Resist Inflation

5-ish Minute Private Family Banking Podcast.

Resist Inflation

Private Family banking is a long-term financial strategy. We teach people how to leverage a high cash value permanent life insurance policy to take control of their household finances.

In this episode, I continue to cover some of the benefits of using the Private Family Banking strategy. Specifically, I talk about the inflation-resistant nature of Private Family Banking and how this strategy helps your future dollars as well as today's dollars.

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Transcript

SPEAKER_00 0:20

Hey everyone, Mike here back with another episode of the Five-ish Minute Private Family Banking Podcast. This is another episode discussing some of the benefits of holding your money inside of a properly structured whole life insurance policy, one that's optimized for private family banking. So far, I've talked about what the structure looks like, how it provides you with a liquid pool of money, how that pool of money provides consistent growth over the long term, and how that growth is not impacted by the volatility of the markets. In the last episode, I discussed the strat how the strategy can provide some level of protection against creditors and judgments in certain cases. If you haven't listened to the previous episodes, please go back and check them out. They're short episodes, and like this one, you'll gain a better understanding of how this strategy works, and it'll help you understand better what we talk about today. In this episode, I'm going to talk about how private family banking as a strategy is resistant against inflation. I'm not going to say inflation-proof, but there are a lot of ways that in uh private family banking helps guard against the impacts of inflation. So we'll go through the several different uh examples. First, let's talk about the premiums. Okay, so the policy is designed with a level premium structure. And as time goes on, the dollar's value is going to change. Let's say you design a policy with a $10,000 per year premium. Consider what that $10,000 buys you today. And now consider what it might buy you in the future. In 20 years, that $10,000 is likely to buy you considerably less out in the regular marketplace. However, the level premium means that, in a sense, a growing amount of life insurance actually becomes cheaper over time. Second, let's look at uninterrupted compounding of the cash value inside the policy. If you save money to pay cash for something using a general savings account, you will put yourself in a constant save and then spend cycle. And then you'll replenish that cash in a savings account over time. What you've lost when you do this is the compound interest on the money that you withdrew to make the purchase. This is not the case with private family banking, as your cash didn't actually stop growing while you used it. So, in that sense, a constantly growing pool of cash can help guard against some of that inflation. Additionally, the death benefit grows throughout the life of the policy. Because we structure the policy to have the dividends purchase paid up additions, it means that the death benefit continues to grow. And this means that the premium payments actually have increased purchasing power over the life of the policy. It also means that the protection purchased through the policy for the purpose of providing a tax-free wealth transfer to the beneficiary upon death, that is actually increased as well. And that idea, the idea of tax advantages, is the last thing I'll talk about today. The cash value inside the policy is growing tax deferred. Okay. And as it's growing tax deferred, similarly, you have policy loans that provide tax-free access to the cash that you can use in order to purchase cash-flowing assets that can grow your wealth. If used properly, if structured properly, the interest on that loan can also be written off in certain cases. Finally, as mentioned before, the death benefit is paid out tax-free, providing that tax-free transfer of wealth at the end. So to summarize, you get increasingly efficient premiums that purchase a constantly growing death benefit throughout the life of the policy. You also get uninterrupted compounding of the cash value, access to that cash value on a tax-free basis for cash-flowing assets. You may be able to get tax advantages on the loans if they're structured properly, and you get to transfer this wealth to your family tax-free. All of these benefits individually help guard against inflation for the policy owner. But when combined and used together as a tool and as a life strategy, it becomes a really powerful guard against inflation. Okay, that's it for this one. Please like and subscribe, share this with a friend, and I'll see you next time. Until then, out