We live in Henderson, NV which is located just outside of Las Vegas and is ranked #1 on the 2017 list of safest cities to raise a family, partly because of it’s routinely low crime rates. A couple weekends ago a few of us were out riding ATVs in BLM land behind our home. The desert and mountainous land, owned by the government and managed by the Bureau of Land Management, is vast and makes a wonderful playground for hikers, horseback riding and ATVs.
While out riding through the desert and mountains we approached a dip in the trail where, down in the gully, my attention was drawn to an old car with foiled windows and black trash bags stretching from the roof to the ground, creating a simple shelter.
Even with Henderson’s good safety report, no one can be too cautious, so I slowed the ATV to a stop at the top of the hill to observe the car and its contraption below. Suddenly, a man snuck out from underneath the black trash bags at the rear of the vehicle and crept to the front of the car where he picked up a hatchet and returned to the far side of the vehicle. I had seen enough, then and there, to know that this situation exposed me to a RISK that I wanted to avoid. Dad, who had been riding close behind me, had by now pulled up at my side. Together, we made a quick decision to detour and continue our ride in a different direction so as to avoid this risk rather than continue to expose ourselves to it.
Nobody can know, if we had continued down the hill, what the outcome of this tale would have been? We may have arrived at our destination sooner, we may have been unpleasantly detained, or we may not have arrived at all. The point is, nobody knows! And obviously, we chose not to take the risk and find out.
I like to have fun, creating good times and enjoying life. But taking unnecessary risks is something I try to avoid, not just when on an ATV in the desert, but in all areas of my life.
At McFie Insurance, we help people avoid risks with their finances and family. One way we accomplish this is by using life insurance.
Life insurance should always be designed so that it avoids risks instead of assuming them.
Life insurance, by its very nature, is supposed to help people solve for the risk they would face upon the death of a loved one, a family income earner or a value contributing employee or business partner. By combining Participating Whole Life Insurance (PWLI) with the Perpetual Wealth Code you can accomplish even more than avoiding these risks. That is because by using PWLI as a valuable financial tool you can create greater wealth, both financial and in other forms, in your life and benefit from it while you live.
Insurance companies have created other products on the market that don’t offer the same guaranteed values that PWLI offers. In fact, some of these other products shift the risk away from the insurance company and put it back into the policy owner’s lap. As absurd as that sounds, it’s true!
Did you fully comprehend that last paragraph? That means that someone may purchase a life insurance policy to avoid the risk of the loss they would face upon that person’s death, and instead of purchasing a policy that is guaranteed to make a payout, they purchase a policy that puts a large percent of the risk back on their own shoulders. While most everybody would like to have greater freedom and security with their finances, not everyone knows how these different kinds of insurance products compare when it comes to securing and creating freedom with your finances. So, let’s do a brief review.
Participating Whole Life Insurance is a “Whole Life” product, meaning it is inherently designed with guarantees to cover the entire life of the insured. When you pay a premium into your PWLI policy you are purchasing a guaranteed death benefit. In addition to this you are also being provided a guaranteed cash value (i.e. equity) which is accessible for any reason you might need, as an interest only loan against the policy. These guarantees are available because of the long-term, secure and guaranteed investments the insurance companies make. In addition to the guarantees found in your PWLI policy, as a policy holder, you are also part owner in the life insurance company. That’s where the “P” for participating comes from. This means that you get to participate in any profits of the insurance company, which are paid to you in the form of dividends. Once paid, the dividend cannot be taken away, guaranteed!
Universal Life (UL), Indexed Universal Life (IUL) and Variable Universal Life (VUL) Insurance policies, on the other hand, expose the owner and beneficiaries to risk. These polices are designed around market speculation with the premise of attaining greater wealth faster. Here is how it works. UL, IUL, and VUL policies are composed of two elements: Term insurance and savings. When you pay a premium, money goes into a cash fund. From here the premiums on the Term insurance are paid, and the rest of the money is invested. With a UL policy, your savings are tied to an interest rate. With and IUL policy your savings in the policy mirror an Index like the S and P 500. With a VUL policy, your savings are directly invested in the market. These types of policies will often times have a small 0-1% guaranteed minimum interest rate, but then they cap your ability to earn more than a certain percentage on the invested side. Typically, that capped rate is around 12 to 15 percent. At the end of the policy year a management fee, premium fee and other fees are assessed and collected from the savings in the policy.
One of the advertised benefits of these types of policies is something called variable premium and/or adjustable death benefit. This can, however, and often does work against you. As you get older, the price of the 1-5yr renewable Term Insurance which all UL, IUL, and VUL policies are based on, becomes more expensive. If the growth in the investment savings account does not keep up with this cost, (we see this happening to people all the time) the Insurance company approaches you with the choice to either increase your premium, or reduce your death benefit. Neither one of these options creates the freedom and security that you need financially.
That is the main reason we don’t sell UL, IUL and VUL policies at McFie Insurance. The RISK passed on to the client is simply too great for us to expose our trusted clients to.
If you’re the type of person who loves risk, Participating Whole Life Insurance may not be for you. However, if you want guaranteed results, the opportunity to participate in dividends, and the right to have a guaranteed level premium for life without the risk of it becoming too expensive for you in the future, then you want a Participating Whole Life Insurance policy.
It’s really pretty simple. You don’t have to assume any risk with your finances any more than my dad and I had to assume the risk of riding our ATV’s past that fellow with the hatchet. All you need to know is that there is another route. A route that can get you to where you want to go, guaranteed, without exposing yourself to needless risk.
(If you have 30 minutes for a great education on the types of life insurance available, check out my sister’s presentation on Types of Life insurance at this link: https://www.youtube.com/watch?v=6GcjJ8zeK7A&t=8s )