Richard Canfield explains how to borrow against whole life insurance cash value. You can access up to 90% without credit checks, and the cash value keeps growing even while you owe. A client borrowed $62k to pay off a truck loan and set up monthly payments to clear it in six years.
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The process is simple. It takes you from requesting the loan to setting up your repayment process, even using your mobile device.
The loan proceeds do not devalue the policy. That daily rise continues uninterrupted by the policy loan balance. Logic knocks on your door and says, "Hey, I got a question for you. How do policy loans work?" Ridiculously simple. All you need to do is request it. How do policy loans work? So when, when you have a dividend-paying whole life insurance contract, ideally with a reputable mutual insurance carrier, you have a policy loan provision where you can request a policy loan for up to 90%, 9-0%, of the ever-increasing cash value minus any existing loan balance that may be outstanding. And a policy loan is executed when a request is received by the policy owner. So the policy owner submits, I need a policy loan for X amount. The life insurance carrier processes the request, and there are no income verifications. There is no lengthy nosy credit application. The loan is not reported to TransUnion or to Equifax. The loan proceeds do not devalue the policy. The loan proceeds— there's a lien placed against the death benefit of the insurance contract. The cash value of the policy, which is not money, it is simply the net present value of the future payment of a death benefit, and that cash value is rising daily. That daily rise continues uninterrupted by the policy loan balance. Example: $100,000 in total cash value, a loan request is made for $90,000. The insurance company asks the policy owner 2 questions: Would you like us to mail you a check or directly deposit the funds into the account that we have on file? So how do policy loans work? Ridiculously simple. You get the proceeds, you look inside the insurance policy the very next day, the total cash value is higher than what it was the day that you received the loan proceeds. And the reason for that is ridiculously simple. Cash value is not money, it's the net present value of the future payment of a death benefit. The cash value is contractually guaranteed to match the total death benefit by age 100 of the life insured in Canada, age 121 of the life insured in America. And so every day that you're aging, if you're the life that is insured, your cash value is rising Every premium payment that you make increases your total death benefit. Every dividend that you roll right back into the policy to purchase paid-up additions at no additional cost increases your death benefit. And so when you understand the simplicity of ready access to capital on demand, on your terms, without reducing the asset's value, without triggering a taxable event Logic knocks on your door and says, hey, I got a question for you. How much of your capital do you not want residing here?
Look, we all think that we should be paying only your fair share in taxes. Just so happens, I think your fair share is lower than probably what you're paying now. Well, we talk a little bit about that in our book, Keep Taxes Away from Your Wealth. You can get a copy and access to the bonuses by going to keeptaxesaway.com. That's keeptaxesaway.com. Head on over there and pick up a copy today.
That was actually pretty good. I threw that logic thing in at the end.
I like to put that in there, but we'll do an animation of, of a character called Logic that comes and does that.
Maybe policy loans work ridiculously simple. All you need to do is request it.
Well, on your topic there, I'm going to make a shameless plug, of course, for Cash Follows the Leader. We wrote this book specifically to help people see and understand and even get a visual representation of that contractual element of cash value, which is not money, growing to equal the death benefit. And so it's a very simple thing. How does the policy grow? Well, it grows because of contract value that says the cash value must equal the death benefit at this period of time when, you know, when the contract reaches its, its maturity date. Now, I like to say, how do policy loans work? I say they work really well. They work great. You know, the next one here that's in the same alignment of that is how do you pay back the loans? And so I actually was with a client yesterday walking through this exact example. She was taking her first loan, young, young girl. She was there with the parents and she's in her early 20s. Great saver, done amazing job saving, bought a truck and she wanted to build up credit. So she spent the first year paying the regular banking institution for the purpose of building credit. So she had an intention., and now it was time to pay off the truck. Well, the truck payoff amount was around $40,000, but she had $62,000 available 'cause she's been really good at capitalizing her system. So we, I had her log in, she logged into the system, I walked her through all the things. She clicked the button, she requested the loan, got an email. She had to do a little DocuSign thing with the, this particular insurance company. And now sometime next week, Most likely, as long as she also had to send in an account for bank deposit, she didn't have her account set up. So that'll take an extra day or two to get lined up. Probably by next Friday, she'll have that money land in her account and she will go get a bank draft and pay off the other institution. Then we worked out the amortization chart so that she was going to print and sign and a commitment page that we have a template to make a loan commitment that she would sign and date. And her parents, because they were both there, will witness to hold her accountable to the repayment process. She's going to take the biweekly payment she was making the other institution. She's going to make that as a monthly payment and add another $25 to it because she doesn't mind, back to her system and repay it now over 6 years. It should be walked through the entire process from, from start to finish. That's how you pay loans back. She logs into her online banking. She sets up pre-postdated transactions of bill payments to her policy. She sends one email with a very clear and specific instruction. By the way, we have templates for that on exactly what she's going to do. So when the insurance company sees that money come in every month and it's a different person that works at the insurance company— Nelson has a definition called gophers in the back of the book. He explains what those people are. They're very nice people, by the way., and that person is gonna say, oh, transaction here for client for this policy. I see it's $700-some-odd. Oh, it happened again last month. Oh, there's an email here from a year ago. What to do with that money? Yep. We're gonna apply it to the policy loan. So the process is simple. It takes you from requesting the loan to setting up your repayment process, even using your mobile device. Maybe 10, 15 minutes, 25 minutes if you're doing it the first time and you fumble around a little bit or you have a crappy internet connection.
I see.
Go ahead, check out the next video down below. And if you want to make sure you get a copy of Don't Spread the Wealth, you can have family banking meetings that actually matter. Go to dontspreadwealth.com. dontspreadwealth.com.
