How Complex Is Dividend-Paying Whole Life Insurance?

Some financial advisors say whole life insurance is complicated, and that “you should never invest in something you don’t understand.” … Then they try to sell you stocks, bonds, mutual funds, and EFTs that most laypeople can only begin to truly grasp!

Dividend-paying whole life insurance is so simple an average 10-year-old can understand the concept in 10 minutes. We’ll prove it to you now …

The Simplicity of Dividend-Paying Whole Life Insurance

The concept behind a dividend-paying whole life insurance policy is extremely simple. It’s based on five easy-to-understand ideas:

1. Your Risk Is Minimized by the “Pooled Risk” Approach of Insurance

This timeless concept is at the foundation of all forms of insurance. In its simplest form, policy owners pay an insurance company a relatively small sum of money in advance. This is called a “premium.” In exchange, they are covered for a potentially much large expense later. In this case, they receive an agreed-upon amount to cover the costs and loss of income related to the death of the insured, which is called the “death benefit.”

2. You’re Guaranteed to Have “Level-for-Life” Premiums with a Whole Life Insurance Policy

The insurance company realizes that there’s a slight chance that an insured individual might pass away after just one premium payment is paid.

That risk is very slim, but the flip side of the coin is that the older you get, the greater your chance of dying within the coming year. Nevertheless, a whole life insurance policy is designed to last your whole life – regardless of how long you live.

Term life insurance deals with this by raising the premium periodically to cover the company’s ever-increasing risk. This can ultimately make the policy so expensive that the policy owner is unable to pay for it, and all too often the coverage of a term life insurance policy ends without any death benefit being paid at all.

Many people have observed that paying the premium for a policy for years and then not receiving any benefit makes that term life insurance policy extremely expensive.

Whole life insurance takes a different approach. The insurance company knows how much premium it will need to receive for your policy, assuming you live an average lifetime, and it spreads that amount out evenly. Thus, your premiums are guaranteed never to go up.

And you don’t have to pay extra for this guarantee.

In fact, you will never receive a letter from the insurance company that issued your whole life insurance policy that says, “We are experiencing increased costs, and we will be passing those additional costs on to you. Your new (increased) costs will be …” That is guaranteed never to happen – at least not with a whole life insurance policy.

3. The Cash Value of Your Whole Life Insurance Policy Is Guaranteed to Grow with “Every-Year Consistency”

A portion of each whole life insurance premium payment is automatically credited to a savings component (called the “cash value”) of the policy. This cash value grows each year by a pre-set and guaranteed amount. Having access to this cash value – during your lifetime – is just one of the living benefits of your whole life insurance policy.

You will know the minimum guaranteed amount of your cash value account at any time in the future. These amounts (guaranteed in writing, by the way) are all listed in a chart your insurance advisor will give you before you decide to purchase the policy.

4. Dividends Give Your Whole Life Policy “Shot-in-the-Arm” Growth as They’re Paid

If the insurance company you purchase a policy from is owned by stockholders, then the stockholders receive the profits the company earns.

However, if your company is in essence owned by the policy owners (these companies are called participating or mutual companies), you share in the profits. The profits paid to you are called dividends.

Dividends are not guaranteed, but … some participating companies have paid dividends consistently every year for over 100 years – even during the Great Depression. These are the companies Bank On Yourself Authorized Advisors recommend.

Dividends are great! And even though they’re not guaranteed, every single Bank On Yourself-type life insurance policy ever written by a Bank On Yourself Authorized Advisor has paid dividends every year.

You could take those dividends in cash and spend them – and that makes perfect sense when you’re taking income from your Bank On Yourself-type life insurance policy in retirement.

But aside from that, savvy policy owners tell the insurance company to use the dividends to purchase additional coverage. (Hey, it’s more death benefit without a penny more out of your pocket!)

And when your death benefit grows, your cash value grows, too, in the most efficient way possible.

5. Whole Life Insurance Policies Are Chock Full of Guarantees to Protect You

A dividend-paying whole life insurance policy comes with guarantees that cover every component of the policy, except the payment of dividends (see above). And the insurance company is required by law to keep enough reserves on hand to back up those guarantees for every single whole life policy it issues.

  • Your coverage is guaranteed for life. It cannot be cancelled (as long as premiums are paid, of course. And remember, your premiums won’t go up!)
  • The company guarantees that the death benefit will never decrease
  • Your cash value is guaranteed to increase each year, and each year’s increase is “locked in.” It’s not subject in any way to market risk
  • If you need cash for any purpose, you are guaranteed the ability to borrow against your cash value, at competitive rates – and you can recapture that interest back into your policy as you pay back your loans. You don’t have to fill out a loan application, and your request cannot be turned down
  • You’ll have guaranteed income tax-deferred growth of your cash value every year, and you can take tax-free retirement income, under current tax law
  • The policy’s guaranteed death benefit will be paid income tax-free to the beneficiaries, under current tax law

All forms of life insurance have some guarantees, but only whole life insurance gives you all those guarantees

In addition, with a whole life insurance policy, the insurance company assumes the risk of poor investment performance. With every other form of permanent life insurance, you – the policy owner – assume that risk. And when you assume that risk, it means you’re agreeing that if the insurance company’s investments don’t pay off as well as planned – or if their costs are higher than they expected – you will make up your share of the difference – out of your own pocket!

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How to Find out More About Bank On Yourself-Type Dividend-Paying Whole Life Insurance Policies

Get Your FREE Report!

Get instant access to the FREE 18-page Special Report that reveals how super-charged dividend paying whole life insurance lets you bypass Wall Street, fire your banker, and take control of your financial future.

In this article, we’ve shown you the five simple concepts on which a dividend-paying whole life insurance policy is based. We’ve also reviewed the guarantees the insurance company makes to you when you decide to purchase a whole life insurance policy.

It’s really that simple. … Of course, if you’re someone who really wants to dig deeper, there is more you can learn. For example …

If you’d like to learn even more about dividend-paying whole life insurance, take a look at the comprehensive online Consumer Guide to Life Insurance. You’re welcome to browse. We prepared the Consumer Guide to Life Insurance just for inquisitive learners like you!

Learn How Super-Charged Dividend-Paying Whole Life Insurance Can Help You Reach Your Financial Goals and Dreams – Without Taking Any Unnecessary Risks

If you want to discover why Bank On Yourself-type policies outperform other types of whole life insurance policies, download our FREE Special Report, 5 Simple Steps to Bypass Wall Street, Beat the Banks at Their Own Game and Take Control of Your Financial Future.

While most term life insurance policies are relatively similar to one another, dividend-paying whole life insurance policies can be customized to meet very specific needs and objectives – your specific needs and objectives.

And that’s why your next step is to find out specifically what a Bank On Yourself-type whole life insurance policy can do for you and those you care about.

To learn how a custom-tailored Bank On Yourself program can help you reach your financial goals (there’s no cost or obligation), request your free Analysis. You’ll be referred to a Bank on Yourself Authorized Advisor – a life insurance agent with advanced training in this concept – who can answer all your questions and, when you’re ready, get things moving.

How Much Money Do You Need to Save for Retirement?

People need to save between 10% and 17% of their income if they plan to retire at 65 but are putting away only 6-8% of their income, according to a new study by the Stanford Center on Longevity. That’s only half of what they should be saving.

What percent of your household income are you saving? It’s important to be brutally honest with yourself because a shortfall of the magnitude most Americans will experience means more than just not being able to live the retirement lifestyle you dreamed of. It may mean…

  • Having to choose between putting food on the table and the medical care you need
  • Not being able to afford to pay for heating and air conditioning
  • Having to rely on the charity of your children
  • Foregoing travel and even life’s little luxuries

I doubt you worked hard all your life so that you can scrimp and sacrifice just to get by in retirement.

Fully 60% of U.S. households are at risk of not having enough money to make ends meet in retirementeven if they cut back to spending just 75% of pre-retirement levels – according to a 2018 study from the Center for Retirement Research.

The Rule of 25 for Determining How Much You’ll Need to Have Saved

[Read more…] “How Much Money Do You Need to Save for Retirement?”

Flat Earthers and Blind Faith Stock Market Bulls – What Do They Have in Common?

They are the ultimate conspiracy theories – the beliefs that the earth is flat and that economies are not cyclical.

The Flat Earth Society (a movement that is active and growing today) finds the notion of a horizontal earth far more plausible than a round planet perched on an axis. To their members, gravity is an illusion and objects are not pulled down, but rather continually accelerate upward.

Adopting this notion requires one to reject all prevailing scientific wisdom and research. And despite centuries of empirical evidence, some Flat Earthers believe that one could literally walk off the end of the world.

Those who think the current bull market will continue to rise without a crash or major correction are equally illogical. Despite generations of economic theory, Blind Faith Bulls have sunk most of their net worth into equities on the unquestioning belief that stocks will climb unabated.

Flat Earthers and Blind Faith Bulls Share a Common Suspension of Disbelief…

[Read more…] “Flat Earthers and Blind Faith Stock Market Bulls – What Do They Have in Common?”

Is Bank On Yourself a Scam? Read These Reviews and Decide for Yourself

Scam (noun): a dishonest or illegal plan or activity, especially one for making money

Bank On Yourself (proper noun): A wealth-generating system using dividend-paying whole life insurance policies with riders that supercharge the growth of the policies. These policies are protected by a multi-layer safety net, and the companies recommended for the Bank On Yourself concept are audited by regulators in all 50 states.

Through every economy imaginable, from the terrible Great Depression of the 1930s to the “boom days” of the 1990s, to the Great Recession of 2007 – 2010, the Bank On Yourself strategy has demonstrated unfailing success for well over 160 years.

Do “Bank On Yourself” and “scam” even belong in the same sentence? To read or listen to some self-appointed experts, yeah, they do belong in the same sentence. It’s difficult for the naysayers to recognize such traits as patience, discipline, and self-restraint – the very traits that are prized by those who use and benefit from the Bank On Yourself method of safe wealth-building.

The naysayers would rather say, “It sounds too good to be true, therefore it is too good to be true.” But if something is “too good to be true” just because it sounds “too good,” then what about radio and television, motion pictures, airplanes, and even ballpoint pens? At one time or another, every one of those sounded too good to be true.

When something sounds too good to be true, examine it carefully and thoughtfully. That’s much smarter than running away from it with a closed mind.

Why Do Some People Dismiss Bank On Yourself As a Scam?

[Read more…] “Is Bank On Yourself a Scam? Read These Reviews and Decide for Yourself”

More Reviews About Bank On Yourself Changing Lives!

The Bank On Yourself strategy is much more than just another way to save for retirement. Think about it: If you’re firing your banker, bypassing Wall Street, and taking back control of your own financial future – you’re literally changing your life!

You can see Bank On Yourself video reviews on YouTube. Bank On Yourself really does continue to change lives, as folks of all ages and incomes have discovered.

More than half a million families and businesses use the Bank On Yourself strategy – based on using super-charged dividend-paying whole life insurance – to reach their short-term and long-term financial goals, without taking any unnecessary risk. Read what real people are saying about this strategy in these Bank On Yourself reviews.

Drew Wilder Reviews Bank On Yourself

Drew Wilder’s family has been using the Bank On Yourself safe wealth-building strategy since 2006. In this review of the Bank On Yourself method, Drew shares how he’s relying on Bank On Yourself as a safe way to build financial stability … providing a source of funds for needs ranging from home repair to paying for college. See why Drew trusts dividend-paying whole life insurance to safely grow his nest egg.

Phil and Marge Owens Recommend Bank On Yourself

[Read more…] “More Reviews About Bank On Yourself Changing Lives!”

The Financial Shock that Can KILL You

Middle-aged Americans who experience a major economic blow are more likely to die during the years that follow than those who don’t.

That’s according to a new study published in the Journal of the American Medical Association.

Shockingly, those who experienced a devastating financial loss – called a “wealth shock” – have a 50% greater risk of dying early. And it doesn’t matter how much money you had to start.

How likely are you to experience a wealth shock?

About 1 in 4 people in the study have had a wealth shock, averaging a loss of about $100,000. Often it was a result of a drop in the value of retirement investments or a home foreclosure.

Some shocks happened during the Great Recession of 2007-2009. Some happened before or after that.

But it didn’t matter if the economy was good or bad – a wealth shock still increased the chance of dying early.

The findings suggest a wealth shock is as dangerous as a new diagnosis of heart disease, says Dr. Alan Garber of Harvard University. Another expert noted that,

We should be doing everything we can to prevent people from experiencing wealth shocks.”

[Read more…] “The Financial Shock that Can KILL You”

Why is the “Father of the 401(k)” Now Putting His Money into a Bank On Yourself-Type Plan Instead?

It caused quite a stir when the man who is credited with being the “father of the 401(k),” Ted Benna, recently announced that he’s put a substantial part of his own money – “probably the biggest part of my wealth” – into what is most commonly known as a Bank On Yourself plan.

You see, for at least six years now, Benna has been calling the 401(k) a “monster” that “should be blown up.”

Benna is credited with finding a way to capitalize on the tax code to create a way for working men and women to supplement the pension plans that many workers used to have. Those pensions plans have been disappearing, and 401(k)s were created to hopefully help pick up the slack.

But over the years, Benna watched Wall Street and Big Business pervert the 401(k) in ways he couldn’t possibly predict.

In a recent interview, Ted Benna discussed three reasons why we should be very leery of 401(k)s and IRAs:

  • The government may repeal the 401(k) and IRA, so you won’t be able to put any more money pre-tax into these accounts, or the amount you can put in will be drastically reduced (Congress considered doing that again last year!)
  • Benna believes the next stock and bond market crash is imminent and could wipe out 40% of the typical portfolio
  • Wall Street has hijacked these plans, and the excessive fees charged by mutual fund companies and plan administrators are robbing you of up to half of your nest egg

I’ve Been Sounding the Alarm About 401(k)s and IRAs for Even Longer than Benna

[Read more…] “Why is the “Father of the 401(k)” Now Putting His Money into a Bank On Yourself-Type Plan Instead?”

Is Your Personal Balance Sheet – Your Financial Snapshot – Giving You a True Picture?

A balance sheet shows you at a glance what you own, what you owe, and what the difference is. The difference is your “net worth” – and the greater your net worth, the more you’re in a position to meet life’s financial uncertainties.

A balance sheet for John and Jane Doe, showing assets including $300,000 in retirement savings; and showing liabilities.
Figure 1. A Simple Balance Sheet
It’s called a balance sheet because your assets minus your liabilities always equals – balances – your net worth.

If you owe more than you own, your net worth is a negative number, and that’s an early indication of possible financial problems or bankruptcy in your future.

Here’s a simple balance sheet. See Figure 1. We see that John and Jane have added up the fair market value of their major possessions – their house, car, furnishings, cash in the bank, and retirement savings – and have total assets of $570,500. But when we subtract what they owe – their first and second mortgages, car loan, student loan, and credit card balances – their net worth (the cash they could come up with if they sold everything) is $369,000. [Read more…] “Is Your Personal Balance Sheet – Your Financial Snapshot – Giving You a True Picture?”

Why You’ll Need $500,000+ in Retirement for Medical Expenses Alone

Retirees spend more than a third of their Social Security benefits on out-of-pocket medical costs, on average, according to a new study by the Center for Retirement Research at Boston College.

Even after factoring in other sources of income, medical spending still took a huge bite – 18% – of seniors’ total retirement income.

A 65-year-old couple retiring now will need $275,000 to cover out-of-pocket health care costs during retirement, according to a study by Fidelity.

The news gets even worse, however, because these numbers do not include the cost of nursing home or home health care.

That can range from $40,000 a year for home health aides… to over $85,000 a year for a semi-private room in a nursing home, according to the Genworth 2017 Annual Cost of Care Survey: Costs Continue to Rise Across All Care Settings. And if you prefer a private nursing care room, you’ll have to cough up almost $100,000 a year.

Ignore the likelihood of needing long-term care services at your own peril: At least 70% of people over age 65 will require long-term care services, and more than 40% will need nursing home care, according to the U.S. Department of Health and Human Services.

Based on the average cost of a nursing home room and the average length of stay – which is 2.8 years – you would need over $250,000 to cover a single stay. [Read more…] “Why You’ll Need $500,000+ in Retirement for Medical Expenses Alone”

Federal Reserve Survey: Your 401(k) and IRA Won't Give You a Decent Retirement

If you’re counting on your 401(k) or IRA for retirement income, I have some bad news for you…

A new analysis of the Federal Reserve’s latest Survey of Consumer Finances by the Center for Retirement Research demonstrates that 401(k) plans are destined to fail millions of Americans.

The Federal Reserve survey is updated every three years, and the latest one reveals that, in spite of the long-running bull market and an improving economy … the typical couple nearing retirement will only receive $600 per month from their 401(k)s and IRAs combined.

That $600 a month is not indexed for inflation, so its purchasing power will decline over time.

And that $600 a month is likely to be the only source of income people will have to supplement Social Security because the typical household has virtually no other savings outside of its 401(k) and IRAs.

The Retirement Savings Shortfall News is Even Worse for Younger Workers with 401(k)s

[Read more…] “Federal Reserve Survey: Your 401(k) and IRA Won't Give You a Decent Retirement”