How to Create Your Own Personal Tax Free Bank in Canada

I can now actually go in and access policy values via policy loan. And the life insurance company is actually contractually obligated to loan me up to 90% of my total cash value, no questions asked. I actually own the contract, that is I'm the banker and the bank owner. So there's no income verification, no credit check, and more importantly, no repayment schedule.

In this video, Warren and me are going to discuss the attributes of participating dividend paying whole life policy, which is the tool that we use to implement the process of becoming a banker. So Warren, let's dive into understanding participating dividend paying whole life policy.

Okay, thanks so much, Sarblo. Yeah, so as you said, the dividend paying participating whole life policy is the tool that we use to implement the process of becoming your own banker. But there's specific reasons why we use the tool. The first thing is ownership. It's actually a legally binding contract that we own that I own or that Sarblo owns, or that you would own if the policy was on your life, if you're the owner. So I own the policy contract. That means that I am in total and absolute control. And when we place the policy with a mutual company, that actually puts us in a position to be a co owner with the insurance company. So we get to participate in the divisible profit every year in the form of a dividend with the insurance company. Much like shareholders of a bank at the participate in profit with the bank when we're pumping money into the commercial banking system.

Which is awesome. So Warren, so the word participating in participating dividend paying whole life means that anybody, by virtue of them owning this policy, they participate in the divisible profit generated by the insurance company. That's what the participating means. That's right. And the word dividend means those profits are distributed to policy owners via dividend.

Right, Right.

So that's where we get participating dividend paying. Now what does whole life mean?

Whole life. Oh, this is my favorite part. And I'll just. What I'll do, Sarbal, is just compare that to what most people have heard of and that's something called term life insurance. So a term life insurance policy is going to cover you for a specific term. Whole life policy is also going to cover you for a specific term called your whole life. So the policy is actually going to stay with you for your entire lifetime.

So it's going to be with you till the end of time. Now what about the premiums? Now in a participating different ping whole life policy, now you're going to hear Us use that word many, many times. Participating, differenting, whole life. Say that three times. But because repetition is going to be the best practice today, right? To learn. So when you are putting money into this policy, so varun, who determines what to put the money in, what the premium should be?

Yeah, great question, Sarblo. Yeah, I'm actually the one who gets to determine what the premium is going to be. So based on my objectives or whatever kind of goals that I have that I want to accomplish, or how much cash flow I have, or maybe I have some savings built up in someone else's warehouse, maybe I want to store that money in my own warehouse, which is the participating dividend paying whole life policy. I actually get to set the terms. I get to determine how much premium I want to put in.

Perfect. Now, once we know what that premium is, which is our deposit into our own banking system, because this is the tool that we use to implement the process called becoming a banker, we take that premium and we use it to strategize or to engineer the policy. Now, the policy is designed based on very specific financial goals. And life insurance may be one of those goals because nobody has a decent life. We want to make sure that we protect our family in the event of something happening to us. So in addition to that, how do we factor in the design? What specific things that we look at in terms of designing the policy?

Yeah, so some specific things that we would look at. Obviously. Again, we're going to look at how that person, that client or prospect is structured financially today. So we're going to look at their income, we're going to look at their assets, we're going to look at their liabilities. And again, you already mentioned their specific objectives. You know, a lot of people want to pay off debt. And I actually did a video on how to use the policy system to pay off debt just the other day. So if you want to actually have an expanded conversation and get more information on how do we use the system to pay off debt, I would just go ahead and click the link above and that will take you to a discussion that I posted on our channel just recently. Anyhow, a lot of people are going to use the system to again accomplish objectives that they're already using their own money to accomplish today. But we're going to recycle that money through our own policy system. So again, that might be paying off debt that might be saving potentially for passive income time or retirement. Again, you mentioned maybe they have a death benefit objective. So this is such a great tool because we can accomplish many, many objectives with the same dollar. Right. Just by starting the system, the system can help us accomplish multiple objectives.

Absolutely. So Warren, just want to expand on what you just shared. So again, what we are designing the policy is for the use of policy today while you're alive. What are your goals? What are the things that you need in life for which money is required? And we work backwards on constructing this policy so that you get to implement the process called becoming your own banker using this tool. And then you get to use this tool to finance those things that you need in life, which can be many things. It could be cars, it could be vacation, it could be kids education, it could be passive income, it could be paying off debt, whatever your goals are now. So that's the discussion that we have now. Warren, can you also expand on some of the attributes in a participating dividend paying whole life policy from.

The vantage point of growth and protection and control?

Growth, protection and control. And one thing I just want to point out that you had mentioned, you said we're talking about how to use the policy system while you're alive. See, it's a wonderful tool. And the life insurance advisor, the life insurance company, all they ever focus on is the death benefit.

Yeah.

Where you have to die to win. So to your point, Sarblo, so growth, see death benefit, the policy is always going to start with a death benefit. And that might be 100,000, it might be a million. You know, we'll determine what that death benefit is going to be. But that's going to start up here. So I pay my premium. God forbid I become an angel today there's going to be a lot more money flowing tax free to my family than what I put into the policy. For starters, early, early on. Now there's actually something else in the policy called cash value. Now the cash value is contractually guaranteed to rise every single day as we age because the cash value must rise to match the death benefit by the time we reach age 100. So just for aging, I've got more cash on my policy today than I did the day before.

So every day we age, our cash in this policy keeps increasing because of the contractual guarantee by the insurance company which stipulates that by age 100, your cash values and the policy must match your death benefit. So again, going back to your example, if you start with a high, you're going to start with the death benefit. Every day you age, your cash values keep increasing every single day uninterrupted. The stock market manipulation cannot impact the Growth, taxes cannot impact it. Future pandemics, recessions, any of those things cannot impact the growth of the policy. The cash grows every day based on insurance companies contractual guarantee. So if you are warehousing money in an instrument like this, which grows in value every single day uninterrupted, how much of your own money do you want sitting in this tool, in this policy?

Oh my gosh, all of it.

All of it. And then you get to build that wealth and from there onwards you get to implement the process called becoming your.

Own banker, which is where access and control comes in. So now I'm accumulating this cash value in the policy and it's growing every day. And you said uninterrupted starblow. So I'm building up this cash in the policy. Remember I'm the owner of the contract. I can now actually go in and access policy values by a policy loan. And the life insurance company is actually contractually obligated to loan me up to 90% of my total cash value, no questions asked. I actually own the contract. That is I'm the banker and the bank owner. So there's no income verification, no credit check, and more importantly, no repayment schedule. So talking about control, now we're not saying not to pay back policy loans. It's really, really important that people understand this. It's all about banking. So if you borrowed money from a commercial bank, you better believe that you're going to be making a repayment and they're completely in control of that repayment schedule. So if I'm going to access money from my own bank, although I'm in control, I can ratchet my repayment up, I can ratchet it down. Maybe I put money into an investment deal and I'm not going to put loans back into my, or, excuse me, loan repayments back into my policy right away. I get to dictate those terms. But I am going to replenish my pool. I am going to pay back my loans so that I can go back and re access all that money and all of that uninterrupted growth and I can just keep recycling money through my own system rather than recycling it through the commercial banking system.

So many really good awesome nuggets, Warren. So let's just take a few nuggets. So first thing first is control. So as the cash builds up in the policy, as a policy owner you have control and you can access the money as and when you want. You can access money via a method called withdrawal. You can withdraw your cash values out but it will stop the growth of your own policy going forward. And the growth will stop because the policy owner made a decision of withdrawing the money.

That's right.

The other way we can access money is, which is exactly how we want to access money. Because if you value future value and money, we never want to interrupt the growth in the system. What we want to do is we want to access insurance companies money via a method called policy loan where we use our cash as collateral. So 90% of your cash values can be used as collateral to acquire pool of money from insurance company via loan and use that money to accomplish the objective. So things that you would otherwise borrow money from a bank or use your own cash to buy in this situation now we are using insurance companies money to buy those goods and services as our money in the policy continues to grow as if nothing happened. Because the loan on the policy does not interrupt your growth in the policy. It, it doesn't interrupt your growth in the death benefit in the policy. It doesn't interrupt your future dividend in the policy.

That's such a great breakdown, Sarval. That was really powerful. You said something earlier that I think was really important. You said, obviously I mentioned policy loans, but you said, oh, I could also withdraw the money, but that's a decision that I make now that's going to interrupt the growth. And we know that our behavior in this process is far more important than anything the life insurance company is going to do. Right. So I could make that decision, but then I'm just hurting myself. I may as well leverage that asset. The other thing, I really, I'd just like to point out that you said that we can access 90% of the cash value. The life insurance company's happy to lend us that money. And I just think it's interesting, 90% because I'm not saying not to invest in real estate or real estate's bad. But isn't it interesting that if you took your property to the bank and you wanted to get a home equity line of credit, all they're going to give you is approximately 65% loan to value on that.

You got to qualify for it and.

You got to qualify for it. So just think about that for a moment. How powerful of an asset that we're talking about here.

Now again, what we are describing is a process, not leverage. The process is called banking. And steps in banking are you deposit money, you've been a depositor in a bank. We deposit money into our policies as premium. The second step is to borrow money because the money that doesn't move, isn't worth anything. And as you borrow money to accomplish your objective, the third step in the process is to pay back the asset to the banker is the loan repayment. You are the banker. The biggest asset to you is that loan repayment. If you had no issue, just like how Warren mentioned borrowing money from a bank and pay the bank back, make sure that you replenish your pool of capital back on your terms. Because what it does is it puts more money back into your own system so that you can capitalize on more future opportunities that are going to come walking in. But you need to be disciplined about doing all that. The process called banking is what keeps the wealth in the family and gives you access to opportunities so you can create more wealth going forward for your family. Leverage in life will only take you up to a certain point and then it's going to collapse.

Yeah, well said, Starblow. Now you talked about the first step being deposits and the next step being borrowing and then making repayments. Now you're watching this video today and you're saying, oh, this wouldn't work for me because I use cash for all my purchases. Sarblo, what do we say to the cash user? What do we say to the person who finances using cash?

Well, it's interesting you bring that up for him because I just did a video on the three mindsets, not four three mindsets. The saver, the debtor and the wealth creator. So if you haven't had an opportunity to watch that video, make sure you watch that video on our YouTube channel where we talk about saving, borrowing as a debtor, saver, debtor and a wealth creator using the process of becoming a banker. I just finished that video.

Oh, well done. Well done. Yeah. So if you want to hear more, if you're a cash user, if you're a person who finances things using cash, you really want to check out Sarbo's video because you might be surprised to realize that no matter what, even if you're using cash or borrowing from someone else, you're always using borrowed money. It's all about how you think.

But just to summarize the characteristics behind participating different paying whole life policy. So again, by nature of you owning the policy, you participate in the profits, the profits comes to you as dividend. And the other attributes in this policy is your cash grows every single day uninterrupted with future pandemics, recessions, stock market manipulation. Those things don't impact the growth of your money. You get to access money from insurance company via loan while your money continues to grow in the policy. You get to use money, then you get to replenish the money on your terms. So it all speaks to building predictable growth in your family's wealth, having control on access to money, having control and replenishing the money and most importantly creating that protection via death benefit. Because nobody has a lease on life. We all have our best before dates. We just don't know what the date is. So Vern, what would be your closing notes on the video?

My closing notes on the video would be click the link on one of these sides so you can watch a webinar, an expanded discussion and so you can learn how to be or at least start the process of discovering how to become your own banker.

Yep. So learn how you can warehouse money in this tool and grow your wealth uninterrupted. And from this tool called Participating Whole Life Policy, implement the process of becoming a banker so that you can control that function in your life going forward.