E18 - Using Whole Life Insurance to Invest in Real Estate (Pros, Cons, and How It Actually Works)

•  more than chasing returns
• When this strategy doesn’t work (and who should avoid it)

I also share how this same system helped my family handle unexpected medical expenses without disrupting everything else financially — something most people never consider when they think about investing.

This episode is for:

• Real estate investors who want more control over their capital
• High-income earners tired of parking cash inefficiently
• Long-term thinkers who value stability, liquidity, and optionality

This is not about getting rich quick.
 It’s about building a system that supports real investing over decades.

Learn more at www.jadenzubal.com | Follow @jadenzubal | Join the *Before the Returns Weekly* newsletter

📩 Questions or ideas? Email: jadenzubal.wealth@gmail.com

⚖️ Disclaimer: This podcast is for educational purposes only. It is not financial, tax, or legal advice. Always consult with a qualified professional before making financial decisions.

Transcript

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If you've heard people talk about using whole life insurance to invest in real estate, you've probably also heard a lot of conflicting opinions. I'm going to walk you through how I use it, what it does well, what it does not do well, and how it fits into my real estate strategy. So today is really a big conversation around what I personally do, how my investments work, what has worked in the whole life insurance world, and what maybe does not work. Hello and welcome to another episode of Before the Returns. I'm your host, Jaden Zuball, and like I said, today is just a whole life and real estate conversation. How do the two fit together and what does not work? To be able to talk about the real estate and the whole life insurance together, I really need to tell a little bit of my story so you understand the context of how I got here and what led up to this desire to even consider whole life insurance as a tool. So let's go back to the very, very beginning. Go back to when I was seven or eight years old. At that time in my life, I learned lessons a lot younger than most people I think should. One of those is I remember very vividly standing in the hallway of my dad's house. So my parents were divorced. They divorced when I was very young. I want to say I was probably under two when they divorced. And money wasn't a big part of the picture for us. It wasn't a big part of the conversation. In fact, it was something that was actively avoided because we just didn't have a lot of it. This conversation that happened when I was seven or eight is I'm standing in the hallway. We had a phone that hung on the wall, had the big long cords where you could walk down the hallway, and you had a little bit of a wiggle room there, right? But it was not the cell phone era yet. So I'm standing there, I'm talking on the phone to my mom. And I remember her saying something like, Hey buddy, can I borrow $40? And that to this day still stands out to me. Because I look at it now. I have a daughter that just turned 10, and there's no chance I would ask her for money. You just don't do that. But that happened, and it happened all the time when I was younger. Because to this day, my mom is still not good with money. Now that really stood out to me, and it started to shape some of the decisions that I made with money as I got older. Some of the things that that come to mind for me is okay, I created this desire to have control and stability financially, right? It's something that I knew from a young age I needed to change. I needed to change how our family functioned and thought of the financial world, right? Because we had no financial education. We just did what needed to happen. Now, my dad was always good at saving money. He just didn't have a lot to work with. So I grew up around a lot of uncertainty, and it created that, again, that desire for stability and control. This led me to, I need to give context to around the neighborhood that I lived in. We lived in this city here in northern Utah, which was essentially built out of old military housing. So all the houses look the same. They're all about the same size, they're all these little rectangle boxes. And it was actually a good neighborhood to grow up in. I enjoyed being there. But one of the things I took from that is I remember having a guy in the neighborhood who owned something like a hundred homes. He owned a bunch of the homes in this city, all these little square boxes, right? And people rented from him. He actually lived in one of them too, but while he was renting out these others, and I always thought to myself, like, how did he get there? How did he do that? What decisions did he make to allow him to own all of these homes? Right. So very young, I was probably maybe 11 or 12 by this point. I started thinking about real estate. I thought about real estate investing and what was going on there and how he was doing it. Fast forward a little bit more, get to like early high school years, and I got my first job. I started working, started saving, bought my first car, and I'm saving up money again with this same goal of okay, I think I'm gonna go to college, but I also think I want to buy my first house. I would love to buy that first house as soon as I possibly can. So keep going through life and I end up in college, which when I get to college, I don't even know what I want to do yet. I'm just there. And I'm saving consistently, I'm doing well in my work, but I end up in an economics degree, and I end up going to business admin and I'm bouncing around through a couple of different things, figuring life out. Because in the end, my goal is still to buy real estate. It's not really to go to school. And so I do end up graduating from college, but by the time I do that, I've already found some other things that have become even more important to me. So I wasn't looking for a magic investment. I was looking for a system that supported long-term real estate investing. Okay, so if I'm looking for this system, I'm saving consistently, I'm really focused on this goal of buying real estate. I'm halfway through school at this point, halfway through college. And I remember sitting down at the computer, getting on some classified ads, and I'm just looking through different financial jobs, right? Because again, from a very young age, I knew that this is the direction I wanted to go. So I'm looking through different things, and I come across this company called Paradigm Life. Stumbled across the name, started reading through the descriptions, and it looked really interesting. So I called them up, went in, had an interview, got the job, started working with them, but I still didn't fully understand what it was that we did there. And after just a couple of months, I'm getting deeper and deeper into this idea of whole life insurance and how whole life insurance can play a role because I'm watching the guys around me who work in the same office, and many of them are real estate investors. Some of them own 20, 30, 40 properties. So they've got a lot going on in the real estate space. And I start asking questions, start digging into it. What did you do to start investing in real estate? How is this working? Where are you buying properties? All of those type of questions. And this repeating theme kept coming up, and it was I'm using my whole life insurance. I'm putting my money into my whole life insurance. So the savings, the money that I'm already putting into my bank account anyway, I'm just putting up a good portion of that through the whole life. And then I'm using that insurance policy to buy my real estate. I didn't even know that existed at first. So when I figured out that this company sells whole life, I didn't understand that's something that could be done with it. So naturally, I had some skepticism and I needed to spend more time around it. I'm I typically am a pretty analytical person and I like to dig into the details. So that's exactly what I did. I spent the next couple of months just digging into the details, learning exactly what these guys were doing and how they were doing it. And some realizations that I came to are one, whole life insurance is not an investment. Okay, it's just a financial tool. It is a tool that we can use to enhance our investments, but it is not the investment itself. So just like in in real estate, if you're gonna build a house or if I'm gonna go in and rehab a home, you need a handful of different tools, right? You need might need saws, hammers, nails, screwdrivers, drills, all these different things. And that's going to help you build the home. If you want to build your financial picture, you need the same type of tools. Whole life is just one of those tools. It fills its role and it does a really good job at its intended purpose. But if you're trying to use it for the wrong purpose, you will not be able to accomplish your goal. Period. Okay, so let's get back to the story then for a minute. At the time that I started working for this company, I mentioned I was in school, getting closer to my degree, but I wasn't quite there yet. And I was 22 years old. I was making roughly $40,000 a year, a modest income. And I started funding this policy with roughly $7,000 a year. Okay, so modest income, modest savings. And I started reasonably small with the whole life on purpose because I needed to understand it well. If we look at today, I'm funding quite a bit more into whole life insurance, but it's because I understand it very well. I know exactly what I'm doing with it, and I've been doing it for a long time now. But it doesn't mean you have to start that way. So you don't have to be wealthy to use whole life insurance, which I think is a huge misconception. I hear it all the time, that whole life insurance really only makes sense for wealthy individuals. I will say that it does help when you build wealth. It makes the whole life even more productive because you're able to fund it more. But it doesn't change the fundamental outcome, which is that whole life insurance serves its purpose in both scenarios, right? Whether I was making $40,000 a year or $400,000 a year didn't change what the whole life was doing. It just changed how much money I was putting into it, right? That's it. You still are gonna get the same outcome out of it, though. How did this lead into my real estate then? As I mentioned, many of the people that I worked with were buying a number of properties, some of them 20, 30 plus. And as I talked to them about it, I talked to them about how they were using their real estate to do it. One of the other repeating themes that came up is they were buying in states like Tennessee, Florida, Ohio, Alabama, buying some properties in Utah where we lived, and that's where our office was based out of, but a lot of them were buying all over the country as well as in Utah. So I had to understand this deeper as well. And this led me to the first property I ever purchased, I bought in the state of Florida. And I bought what's called turnkey real estate. So turnkey real estate is essentially properties that are already rehabbed and already up and running, with typically having a property manager in place, and they might already be leased out as well before the investor, being you and I, come in and actually buy the property. So in Florida and in the next state that I bought, which was Tennessee, what I found is that there's very much a cash flow focus in those states. So how much income I can create each month, not so much appreciation, right? The property values didn't seem to increase very much, even over extended periods of time. I'd get five, six, seven, eight years into it, and my property values were higher, but not by significant numbers. So this was very much a cash flow play, not so much an appreciation play. But the way that I brought bought these properties ties back in the whole life, right? Because what I had done is I had been saving for all these years before, mostly in my bank account until I found the whole life. And then I moved money from the bank account into the whole life, and I took policy loans. So I took loans against the whole life insurance to buy these properties. So that was the Florida property and the Tennessee property. And that's really what started my real estate journey. Then I sat on these two properties for a few years and just played it out, just let things do what they were going to do. And during that time, I would use any cash flows that we would get from the real estate to pay back my policy loans. So to fund the money back into the life insurance policies. Okay, and that leads into something that I like to call being an honest banker. So if you're an honest banker, what it means is that when you borrow money from yourself or you borrow money against your life insurance policies, or you take it out of your savings account, it doesn't matter what you're doing in terms of where the money comes from, an honest banker makes sure that they pay that money back. Okay. Because if you were to go to take a loan from the bank, guess what? You're gonna have to pay it back. When you take money out of your savings account, or you take money out against your life insurance policy, you're not technically required to pay that money back. The insurance company does not send you to collections. They don't send you monthly bills, they don't tell you there's a monthly payment on that loan, which is a pro and a con, right? It means you have the freedom to decide when you're gonna pay it back and how you're going to pay it back, but you have to be disciplined enough to say, okay, I'm actually going to make the decision to pay this back. Because in the end, if you want good results, if you want long-term stable wealth, you have to pay yourself back. You have to put money back into the policies in order to get the results that we're talking about here. So this is that it separates the speculators from the investors, right? Investors are people who make disciplined decisions and make wise choices about when and how they move money around. Speculators or gamblers are people who take and dump money into different things and just kind of keep bouncing around and try and time markets and get results, right? You can win by being a speculator, don't get me wrong. I've seen people do it, but you have high risk and the outcomes are unpredictable, right? You can't really determine what's going to happen. On the investor side, you're still going to have risks. Don't get me wrong. Anything you invest in, there's there is risk. But you can have a little bit more control over that risk. And the whole life insurance is a big way that I have taken some control. Going back to when I was seven years old and I needed control and stability. So it's created a ton of control and a ton of stability in my financial life today. But to do it, you have to follow things like being that honest banker. You've got to pay attention to the money and you've got to put the focus in the right place at the right time. Something to think about here is if you wouldn't do it to the bank, then don't do it with your own money, right? If you wouldn't take money from the bank and not pay them back, then don't do that to yourself. Nobody enjoys using the bank's money and having to pay them interest and having to do everything on their terms. But one thing that the banks do is they do require repayment, right? Because if they don't, they're going to go bankrupt. Guess what? If you don't pay yourself back, you're also going to go bankrupt. So it's really important to pay attention to that principle and have some discipline in how you use your money. Now, okay, so does this mean that we can only use whole life insurance to invest in real estate? Of course not, right? Whole life insurance can be used for many uses. I have personally used it, of course, for the real estate, but I've used it to invest in businesses. I've used it to do real estate syndications or business syndications, which is where you invest money and somebody else runs the deal, they manage everything. And then I've used it even for things like medical bill. I have six-year-old twins, and when they were born three months early. So they spent a long time in the hospital. We had significant medical bills from that, much of which was paid by our health insurance, but then there was a portion left to us. And a lesson that I learned from all of this, again, tying it back into control and stability, is if you're willing to pay a hospital all at once and just pay them a lump sum, oftentimes they'll give you a big discount. And that's what I experienced here is we were given a significant discount because what I did is take a policy loan, pay the hospital off, and then I just paid the loan back. But by doing it that way, I actually saved myself multiple thousands of dollars, a significant difference because I paid them right away. And I wouldn't have been able to do that if I didn't keep some liquidity and maintain control, right? And I kept that liquidity inside the whole life insurance at that time. So I could make huge differences in the way that you manage your life, even outside of investments, even outside of the real estate. Because ultimately liquidity matters most when life doesn't go according to plan. It certainly was not the plan that our children would be born a couple months early and have significant medical concerns, and in turn we'd have significant medical bills, right? That's not the plan. But we were able to continue on and make everything else function normally because we maintained liquidity. Okay. Ultimately, some of the things that I've learned from all this is that whole life is not an investment. It's not meant for high returns, but it is meant for stability, liquidity, protection, and repeated use of capital. Okay. So again, that's stability, liquidity, protection, and repeated use of capital. This system can work very well for most people. Not all. There are gonna going to be cases where it does not work. And that's something that needs to be talked over with your advisor on a case-by-case basis. But in general, as we've talked about, it it works very well for high-income earners and it can still work for people like myself when I was 22 years old making $40,000 a year. I still did it then, and I'm still glad that I did it then. But it works very well for real estate investors, people who value control and liquidity, and long-term thinkers, right? You've got to have a long-term outlook on your investments in order for this to make a lot of sense. It doesn't work well for the people who have the get rich quick mindset, the speculators that we talked about, the max leverage, I want to borrow against every penny that I own, I want to use every penny that I own all the time. This system probably doesn't work well in those cases. And the people who don't want to engage with their money. So the people who would rather invest in something, like let's say put your money in a brokerage account and just let it be on autopilot when you have no interest in long-term savings, long-term investments that you control. Nothing wrong with that. But this works better in the cases of you want some control and you want to be able to have influence over how your money works, right? So if this episode resonates with you, the most important thing is understanding how this works before committing to it. I have other videos that go deeper into the mechanics, the mistakes to avoid, and who this actually makes sense for.