Whole Life Insurance Instead of Banks (Canada)

Now, the problem is if you save money in a savings account and then you access money in the savings account, the balance drops. And if there is any kind of growth, the growth gets interrupted. So you're interrupting the compounding. So you're really working against yourself. The banking system is working against yourself. If you pay the money back, yeah, great. But you're the one doing all the work. It's like cutting grass with scissors. It's not really an effective strategy.

Hi there. Vern McCarty here, authorized infinite banking practitioner through the Nelson Nash Institute and a coach on the Ascendant Financial team. Today I'm going to be talking to you about whole life insurance instead of banks. I want you to see one of the most powerful debt weapons exposed. Okay? Oh, and by the way, I want you to click the link above me at the end of this video to make sure that you watch my friend Sarblo Gill show you the best way to finance a car or anything that you need to finance throughout your lifetime. Okay? So here we go. What I'm going to do today is I'm going to show you something really, really special. A lot of people, you know, they hear about this process of becoming a real banker, and they hear about this tool called whole life insurance, and they start to kind of collapse, the two of them together. It's really important to understand that the process of becoming your own banker actually has nothing to do with a life insurance policy at all. All right? The process of banking is all about a process called banking. To become your banker, you're just going to capitalize some kind of tool. And that tool could be a shoebox or a savings account, it doesn't matter. You're going to be basically saving money. And then when you access money out of the tool to accomplish an objective, you have to make an agreement with yourself to pay the money back plus interest, the interest that otherwise would have went to somebody else. Now, the problem is if you save money in a savings account and then you access money in the savings account, the balance drops. And if there is any kind of growth, the growth gets interrupted. So you're interrupting the compounding. So you're really working against yourself. The banking system is working against yourself. If you pay the money back, yeah, great. But you're the one doing all the work. It's like cutting grass with scissors. It's not really an effective strategy or scissors are not effective tool to accomplish the objective to cut the grass. So we want to maybe have a push mower, something with some gas or maybe a ride on mower to get that objective accomplished much sooner. Well, that is the tool that is the whole life policy. So what I'm going to do today is I'm going to show you an actual snapshot of a real policy that and how it kind of grows, how it works and so that you can kind of understand the tool a little bit better. But more importantly, how do we actually use the tool to achieve the objectives that we want to achieve? All right, so here we go. A couple of things that I want to point out right out of the gate here you happen to. You can see that this policy is with a company called Canada Life. The company doesn't really matter that much. I'm just showing you this example. I have policies with Canada Life. I have policies with a company called Equitable Life of Canada. I'm not here to do a commercial for any one life insurance company. Heck, I even own policies with Manulife. But Nelson taught us, wherever possible, we want to do business with something called a mutual insurance company. So that's something that you can look up or learn about or if you read Nelson's book or get in touch with one of our coaches on our team, we can help you understand better the type of tools that we use and the companies that we use. But there's really two types of companies. There's a mutual company and a stock company. Both of them have the same contractual guarantees. It just means that the mutual company is actually owned mutually by the participating policyholders and the stock company actually has shareholders and has participating policyholders. I still get to participate in the divisible profit every year that's generated by the participating account. But I'm not a true co owner in the business. So no knock against Canada Life at all. They're a great company. They've been around, I think the longest out of any company in Canada offering whole life insurance. And they have a great track record. They've been paying dividends every single year for the last 172 years straight. And I don't see them slowing down anytime soon. So this policy is fantastic. And I wouldn't worry about the company too, too much. This is just an example. Okay. One of the caveat that first. Now again, keep in mind, this is just an example. Everything that I show you right here is just showing you a snapshot of what is possible. Doesn't mean that it's going to look exactly the same for you. All the numbers are going to be different. Every situation, every policy, everything's a case by case scenario. But I'M just giving you an example of what's possible and showing you why myself and my teammates and the people that we coach choose to store our capital into these policy systems rather than in the commercial bank. I'm going to show you what's happening here. Okay, you ready? So first things first, I've redacted all the information. You can't see any of the information about the policy owner or the lives insured or the policy number. But I'm just going to show you here that you can see. This policy was issued on.

August 20th of 2018. And this policy value statement that you can see is as of October 1, 2021. So there's a little bit of momentum being created. A milestone just got hit, the third year anniversary, and the policy's in its fourth year. Okay. Now, of course I'm not going to go through all the beneficiary info and whatnot, but you can certainly set up beneficiaries in the way that works best for you and your family. But I'm going to show you this policy just happens to be approximately a total of $10,000 per year. That's the maximum amount that can go in this policy. We have policies that start as little as $1,000 a year and we have people that are putting hundreds of thousands, if not millions of dollars. Like the largest policies are large, large policies. But you don't need to have millions of dollars to get started on the process of becoming your own banker. You just have to get started. You have to work with a really good coach, find out your specific objectives, look at how you're structured financially, and then build the system based on your needs and where you're at. And you can always add more policies. I have nine policies today in our family system and I actually just applied for my 10th today. So it's a really big day for me. I'm pretty excited. Fingers crossed that we get approved. Now what I want to do is quickly break down the premium. See, there's always going to be a minimum premium in these policies. So we build flexibility into them right away. They have to be structured a very specific way for the process of banking. So I have a minimum premium here and then, then I have additional premium that I can choose to put in which equals our maximum premium. And I'm going to show you what these premiums are doing and how we can use the policy. Okay, so first things first, let's just focus.

On this minimum or what's, what's called the required premium or the base. There's many different names for it. Well, what that's doing in this example, again, the death benefits all going to be different. When you see face amount, that means death benefit. That means this person pays one month or one year's premium. This is annualized, but they pay one annual premium. God forbid the life insured becomes an angel. There's going to be a lot more coming out of the policy than what they put in. Is that fair? That's right. So 250,000 is guaranteed to go to the family to make sure that they never have a bad financial day as long as the life insured's around or after they're gone. So that's the base premium. Now you might have one thing that's really important to know is that there's guaranteed cash value growing toward this total every single day such that the total cash value in the policy grows to match the total death benefit by the time the life Insured reaches age 100. Has nothing to do with rates of return, nothing to do with the stock market or the economy or anything. It has to do with a legally binding contract that you own and you control. And the insurance company is on the hook to make sure that they can produce the cash to make sure the cash value and death benefit match. Okay? So we structure the policies such that the death benefit is going to grow. Imagine for a moment if all you ever did was put this base premium in. Well, you're a participating policyholder. That's what that means. That means you get to share in the divisible profit every year in the form of dividends. Well, your choice is more important than anything the insurance company is going to do. In other words, you can take those dividends and you can take them out in cash. You can use them to reduce your premium, you can hold them on deposit with the insurance company, or you can roll them right back into the policy to purchase something called paid up additions. That's paid up additional death benefit. So over time, this death benefit is actually going to grow. Okay? There's going to be these little blocks of paid up additions. Paid up additional death benefit. So that means there's more and more death benefit growing in the policy. And guess what? Every chunk of new death benefit that gets credited to the policy has the same contractual guarantee. Cash value and death benefit have to match. So the cash value is always chasing that death benefit. So I'm going to show you exactly what I mean here. Now remember we talked about this additional deposit, the additional premium down here. So I'm pointing this out here. There's the wealth policy. I want to show you this. The wealth is important. Okay, there's estate style policies, there's wealth style policies. There's nothing wrong with either one. They just solve a different objective. Wealth style policies just mean that they are, excuse me, growing and accumulating cash immediately from day one. So we want to grow the cash from day one so that we can start accessing cash sooner to start banking. Start implementing the process right away. Now, you can see they call this additional deposit option. Well, that means that it's an additional deposit. Deposit's an asset, not a liability, and it's an option. That means it's completely up to you, the policy owner. If you put it in. Now, you can see that the premium here is almost $10,000. So the total amount that's been deposited so far is approximately, not exactly, but approximately $40,0002-018201-92020 and 2021. That's how much premium has been deposited into the policy. So that means that this is the same number here as down here. Okay, so that means that this has been deposited four times. Okay, I'm going to show you exactly what's happening. First things first, if we look at policy values, okay, you can see here, it says total death benefit. Well, look at the total death benefit. 350,000. Almost 353. It's a lot bigger than that one, isn't it? You bet. So the death benefit is growing. Well, the death benefit growing is good because we know the cash value and death benefit have to match. Now, this policy has received dividends in 2018, or, excuse me, 2019, 2020 and 2021. You can't see the actual dividend value, but what you can see is the cash value that's been produced from the dividend. So dividends are accredited to the policy. Okay.

And those dividends are used. Here's the paid up additions I was referring to. Do you see the three dividends that have been received so far have purchased $20,176,019 of new death benefit on the life insured's life. And.

This cash value right here is growing every day such that it totals that number by age 100. So every year that goes by this dividend, excuse me, the paid up additions here is going to keep rising. Well, this cash is going to keep creating momentum so that it catches that number by age 100. So the more we capitalize the policy, the more dividends we receive, the more death benefit that grows, the more cash it produces. Well, that all sounds pretty Good. So the question is, Vern, what happens if we put more money in? That is the additional deposit option. Again, this is just an example of what Canada Life calls their additional deposits. Additional Deposit option. I need to caveat this, that it's really important that you work with a good coach. Don't call Canada Life up and say, hey, I want an infinite banking policy. You got to read Nelson Nash's book. You got to make sure that you learn about the process and you work with a good coach, so you have good guidance. I'm just helping you understand how the tool works and showing you how we use it for the process of banking. Okay, so whatever you do, don't try to do this on your own. Okay, so we deposit this money into the policy. And you can see here, it actually does exactly the same thing as what the dividend does. So, for example, you see this says ado. That stands for Additional Deposit Option. Well, this is Additional Deposit Option Paid Up Additions. So this amount has been deposited four times, and it's purchased on this person's life. $111,422.82 of new death benefit on that person's life. So there's a lot more cash coming out of the policy than what was put in. God forbid they become an angel. And then you can see the ADO cash value is 21,482 and 93 cents. And guess what that number does every day? It goes up. So that's pretty good as far as I'm concerned. I mean, there's not very many guarantees in life anymore. And if I can grow my cash every single day, I'm pretty interested in that. Now, we have a general idea of how the policy works. So you might be wondering, Vern, if I add 20,000 and I had 111,000 to 250, I get closer to.

Like, I don't know, 381K. Is that right? Well, you're right. Well, let me show you what's happening here. If I go to this other side and you're wondering, why is that $353,000, then what's up with that? Well, let's find out. If you look at the policy loan, you see the policy loan there? 28,545 and some change. And then, look, if we borrow money from the insurance company, there's a little bit of interest that's going to accumulate on the loan. So if we add up this number and this number and we deduct it from.

Those numbers, we're going to get that number. So the death benefit that's showing is the net. The net death benefit. Okay? Because what's happening is we're borrowing against our cash value and the insurance company is putting a lien on the death benefit. So if the life insured passes away, they're going to wipe out that loan and then the rest of the money is going to flow to the family tax free. Pretty good. That's why we're in control of the repayment schedule. We own the contract and we're in total and absolute control. So there's a couple things I want to show you here. First things first. I have this principal loan because I own the. Well, in this example, we own the policy, so we are able to control the repayment schedule. Now this interest here, imagine if you pay interest to a commercial bank, that money is just leaving you today and it's working for that bank. But if I pay money to a company that I'm either a co owner in or I'm participating in the profits generated by the participating account, that interest is coming into that business to create more profit so they can share it with me and all the other policyholders. So I'm pumping money into a system that I'm benefiting from. Now the other thing that I want to point out is you'll see the maximum loan available here. Now the maximum loan is rising every single day because the cash value is rising every single day. So can you borrow money anywhere and be net positive, have cash that you can borrow or go go and access while you're even paying interest? So the interest is going up, but the cash value here that we can borrow against is going up by more than the interest. That's why it's really important to work with a good coach and get the policy structured correctly. Now the question is, if I pay back this interest and this policy loan balance, how much of this is going to show up here to reuse again?

Well, what if I told you it was all of it, including the interest? Would you object to putting more money into a system if you knew you could get every single penny out that you put in and more. Now, I may or may not have mentioned this earlier. Truth be told, I can't remember. But the process takes time to build up. You can see that I put more money in the policy or more money is going into the policy in the early years than what we have access to. But I'm not thinking about the deposit that I made. I'm thinking about what the policy can do if you purchase a vehicle for 40,000. You're not thinking about the 40,000 you spent on the vehicle. You're thinking about all the benefits from the vehicle. Right. So it's the same thing with your banking system. It takes time to build it up. Eventually there's going to be more cash in the policy than what you put in. But this is early on in the arrangement here. The momentum is just starting to pick up. But at the end of the day, what I'm concerned about, what I'm looking at is I'm looking at the inventory, the bank here. So now I want you to take a moment watching the video and I want you to do some math. Okay. I want you to add this number, $28,545.12. And I want you to add the interest up $105.72. And I want you to add up $12.43. That's the loan availability today. Because the reason why I'm asking you to add all that up is this. I'm going to show you that as time goes on and if the entire loan was paid back plus the interest, how much of that interest and the principal loan balance could you re access again? Did you add all that up? Did you come up with your number? I did the math. The number I came up with was 28,663 and 27 cents. If I go up to.

This date, like I mentioned earlier, October 1st. Right. What I'm going to do is I'm going to come to November 3rd. So you can see it's the November 3rd. So we went a little further in time. And if I scroll down, look at that. Came into a windfall of cash, paid back the entire loan. But look at the balance of the maximum loan availability.

Gosh. Let's go back to the other.

28,000. 6, 63. 28,983. Wow. In about a month. That's pretty good. So the cash value is going up every day on a schedule so that the cash value and death benefit match by age 100. That means that the family has access to more and more cash every single day that goes by. And take a look at that death benefit.

Remember, it was.

352, almost 353 because of the loan outstanding. But we paid back the loan. So look, there's more cash back in the. Or there's more cash in the policy. So the death benefit went back to where it was. Now if we look $28,983 the very next day, very next day.

$28,992 and the day after.

Every single day that the life insured takes air into their lungs, the cash just keeps on going up. So this is the most powerful debt crushing tool we can access. Money, pay off a debt, create momentum in the policy system, replace that cash and just keep on recycling it through. Just like you're recycling money in the commercial bank today. But you're not creating any momentum on the money in the commercial bank. So make sure you click that link above so you can find out how to go about car financing or financing. Anything else that you need. There'll be a link in the post description below so you can get your hands on a copy of Nelson Nash's book. And there's also some more resources right here. A big playlist that will help you learn more about the process of becoming a roan banker. The infant banking concept.