The Bank On Yourself No-Nonsense Guide to Life Insurance

Life insurance is a subject we don’t like to think about. It’s right up there with going to the dentist and writing the annual Christmas letter. (Do people still even do that?)

Thinking about life insurance is one more reminder that we may not live forever. Ugh.

But not going to the dentist doesn’t make things better. And not thinking about life insurance won’t help you live longer.

On the other hand, going to the dentist and thinking about life insurance are two really positive things you can do that are almost guaranteed to make your life better.

If peace of mind, a sense of security, and the knowledge that you’re doing all you can for your family and yourself are important to you, then it’s wise to spend a little time thinking about life insurance.

But life insurance doesn’t have to be complicated or boring—which is why we created this Consumer-Friendly Guide to Life Insurance.

Here are some interesting facts about life insurance that we cover in our Guide. Did you know that …

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7 Reasons Why Banking On Yourself Makes Sense

Investing money is a difficult and confusing process for most.  While you want to earn the highest return possible, you worry that too much risk could result in a big loss.  There are Bank On Yourself growing coinagethousands of financial “experts” in the world, eager to impart advice and consultation, but how are you supposed to select the right one?

One option is Dividend-Paying Whole Life Insurance.  While not as publicized as a 401(k) or investing in the market, Whole Life Insurance is a viable, safe method for growing wealth while providing a safety net for your loved ones.

Please take a look at the answers to the FAQs below and consider if Dividend-Paying Whole Life Insurance through Bank On Yourself is an option for you.

FAQs:

1.  What is it Dividend Paying Whole Life Insurance?

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The Ultimate Wealth-Building and Retirement Strategy… Whether the Market Goes Up, Down or Sideways

Have you been disappointed by your 401(k), IRA or other retirement plan?  Conventional wisdom tells us these plans are the best way to save and invest for retirement. Yet following this advice has resulted in financial insecurity for most Americans.

Because of this, most baby boomers have been forced to postpone retirement an average of five years.1

I’m often asked how using the Bank On Yourself method to save for retirement compares to traditional plans, so I put together this short video that reveals seven reasons Bank On Yourself makes an excellent retirement plan alternative.

Click the play button in the video below and see how many of these seven advantages you’d like to have in your financial plan…

The Ultimate Wealth-Building and Retirement Strategy… Whether the Market Goes Up, Down or Sideways

Would you like to find out how big your nest-egg could grow – guaranteed – if you added Bank On Yourself to your financial plan? No two plans are alike – yours would be custom-tailored to your unique situation, goals and dreams. To find out what your bottom-line numbers would be, request a FREE, no-obligation Analysis today.
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If you’re wondering where you’ll find the money to fund your plan, keep in mind the Bank On Yourself Authorized Advisors are masters at helping people restructure their finances to free up money to fund a plan. Here are the eight most common places they look.

When you request your FREE Analysis, you’ll get a referral to one of only 200 advisors who have met the rigorous training and requirements to be a Bank On Yourself Authorized Advisor. They’ll show you why Bank On Yourself is the ultimate wealth-building and retirement strategy… whether the market goes up, down or sideways.

1.  Bankers Life and Casualty Center for a Secure Retirement, May 2011

Bank On Yourself Dividend Paying Life Insurance v Savings Account

We received dozens of insightful entries for our “Bank On Yourself vs. savings account” contest.  They confirmed – once again – that we have a whole bunch of very smart subscribers!

The contest even inspired one reader to write a poem!

I’ve been studying these topics full time for nearly a decade now, and even I learned some new things.  So, whether you use the Bank On Yourself method or not, or you consider yourself to be an expert or a novice at understanding money and finances, you should read this!

You will undoubtedly learn some things you didn’t already know!

There were so many great contest entries, it was really tough for our team to single out only the five best entries, and the winners of the iPod Touch, Amazon.com gift certificate and more are listed below.

The contest question was:  How is dividend-paying whole life insurance different from a savings account, besides the death benefit?

Our readers gave a dozen or so distinct, key differences between the two, and I’ll summarize a number of them in a moment.

However, I think one really critical advantage of a dividend-paying whole life policy wasn’t mentioned…

Many retirees today can’t stomach the volatility or unpredictability of investing in stocks and other traditional investments and were counting on their interest income from CD’s, money markets and savings accounts.
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Corporate accountant discovers Bank On Yourself… and now smiles when the market crashes

Derek Logan is the textbook “poster boy” for someone who did all the right things we were taught to do financially.  He’s been working since he had a newspaper route at age 10.  He diligently set his goals and used a budget system.  He maxed out his 401(k) and had his home paid off by the age of 45 – even though he and his wife moved 13 times in their first 21 years of marriage.  And he paid cash for major purchases.

But he still got blindsided several times by the totally unpredictable ups and downs of the stock market.

Derek Logan with his newborn granddaughter

Derek Logan with his newborn granddaughter

As a corporate accountant for more than 30 years, Derek realized he had set – and achieved – all of the goals he set for himself… except for the goal of being able to retire at a specific age with a specific amount of money.

Disheartened and frustrated because he was closing in on his hoped-for retirement age, but his retirement account had been decimated several times, he began to do a lot of soul searching.  He was willing to be open to other alternatives.

Fortunately, my best-selling book landed on his kitchen table as a Father’s Day gift… and the rest, as they say, is history.

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Bank On Yourself, A Strategy for Any Economy?

With so much uncertainty in the economy and the stock market, people have been asking us how the Bank On Yourself method will hold up under various economic scenarios.

So, I thought you may find it helpful to have the answers to these seven commonly asked questions…

Questions

  1. How safe is my money in a Bank On Yourself policy?
  2. What do the companies that offer Bank On Yourself-type policies invest in to protect and grow my money even in volatile times?
  3. How would a decline in the dollar affect this strategy?
  4. How will Bank On Yourself policies hold up if we have high inflation?
  5. How will Bank On Yourself be affected if deflation becomes a problem?
  6. Will I miss out if I put money in a Bank On Yourself policy and the stock market booms?
  7. What if I lose my job and can’t pay my premiums?

Here are the answers to these timely questions:

1. How safe is my money in a Bank On Yourself policy?

The companies recommended by Bank On Yourself Authorized Advisors are among the financially strongest life insurance groups in the world. They are, in essence, owned by the policy owners, which lets them focus on the long-term best interests of the policy owners, rather then the short-term demands of Wall Street.

They’ve paid dividends every single year for more than 100 years, including during the Great Depression.

Life insurance companies are strictly regulated and have four layers of protection:

    • They are audited regularly by the state insurance commissioner’s office (sometimes by dozens of states), to ensure they maintain sufficient reserves to pay future claims and are on solid financial ground
    • If a company gets into financial difficulty, the state insurance commissioners office can take over and run the company in the interests of policy holders – usually a failed insurer’s business is then taken over by another company
    • Most insurance companies are audited regularly by several independent rating companies
    • Additional policy owner protections may be available on a state-by-state basis
      • Over 90% of their portfolio is invested in investment-grade fixed-income assets
      • Less than 1% is invested in U.S. Treasury or other government debt
      • Their bond portfolios are well diversified across many industries and companies, with no investment representing more than 1% of assets
      • Due to their financial strength and reserves, they have the ability to hold on to any assets that may decline in value for many years until they recover
      • They had virtually no exposure to the risky investments that caused the market meltdown of 2008
      • They have NEVER missed paying an annual dividend to policyowners for more than 100 years, including during the Great Depression!
    • Bank On Yourself gives you an advantage over traditional investments, where you may not only lose the purchasing power of your money, you could also lose some or all of your hard-earned dollars, if the value of your investment tanks.
    • Bank On Yourself policies are designed to become more efficient every single year. The growth of both your cash value and the death benefit is guaranteed AND exponential, which in itself gives you some protection against inflation.
    • Your premium in a Bank On Yourself-type policy is fixed for life – it will never increase. So if inflation does become a factor, you’ll be paying premiums with ever cheaper dollars

2. What do the companies that offer Bank On Yourself-type policies invest in to protect and grow my money even in volatile times?

To find out what your bottom-line numbers and results could be with Bank On Yourself, request a free Analysis here

3. How would a decline in the dollar affect this strategy?

No one knows for sure what direction the dollar will go. The current economic environment can change any time, and it can turn on a dime, as it has in the past. We are a global economy, and the actions of other nations impact us, as well.

In an article from MoneyCentral when the dollar was taking a beating in 2009 (MSN.com, on October 13, 2009), it was reported that central banks in numerous Asian countries were “actively buying dollars to check its fall against their currencies.”

Why do you think they would do that?

The reason given is that their exporters “can’t handle a drop in profitability and competitiveness,” if the dollar drops too far. Their prosperity has been in part due to a strong dollar, and “they aren’t going to give up all that easily.”

And, as Bloomberg.com reported on August 24, 2011, “a weak dollar may be one of the bright spots in the U.S. economy, and it could be the gift that keeps giving.” The article spelled out several ways the U.S. benefits from a declining dollar.

The point being that it’s not a black-and-white issue and no one can accurately predict what will happen, except that it probably won’t be what you imagine.

Since you must “park” your money SOMEPLACE, you would be hard pressed to find a safer, more advantageous place to put your dollars – in good times or bad – than in a Bank On Yourself-type policy. These policies have survived and even thrived for over 160 years in virtually every economic situation imaginable!

If you still think you have a better solution than Bank On Yourself, why not test it out by taking the $100,000 Challenge? If you’re right, you could pocket an easy $100K.

4. How will Bank On Yourself policies hold up if we have high inflation?

The insurance companies recommended by Bank On Yourself Authorized Advisors have most of their assets in long-term investment-grade corporate bonds. When inflation drives up interest rates, bond interest rates typically increase, which can increase policy dividends as well. This is precisely what has happened during high inflation periods in the past.

In addition:

One value of having money in a policy is that you HAVE the money, it is guaranteed to continue to grow, and it will be available for you to use when you need or want it.declining dollar

(Note – I am referring to the mathematical definition of “exponential growth.”)

Compare that with the term insurance policies so many financial “gurus” recommend – your death benefit stays level, which means it loses real value every single year.

Example: If you buy a $250,000 20-year term policy at age forty, and inflation averages only 4% a year during that time, your policy would lose 56% of its value. Your family would get less than half of what you signed on for!

Plus, you have nothing at all to show for the premiums you paid, unless you happen to die during the term of the policy (and studies shows only 1% of term polices ever pay a claim).
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Would you like to see what “guaranteed, exponential growth” would look like if you added a custom-tailored Bank On Yourself policy to your financial plan? Simply request a free, no-obligation Analysis to find out.

5. How will Bank On Yourself be affected if deflation becomes a problem?

In a deflationary environment, income is king. So, investors would be struggling to find safe, dependable sources of income. Which means top-quality bonds which provide that income – and which make up a major portion of an insurers portfolio – would boom.shrinking dollars

Bonds do well in a deflationary environment because as interest rates decline, the higher interest being credited on existing bonds become more valuable. The companies used by Bank On Yourself Authorized Advisors are some of the financially strongest life insurance groups in the world.

They have the reserves to be able to hold bonds until maturity, if necessary. So (older) bonds with a higher interest rate help offset (new) bonds that may be purchased at a lower interest rate.

Key Point: It’s important to remember that the guaranteed cash values will continue to grow – and the growth gets better every year, and there’s nothing you can do about it!

6. Will I miss out if I put money in a Bank On Yourself policy and the stock market booms?

If you crave the adrenalin rush you get from the volatile roller coaster ride of stocks and other investments, the safe and predictable growth of Bank On Yourself may bore you silly.

We live in an instant gratification society and some people are looking for a quick fix or magic bullet – they want something they can put under their pillow before they go to sleep at night and wake up rich in the morning.

Well, for most of us, it ain’t gonna’ happen. How many more investment bubbles have to burst before we (really) learn that lesson?

Take a look at this side-by side comparison of the growth in the stock market versus Bank On Yourself over the long-term:

The chart on the right, showing the growth in a typical Bank On Yourself–type policy, is based on the actual growth I’ve received in one of my own polices so far, along with the projected growth based on the current dividend scale.

Remember that dividends aren’t guaranteed, but the companies recommended by Bank On yourself Authorized Advisors have paid them every single year for more than 100 years.

Once credited to your plan, both your guaranteed annual increase and any dividends you received are locked in. They don’t vanish due to a market correction. Your principal is locked in, too.

hot investmentOn the other hand, the chart above of the Dow over the past 38 years reveals long periods during which the market went nowhere and then a lengthy period of extreme volatility. There’s also the fact that the market can (and does) tank when you least expect it, ruining your best laid plans for a secure financial future.

When you Bank On Yourself, there may be times when you feel “left out” – like when your friends start bragging about the killing they’re making in the latest “hot” investment that everyone’s jumping on – real estate, tech or oil stocks, commodities, currency, gold – you name it.

But Bank On Yourself is all about building a solid financial foundation and a secure future. You’re not going to see those thrilling spikes, but you’re also not going to have those unpredictable, heart-stopping losses that inevitably follow.

And that’s when you’ll thank your lucky stars for your Bank On Yourself plan

Besides, if an investment opportunity comes up that you want to take advantage of, you can do that by using equity from your Bank On Yourself policy. Chapters 7, 8 and 11 of my best-selling book are loaded with examples of people who did just that. And at least you’ll know you’ll get the same guaranteed annual increase and dividends on the money you borrowed, even if the “hot” investment doesn’t pan out.

Note: Not all companies offer a policy that has this feature, which is another reason to work with a Bank On Yourself Authorized Advisor who knows how to properly structure your plan for maximum growth and knows which companies offer the policies that maximize the power of this concept. You’ll get a referral to one of only 200 advisors in the U.S. who have met the rigorous requirements when you request a free Analysis.

Let’s take a closer look at the typical growth pattern of a Bank On Yourself-type policy. This chart is from one of my own policies, and shows the growth I’ve already received, plus the projected growth, based on the current dividend scale.

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No two policies are alike, because each is custom-tailored to the client’s unique situation and goals, so your growth curve will look different. But did you know that you can see what your growth would look like before you make a decision about whether to move forward? You’ll find out when you request a free Analysis here.
7. What if I lose my job and can’t pay my premiums?

The design of a Bank On Yourself-type policy gives you great flexibility. That’s because typically at least 50% of your premium will be directed into a “Paid Up Additions Rider” (PUAR), with the rest going towards your “base” premium. The PUAR is the little-known option that significantly turbo-charges the growth of your cash value. You could have up to 40 times more cash value, especially in the early years, when your policy includes this rider.

The kind of policies most financial “gurus” and advisors talk about grow much more slowly because they do not include this rider.

Because paying the premium that goes into your Paid Up Additions Rider is optional, in a pinch, you can cut back on or stop paying that premium. Some companies will even allow you to catch up on that premium later, as your financial situation improves.

You can also use your cash value and dividends to pay your base premium, when cash flow is tight.

However, in the first year or so, if you are unable to pay your base premium and you don’t have enough cash value to cover it, your policy could lapse, and you wouldn’t get back every dollar you put in.

Do you suffer from “paralysis by analysis”?

Paralysis by Analysis

I hear from people every day who tell me they want to add Bank On Yourself to their financial plan, but they haven’t quite been able to make the leap yet.

They worry about what direction the economy is going. They want to see what the political climate will be. They want to have some kind of certainty in an uncertain world.

You’ve probably heard of “The Serenity Prayer” and this excerpt from it, which seems particularly appropriate today:

serenity prayer quote

There are some things we simply can’t control. Not taking action is actually deciding to let chaos and uncertainty rule our lives.

There may never be a “perfect” time to take the steps that can enable you to take back control of your financial future.

Bank On Yourself is not a magic pill, as I’ve said many times. I don’t believe there are any magic pills.

But what I do know is that Bank On Yourself provides a long-term solution to a long-term problem. And the only regret expressed by most people who use it is that they didn’t know about it sooner.

If you haven’t already started to Bank On Yourself, request your free Analysis now – and start taking back control of your financial future today.

What If Suze Orman and Dave Ramsey Discussed Bank On Yourself?

It seems like every week now, someone writes us to let us know they forwarded one of my blog posts to Suze Orman and Dave Ramsey, or urged them to take me up on my standing offer to debate them about Bank On Yourself.

As I’ve said numerous times, I know Suze and Dave have helped many people get out of debt and get their financial act together.  However, there are two critical areas we strongly disagree on.

Neither of them has taken me up on the offer to debate me – yet. But I can’t help but wonder if they’ve ever actually checked into Bank On Yourself.

What would it be like to be a fly on the wall as Suze and Dave discuss Bank On Yourself? No need to wonder any longer, as our hidden video camera captured it all. Just click on the play button…

In case you’re wondering, the statements made by Suze and Dave in the video about why you should invest in mutual funds and why you should avoid whole life insurance are direct quotes from their books.

And Suze really did tell the New York Times she doesn’t follow her own advice about investing in the market.

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Six Frequently Asked Questions about Bank On Yourself

I thought you might find it helpful to have the answers to the six questions about Bank On Yourself FAQwe’re most often asked – right at your fingertips.

How many of these questions have you been wondering about?

FAQ #1: FAQ? How does Bank On Yourself compare with traditional investing and savings strategies?

You can compare the Bank On Yourself method to traditional investments here, including stocks and mutual funds, a 401(k), a ROTH plan, real estate, gold, commodities and several other investments.

If there’s a different financial product or strategy that you think can match or beat the Bank On Yourself method, I encourage you to take the $100,000 Challenge. If you’re right, you could pick up an easy $100K!

FAQ #2: FAQ? How does Bank On Yourself let you recapture every penny you pay for major purchases like cars, vacations, business equipment or a college education?

I’ve summarized this in a short video overview of how Bank On Yourself works.

However, for a more detailed explanation, you’ll want to review Chapters 2, 6, and pages 52-54 of my best-selling book, Bank On Yourself. If you don’t have the book, we offer a 35% discount on it.

FAQ #3:FAQ? I’ve heard people like Dave Ramsey and Suze Orman say whole life insurance is a lousy place to put your money. Is a Bank On Yourself-type policy different from the kind they’re talking about?Let's review the facts

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7 Really Scary Facts about Your 401(k)

Before you put another penny in a 401(k), find out what the government and your employer aren’t telling you that will scare the living daylights out of you! Here are seven frightening facts you should know about 401(k)s…

Frightening 401(k) Fact #1:

Your employer can – and probably is – making risky decisions on how to invest your money for you – without your knowledge or approval.

Watch Pamela Yellen being interviewed about the problems with 401(k)s on the #1 TV station in Los Angeles

Many employers are now automatically directing more of your pay into your 401(k)… and automatically moving it into more risky investments – even if you had previously chosen your own investments!

And most of that money is being re-directed into “target-date” funds, which lost so much money during the last market crash, it sparked scrutiny from lawmakers and regulators. Many funds for people who pinned their hopes on retiring in one year had losses far exceeding 20%, and some funds suffered losses of 32 to 41 percent, according to Morningstar.

Shockingly, stock allocations among those funds were found to be 26%-72% of assets!

Not to mention that the fees charged by target-date funds are “significantly higher than those charged by other funds on plans’ investment menus”.

(Source: “Companies take reins of workers’ 401k’s”, MoneyCentral.msn.com, October 10, 2009)

The growth in a Bank on Yourself policy is both guaranteed and exponential. You can predict the minimum guaranteed value of the plan on the day you want to tap into it, and every point along the way.

Frightening 401(k) Fact #2:

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The important decisions about your 401(k) are made by someone with no training or education in most companies.

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Pamela Yellen interviewed on Sky Radio

Sky Radio recently did a 3-minute interview with Pamela Yellen on Bank On Yourself, and why it’s a more dependable, worry-free approach to saving for the future than conventional methods.

The interview will play on all audio-equipped flights on Virgin America and US Airways early next year, but you can listen to a sneak preview of it here.Listen to the interview here

Pamela Yellen and Bank On Yourself will also be featured in January in a video series on “The Innovators” that will be broadcast in prime time on the CNN Airport Network in 44 of the busiest U.S. airports.

We’ll post a preview of that video here as soon as it’s ready.

Enjoy! And please tell us what you think…