Why Some Whole Life Policies Build Cash Value Faster Than Others

High cash value life insurance. I think it's one of the most misunderstood phrases in the entire financial industry. People call us every week across the entire advisor team, every week, United States and Canada, we have teams both sides. I'm looking for high cash value life insurance. When you hear the words high cash value life insurance, what picture immediately pops into your mind? Similar to, uh, Ash, if you and I Walked into a custom home builder's office and said, I'd like to buy a high kitchen house. And the builder's like, well, do you mean a bigger kitchen, a gourmet kitchen, a chef's kitchen, an outdoor kitchen? The kitchen isn't the house, right? It's part of the design of the house. And cash value isn't the policy, high, medium, or low. It's one part of the design. And so here's what Ash and I are going to do. If you stay with us for this episode, I think that you'll never use the phrase high cash value life insurance the same way again. You'll understand, and Ash and I are going to jam on this. 2 policies from the exact same insurance company on the exact same person with the exact same annual premium, can produce dramatically different results. And you're going to understand what actually creates cash value, why policy design matters more than the company's marketing, and why the words high cash value describe an objective, not a product. And so let me ask you something, Ash. When you hear the words high cash value life insurance, now we're referencing dividend-paying whole life insurance. We're not describing universal life insurance of any design. We're describing dividend-paying whole life insurance. When you hear the words high cash value life insurance, what picture immediately pops into your mind? More cash?

Oh, absolutely. It has to be, right?

Okay. Faster growth?

Definitely faster growth. That's— yeah, I think that's kind of implied in the high cash value. Yeah.

Okay. And so, have you ever noticed that almost nobody calls You and says, Ash, can you help me design a policy that accomplishes my financial objectives?

I, I don't recall having one of those conversations yet. That's usually part of the— what I say when I'm having those conversations to the person. Yeah, right.

Well, what they'll say to you is, what is your best high cash value policy? That's like walking into a tailor and saying, can I buy your best suit? The tailor is going to ask you, Ash, For what occasion? Is it a wedding, funeral, a board meeting, a fishing trip? Like, the best suit depends on where you're going. So does the best policy. It depends on what you're trying to accomplish.

Isn't that good? Yeah, it's being implied by saying that, that there's gonna be a significant more growth or there's gonna be significant— there's gonna be something more of significance, probably cash, that you're gonna have access to over a shorter period of time. They're just using that as a grab, as a hook to bring you in so that you'll want to look at this. But the high cash value, that doesn't address why we're doing this in the first place.

All day long. And Nelson, again, the late R. Nelson Nash, who pioneered, developed the infinite banking concept, which he explains beautifully in his book titled Becoming Your Own Banker, If you don't have this in your wealth-building library, you have an opportunity. Nelson described 2 vehicles, very same assembly. They roll off the assembly line, one behind the other, 2 different owners. And we all know people who can get hundreds of thousands of miles off of a vehicle. And we all know people who couldn't get a couple dozen. Has nothing to do with the vehicle, has everything to do with the operator.

And behavior.

Thank you. So for me, what really enters my mind is what is it that you're really looking for? What are you really wanting to achieve? And what tool design is going to be best to help you achieve that? Whether it's, you know, look at any attribute, the minimum required premium, otherwise known as the base premium, the paid-up additions, or otherwise known as additional deposit option, accelerated deposit option, understanding that cash value Is not money. And I asked you, what's the first thing do you think comes to people's minds when they hear high cash value life insurance? More cash? More money?

Yep.

That's the first thing that comes to mind. It ain't money. Not a savings account. It's not an investment. It's not your premium. It's not your money growing. It's you paying to purchase a participating whole life insurance contract that develops according to the contractual design of the policy. The policy isn't trying to maximize cash value. It's trying to balance the guarantees and the liquidity and the death benefit, the dividends, the long-range performance, all the legally binding contractual promises. That's what it's doing. The operator's behavior is far more critical, far more critical. Do you remember the late R. Nelson Nash talking about that?

Absolutely.

And what did he mean by that?

He meant that you could have, going back to your car analogy, if I could, So, it's a great analogy because every vehicle shares a similar platform.

Right.

They've got tires. They've got a chassis, things of that nature. There are suspension components. There's an engine. So, they're all the same in that regard. But not every vehicle can get you to where you want to go based on what your needs and requirements are.

Precisely.

So, when Nelson talks about our behavior is most important because that tool, that vehicle that we're putting together, assembling for you to get to the place that you want to go. If you don't stick with the plan, stay on the road, or take the path that we've decided and planned out and use the tool appropriately, drive the vehicle appropriately, you can break that and get lost. And then, you can end up not getting to where you want to. So, your behavior is what drives once it's established and set up. Your behavior and how you do it and whether you're an honest banker or not That's what's going to determine how effective over time this is for you or how long your vehicle will last.

Yeah, very good points. And if you bring that back to policies, right? So there is no perfect policy.

That's right.

Right. There are only policies designed for the operator to accomplish very specific objectives. The operator being the policy owner. Some people need maximum death benefit. Some people need estate planning, business succession, charitable giving. Other prospective policyowners need early liquidity, being able to control how they finance the things that they need, ready access to capital, premium flexibility, right? Where they're maybe maximizing their accelerated deposit option and maximizing their flexibility. What problem are we solving? Because until we answer that, we can't intelligently design the policy or simply state, hey, we're going to engineer a high cash value life insurance policy. The life insurance carrier itself, it only receives so many premium dollars from premium payers, and they have to allocate those dollars. And what do they allocate it toward? You've got mortality costs, you've got policy expenses, guarantees, dividends, paid-up additions. Where we direct those dollars changes the entire outcome of the policy. And as policyowners, we co-own the life insurance company. And so naturally, if we apply some logic, if we know that we can contribute almost unlimited sums, we have ready access to capital on demand, on our terms, without reducing the asset's value because Cash value's not money. And we know that we can achieve all of this without triggering a taxable event. How much of our capital do we not want residing there? It's just a logical question because from that place, you can go and achieve all of the objectives that you have financially. And so, Ash, let me ask you this. So imagine that you're building a house and that the base The base policy is the foundation of that home. You never want a weak foundation, right?

Unless you want to rebuild the house later.

Okay. So once the foundation's poured, then how do we intelligently build the rest of the house?

Well, you have to build on top of that strong foundation.

That's paid-up additions.

Correct.

Right? And so that's one of the most, I think, powerful tools that we have to accelerate ownership inside the policy. Because you're immediately purchasing additional participating insurance. It immediately increases cash value. It immediately increases death benefit. Paid-up additions immediately begin participating in dividends. So yes, I mean, they're incredibly important, but there's still only one design element. I don't think Nelson ever sat around asking anything other than, How do I maximize control? Very, very powerful question. And if you understand the truth, which is that your money must always reside somewhere, what better place to have it reside than here?

Yeah. And when people start working with us, they start to realize that this is something that we work with them on an individual basis. This is custom to what they need to accomplish and what their goals are. It's not an off-the-shelf product. You're just like, oh yeah, this one looks like it'll fit you. That's not the only aspect that becomes somewhat standard is we're going to put in place protection for you, for your family, because that's just something that comes with a tool. So, that's standard. There's going to be some protection there. But outside of that, what your financial objectives are today, 3 years, 5 years, 10 years, Those are all going to be very different.

They evolve.

That's right.

They evolve. And if you're speaking to people that are looking at the tool before identifying what they want the tool to help them accomplish, well, they're going to be examining things like comparing internal rates of return, comparing life insurance companies, comparing dividend scale interest rates without asking, what will this policy be designed to accomplish? That's like comparing a pickup truck, a Ferrari, an ambulance, and a school bus, and then trying to argue over which one is best.

For what application?

It's, um, I, I shared, uh, in our previous Command Post, uh, episode that I own 78 dividend-paying whole life insurance policies. They're not all identical, and thank goodness they weren't solving identical problems. This, this happened over The course of— I'm entering my 19th year. And Ash, you just said it. You said your objectives are going to change. They will evolve over time. Some of the policies that we own in our family banking system were built for banking, estate planning, our kids, business, key people in those businesses, opportunities. That's all in the realm of intelligent design. And so what does high cash value actually mean? I think what it means is that the policy has been intentionally designed. Do you see where I'm going there, Ash?

Yeah, it's all about what is it, what is the objective? And how are we designing it to achieve that objective? So what you're saying to me about those 78 policies, Jason, is for some reason you weren't able to accomplish everything in one policy?

That's right. That's precisely right.

Yeah. And who talked about that?

Oh, thank you for asking me, Ash, because now I got to go to this place in Nelson's book titled Becoming Your Own Banker. And again, he just had this way of explaining things. So wonderfully, he mentions on page 38, top right of the page, after all, we are not attempting to accomplish all of the banking needs through the device of one policy. We will need a system of many policies in order to do the complete job. This is just a description. of the design for each policy to best accomplish the system. Just another sharp example of how remarkably brilliant he was. And, uh, he's, he's right, he's right next to me in every single meeting that I'm blessed to have. And, um, I miss him. I think about him every single day. You know, I've—

go ahead.

No, go ahead.

I was just going to say that, you know, this is also a book of life experience. Yeah.

Yeah.

You know, it's not— and if you just think about that for a second, like, for those that have had— have gone through and read the book and those that have the opportunity to, you know, you're going to see a lot about the human condition, human psychology in the front end of the book. And it's because when it comes down to it, our behavior is the most important part of this entire equation. And if we are not right with why we're doing this, if we don't understand the problem, then none of this is going to matter because we're not going to know what to do.

I would add to that. Here's what immediately comes up for me when I hear you say that. I've designed policies for young families, retirees, entrepreneurs, physicians, farmers, business owners, people who Had a few hundred dollars a month and people contributing hundreds of thousands of dollars a month. And here's what nearly practically absolutely every one of them had in common. They didn't need the same policy. They needed the same process. It's actually pretty good. Ash, I kind of like that. They needed someone who would first develop a very deep understanding of where they wanted to go and then design the policy or the system of policies to help them get there. That is why I believe one of the most dangerous questions a person can ask is, what is your best high cash value policy, because it's like asking an architect, what's your best blueprint that you have? The architect's answer should always be, tell me about the family that's going to live in this home. That's exactly how policy design should work. It should be architected.

Yeah. I completely agree. And that's why infinite banking is a process, not a product.

Expand on that.

It's understanding what we're trying to accomplish and putting the right discipline in place with the right education so that we can utilize the tool to accomplish what we set out to.

And what are we setting out to do as it relates to the Infinite Banking Concept?

We're setting out to control the banking function as it relates to the needs throughout the course of our life for the things that we're going to finance that we would otherwise be paying interest to somebody else's bank or lending institution and being able to keep more of what we're giving away. And at the end of the day, be the ones that make— get to make that decision as to how that process works.

Amen to that. You know, I think as we, as we wrap, you know, this second episode that we've recorded today, I want to leave you, the viewer, with one final thought. And I want to invite Ash to share his thoughts because in our prior episode, he had some really amazing things to share after we had finished the recording. But if you, much like I always say, if you remember nothing else from today's conversation, I would encourage you to remember that You know, high cash value isn't a product. It's the result of thoughtful design. And where does thoughtful design begin? It always begins with thoughtful questions, right? Not which company has the best high cash value policy, but rather, what am I trying to accomplish? And once you're crystal clear on the objectives that you have, a proficient practitioner can intelligently design the policy or the system of policies to achieve it. Nelson, he didn't spend the latter part of his life trying to help people accumulate cash value. He spent it trying to help people think differently. He challenged us to become better stewards of capital. And stewardship begins by recognizing one simple truth. Your money must reside somewhere. Someone or some organization must perform the function of banking as it relates to your needs, and that can and should be you. And so The question is, is your money residing in a place that is helping you to do that? And if consumers, like we have been, you and me, Ash included, we've been conditioned to shop for products. Stewards build systems. The consumer compares the policies, the stewards compare the outcomes. And those two approaches, they don't lead to the same destination. And so I think probably the funniest part about this entire conversation that we shared today is that somewhere out there right now, somebody is still typing into Google or GPT, what is the best high cash value life insurance? And so if that's you, first of all, we're genuinely glad that you found us. But after today's episode, we hope that you'll never Google that phrase the same way again and that you'll begin asking, how can someone, a good practitioner, help me design a policy that helps me become a better steward of my capital? Better questions lead to better decisions. That's really what I would say. In addition to subscribe to the channel so that Ash and I can continue to bring you great value. Ash, any closing thoughts?

Yeah. Just revolving around the questions that you want people that are watching or listening to kind of really sit and resonate with. Remember when you're asking yourself those questions, and I hope that you come to the same conclusion that I did, is one of those questions is short-term thinking and one of those questions is long-term thinking. And only one of those is going to put us in a better financial position for ourselves and all future generations that we leave behind. The other one is just focused on how can I get the win today but not the wins for the tomorrows.

Love that. And you mentioned something around control too that just clicked. You're either in control.

Oh yeah. Well, yeah, it's one of two things, right? Just like people are making the comparisons of life insurance and investments. which are not the same. It's when you come down to it, you're either in control or you're being controlled. There's no other option. Love that.

And so thank you for spending a part of your day with Ash and I. And until next time, keep asking better questions and keep thinking differently and keep becoming a better steward of your capital. And If your money still resides under your mattress, at least rotate it once in a while, because I think that your money deserves a better retirement plan than a box spring. But anyway, okay. We'll see you on the next edition of The CommandPost. This was fun. Thanks, Ash. Money flows. Once you begin to observe the pattern of flow, you start seeing something that most people miss. Money is always being stored somewhere and borrowed from somewhere. You've got car payments, credit card payments, loan payments. You're paying cash for things.