets too expensive, you know, I'm like, well, yeah, if you buy a car, never change the oil, it's going to blow up. Like it's going to not work. So what do you do to prevent that? Contain it. Yeah, that's it. It's the exact same thing. Yeah, like the exact same thing.

Absolutely. Hey, Steve, this has been wonderful. What a masterclass today. I'd like for you to real quick just share my audience where they can find you and just mention that book again when you plan on releasing that. So we can have that in the, in the links below. I'll have that on my website for people to view and they can check that out and.

Yeah.

And anything else that you'd like to share before we close out.

I appreciate that so much. Yeah. First and foremost, thanks just for having me on again. Like, even when I go back to like focusing on one thing, like I'll always hop on these calls with you. I absolutely love it. So I appreciate just, just the relationship and working with you all these years, it's been an absolute blast. You can find us ibcglobalinc.com that is our main website right now. If you go there, you'll see a lot of lessons around whole life insurance, retirement strategies, what banks and corporations do. And we've been working on a lot of very eloquent guides that go over exactly what to do and what not to do. If you go into our knowledge vault, just ask for like your name, phone and email. That's how you get access to all of those. We're always updating that along with the lessons that we have in there, which they're video lessons short and long and we're always adding to it, but that's how you can find us. Also our YouTube channel, obviously. That's a great way to find us. And yeah, regarding the book that should be coming out soon, within the next few months. I'll definitely share some info with you as it gets closer and closer. I'm not sure if we'll do any kind of launch or, or just a soft launch with clients first, but yeah, I'm excited because been working on this thing forever and we wanted it right and I feel like it's right. Like I don't want to just put junk out there. It's got to be good. Yeah. Awesome. Yeah.

Hey, thank you for your time today and those of you that already have policies with us. Thank you for your service, thank you for your business and those of you that are looking to put a policy in place, looking to put a whole life or a convertible term, maybe an annuity to reach out to Steve's team, I have links below in the, in the comments section, in the description below, even on my website all around. Can't miss it. And I want to thank you for taking the time to improve yourself, especially those who are agents. I now start. I'm starting to have quite a few clients that have stepped into the world of becoming an insurance agent. Their aspiring agent, they're taking their, their tests. I even have my mom who is in the process of getting licensed as well. So she'll be taking the test soon. So pray all goes well, she passes and she'll be licensed and serving folks as well. So it's a wonderful industry to get into. There's a whole lot to learn and you truly do change people's lives and you get to be a part of creating generational wealth for other families. So that's something you want to do. I can help you on that journey as well. And Steve is a, is a tremendous resource just to, you know, reach out and ask him questions. And he's got a training as well, and so he's doing a lot of things. So we always, I always thank you for being here and we'll do more. We'll have more sessions just like this and go from there. Well, thank you all. God bless. Have a wonderful day and we'll talk soon. Bye now.

Thank you, my friend. Talk to you soon.