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304 Responses to “Secret 770 Account” (or “The President’s Account”) Explained

  1. Anyone know why Mark Ford changed his name from XXX to Mark Ford? Is he hiding something from his past? What might he be running away from?
    Curious minds would like to know.

    • From Mark Ford in the Palm Beach Letter about his name
      “Many years ago, I advised some of my protégés—Paul Hollingshead, Don Mahoney, and Katie Yeakle—to start a business. They came up with the idea of teaching copywriting, since Don and Paul had both learned to be A-level copywriters under my tutelage.

      They wanted the program to be based on my teachings. I agreed but told them that I didn’t want to be actively involved because I was very busy consulting and had no time to get involved. They said okay, but they still wanted to use my story. I said you can do that, but don’t use my name.

      So they gave me a name—Paul Hollingshead came up with Michael Masterson. It wasn’t a lie. It was a pen name. (A very common practice in publishing, by the way.) Everything they said about me was true. At the time, we thought they’d use my story (as Michael Masterson) to launch the program and after that they could drop it.

      What happened was that I became interested in that business and found myself writing for them and consulting with them. Since we had introduced me as Michael Masterson, we kept using that name. Several years later, when I started ETR, I kept using it, because by that time Michael Masterson was a brand.

      Whenever I spoke at an AWAI or ETR conference, I told the crowd the story and gave them my real name. But this didn’t stop rumors from spreading around the Internet about my pen name. Some of those rumors were wild. I was this king pin of the mafia and all that. It was amusing.

      Anyway, when I agreed to write for The Palm Beach Letter, I had already retired from ETR, so I thought I could now go back and use my real name. We have made it clear to everyone since then that Michael Masterson is Mark Ford.”

      • Back in the day of ETR they did try to keep the Mark Ford thing “secret”.
        I remember one conference video where a speaker would refer to “Mark” and “Michael Masterson” would lean in and say “Michael”, “It’s Michael”.

        It’s not like there was any dirty laundry associated with the name Mark Ford, but they seemed to try to keep the pen name alive as best they could for the duration.


    • Back to the Life Insurance, or “770″ account as you/Tom Dyson describe it. What you are referring to (I believe) is called an “Indexed Universal Life Insurance” policy. If written correctly, it is a “contractual” agreement between you and the Insurance Co to pay a death benefit when you die. But, there are certain benefits and disadvantages. First, only “buy” one of these if you have plenty of disposable income, i.e. you can pay the premiums and then wait for 15-20 years before you begin to withdraw funds. Having said that, I purchased one of these and this is the basic plan: 1. Guaranteed no loss of principle (see following) 2. The “index” is tied to the S&P 500 index (usually there are several different indexes to select), and the “index” is reset every year at the new S&P level. So, the only way your “investment” does not GAIN extra money is if the S&P was to go down every year, below your index point. 3. But, this is an indexed insurance policy, so you are guaranteed no loss. Also, my policy is guaranteed to increase AT LEAST 3% every year, no matter what the S&P Index does. However, if the S&P 500 increases more than the 3% minimum, you are paid the % increase of the index up to (capped at) 13% (my policy). 4. I have a separate annuity that funds the annual premium, estimated to last more than 20years. 5. I received a substantial “bonus” when I purchased the policy of 15%! (True!). 6. Yes, there is a penalty for early withdrawal of PRINCIPLE (penalty ends after year 10 or 15, depending on Life Insurance company). But, after the 20 year period (could actually be less, but for lower amounts of withdrawals) you can take “tax free” loans against the value of the Life Insurance (not the principle). As long as your withdrawals do not draw your life insurance to “0″ value, you do not have to pay tax or repay the loans. 7. In the end. when you die, there may be almost nothing left in the account, but “so what”? Your objective here is to receive a free money stream (via loans) from your paid-up life insurance.

      That is a short description of the so-called “770″ account. The IULI is super, if you can afford the payments and can wait for approx. 20 years to begin taking your “tax free” loans. BTW, the policy is a “contract” between you and the Ins Co, so legally (hopefully) the US Gov’t cannot change the contract. But, never trust the politicians. See an insurance professional and ask about the IULI. It surely impressed me as a great way to guarantee future stream of income. Only downside is that you have to wait to begin your withdrawals.

      • That’s a helluva deal you got, if true. You can’t find anything remotely that good anymore in today’s interest rate environment. I’d recommend Pamela Yellen “Bank on Yourself” rather than Nash. However, she doesn’t tell you her favorite carrier because it’s her trade secret, as an agent, although I can say it isn’t an indexed product.

        • Using a whole life policy with paid-up additions, you can start taking loans as soon as there is cash value in the account. The current rate of return for whole life is equivalent to buying term insurance and investing the difference in a taxable mutual fund returning over 10% pre-tax.

          • This comes under the caption of “There is no free lunch”. The life insurance companies are not dummies. Interest is charged on the loan from the cash value of standard whole life policies. The loans also reduce the face amount of the policy. The interest rate on my whole life cash value is 8%

          • Check the wording here. “You can start taking loans?” Loans? Its YOUR MONEY! Why should the insurance company charge YOU money in a form of a LOAN for using YOUR money? Not much logic here. NEVER use Life insurance as an investment. Buy Term and Invest difference in an IRA.

          • David…If you are paying 8% on a loan on your policy and it affects your cash value and death benefit you insured yourself through the wrong company.

          • Misusage was here:
            Robert says: (September 1, 2013 at 12:25 pm)
            “Back to the Life Insurance, or “770″ account as you/Tom Dyson describe it. …
            1. Guaranteed no loss of principle (see following)”

      • I am wondering if my insurance wl I should keep it as I since got it have been
        diagnosed with diabetes. I am not sure what the consequences would be to
        cancel wl and replace with term. Would I still qualify for term ins.
        Thank you

        • Lee, If you have diabetes and already have a WL policy, you would be foolish to cancel it and get term. The term would be more expensive because of your diabetes and depending on the severity of your condition, you may not qualify. This is one of the advantages of WL insurance – once you have it, the policy is guaranteed for life as long as you make your premium payments. Don’t let ANYONE tell you otherwise. Keep what you have my friend!

      • You don’t borrow again the “life insurance death benefit” only the cash value. Index UL and INDEX WL are very different too. Also cost of insurance continues is deducted even if the index makes 0%, the minimum 3% is average annual but if you have a few good index years you may have no interest added during a particular index term when the ends up at 0% if it averaged higher than the 3% up to that point. Insurance policies used to be great safe savings accounts but not so much anymore, because of the low interest rate environment couple with costs, which is why they turned to Index type products to try to earn higher returns. Loans are not tax free in the long run if the policy lapses or is surrendered before death. Only if paid out on death will the “accumulated loan be paid off tax free by using a portion of the death benefit amount”, anything else results in a huge TAXABLE GAIN equal to the loan plus interest ( over and above any cost basis the may be left assuming you didn’t “”withdraw the basis if it is a Index Universal Life).

      • Not sure if you are being deceptive, or you’ve been deceived, but I can’t begin to describe how little of the real story has been told in your above post.

        IULI, while not a scam, is one of the worst deals in all of the insurance industry. And it is unquestionably the least transparent. While you are mostly correct in your basic synopsis of the policy structure, you left out most of the caveats.

        1. Let’s start with the big one. THERE’S ABSOLUTELY NO GUARANTEE THAT YOU CAN’T LOSE MONEY! While it’s true that you can’t lose money due to market performance, the insurance contract has mortality, expense, and administration fees embedded in it that are deducted from your cash value. They increase as you age. If your guaranteed growth % isn’t high enough to overcome those costs, in years that the market performs poorly, your “principle” will decline. It’s a fact. Call the insurance company if you don’t believe me. Also ask them if they have the right to increase their annual insurance charges. Hint: they do.

        2. Index products do tend to have a minimum crediting rate and a potential annual “bonus” that is dependent upon the S&P 500 or some other index or combination of indices. However, the insurance company doesn’t invest in the actual S&P500 index, it invests in the derivative markets of said index. As such, your return precludes dividends, which (since 1940) has made up roughly 25% of the average annual return of the S&P. When the market makes 10%, your IUL is toiling somewhere in the 7%-8% range.

        3. There is a cap, which you accurately mentioned. In your case, 13%. If the market makes more than 13%, you don’t get the amount over and above. What you failed to mention is that the cap rate is almost never contractually guaranteed. The insurance company has the power to reduce the cap at their whim. And many have been doing so as margins thin in this low interest rate environment.

        4. Similarly, there is a limitation called a participation rate, which you fail to mention in your post. Perhaps your participation rate is 100%, but that is rare today, and has always been a costly feature to add (it increases those charges mentioned in #1). In short, the participation rate is a limit on how much of your cash value is “participating” in the stock market. If you have a participation rate of 80% (which is common), and the S&P makes 10%, you’ll walk away with about 6% (remember, you lose the dividends, and then you get 80% of that remainder). Again, participation rates are not contractually guaranteed and can be reduced by the insurer.

        5. The poster has a guaranteed 3% growth rate, but products these days are usually offering 0% or 1%. I’m not questioning your honesty, just pointing out that new investors aren’t going to get such a deal. There was a time when variable annuities offered 6% compounded annual growth too. But those days are long gone.

        6. Most IULs run on an annual point-to-point market assessment. Meaning that if your contract is purchased on March 1st, the return of the stock market is measured from 03/01 to 02/28 each year. There’s no jumping out of the market mid year after a huge run-up, even if you are positive that a correction is coming. You only get to make a market adjustment during a small window near the time of your policy anniversary.

        7. Speaking of the market, did I mention that it rarely earns between 3 and 13%. Most investors know that the market has historically made about 10% per year (again, including dividends, which the IUL folks aren’t getting). So an unassuming IUL investors foolishly looks at this product and imagines that he’ll make about the same. But in truth, the market varies widely and wildly. It may be +30% one year and -10% the next. Over the course of many years, that averages out to be a respectable number. But all those years of big returns are vital to the long-term average return. And for an IUL investor, the cap becomes their worst enemy. In bad years, they make almost nothing (but they also lose almost nothing). But in good years, they also make very little (que the participation and cap rates, minus dividends). And since there have been, historically, twice as many good years as bad, all that missed growth adds up. Anyone quoting IUL with an expected growth rate greater than 5% (before fees, mind you) is engaged in borderline criminal conduct.

        7. IUL is popular because it is stock market based insurance that doesn’t require a securities license. As a consumer, doesn’t that just scare the ^%$# out of you? Insurance companies found a crafty way to allow those not qualified to sell investments to actually sell investments…! Yikes. FINRA and the SEC have been fighting for years to get these things reclassified as investments, but the insurance industry fights them because most of the folks peddling these products would lose the ability to do so. And those of us with securities licenses (I’m in the biz, fyi) are smart enough to realize that these investments are mostly trash.

        8. Like I said, anyone that owns a calculator stays away from these things. Why? Because there are better alternatives. Variable life, for instance. Agents selling IUL love to harp on the market risk of variable universal life. But they conveniently ignore the fact that any market environment that tanks a VUL will also sink their precious IULs (just more slowly). On the other hand, during a positive market cycle, a VUL will outperform IUL in every way. For one, there’s no caps. There’s also no participation rates. Not to mention you get dividends, and can move in or out of the market at any time (you can also move investments within the market at your leisure). There is literally not one 10 or 20-year rolling market period since the Great depression in which an IUL would have outperformed a VUL.

        A long post, I apologize. But someone needed to put all the cards on the table. For the record, I am a Certified Financial Planning practitioner that is fully licensed to sell all types of life insurance, including IUL. And I don’t make any more or less money by promoting VUL over IUL. So as someone that has the power to sell both, and has no vested interest in seeing VUL succeed over IUL, ask yourself why neither I, nor anyone in my firm, has EVER sold an IUL product.

        good luck out there.

        • Note, you know about half as much as you think you do. There are many mistakes in your essay. Just a quickie – SEC and FINRA (formerly National Association of Security Dealers) have been fighting for requiring those who sell fixed-indexed annuities to be securities licensed so the security dealers can control the market instead of having to compete against it. It was NASD (now FINRA), led by Mary Shapiro, who was fighting for this non-sense notion that FIXED-indexed annuities are securities. When she went to the SEC, the SEC began the same fight. Congress rightly outlawed their self-serving effort. The key is that these products are FIXED-indexed products, which means they have no market risk and are clearly not securities. There has been so such fight on the FIXED-indexed life insurance products. NASD-FINRA has been waiting with that effort until after they got their way on the annuities. Congress put an end to the whole bad joke, and the security dealers will have to continue to compete with these innovative and, in many cases, excellent products. I would prefer that those who know a little quit pretending to know it all.

        • Thanks for this thoughtful response. I’ve been researching EIUL for about two months now trying to make sense of it all. I also came across the banl on yourself program and read the book. I am self employed so I am looking for a fairly safe and predictable vehicle for my retirement fund with a decent return (at least 5%) and I’m hoping to avoid much of the volatility of the stock market that can eat up my account (wishful thinking huh?) The best part of these life insurance polices seems to be the tax deferred growth and tax free withdrawals (which also will not affect my social security benefits as taxable income.) They seem like they could be good vehicles but I also hear a lot of negative views on them. Can you recommend anything for me?? Thanks

          • Hi Nicholas,
            I’m sorry it took me so long to notice your request. I’ll be happy to help you know as much as possible as quickly as possible. It will help a lot if we can have direct back and forth communication. Send me an email at mj@malcolmjensen.com and I’ll be happy to help you. Note that I sell all kinds of life insurance except the very risky variable life. I don’t need a sale to be happy. It would please me to be able to help you.

        • Thanks for this thoughtful response. I’ve been researching EIUL for about two months now trying to make sense of it all. I also came across the banl on yourself program and read the book. I am self employed so I am looking for a fairly safe and predictable vehicle for my retirement fund with a decent return (at least 5%) and I’m hoping to avoid much of the volatility of the stock market that can eat up my account (wishful thinking huh?) The best part of these life insurance polices seems to be the tax deferred growth and tax free withdrawals (which also will not affect my social security benefits as taxable income.) They seem like they could be good vehicles but I also hear a lot of negative views on them. Can you recommend anything for me?? Thanks

    • thank you for sharing the info about the book…I will definitely check it out…as for ins., I took out a variable universal life policy with a reputable co., consisting of decent mutual funds, back in mid-90s…unfortunately, the FEES associated with it ate at the growth…and even though taking out loans to help several causes along the way were easy, repaying those loans to myself were not (not being in the “rich” category)…so between the fees and loan amounts, together with interest due that I never paid, it was wisest recently to surrender the policy before it imploded…I would be disappointed to learn that the 770 accnt is life ins. Tom, can you say if Becoming Your Own Banker infers that?

      • Hi SDL, you will find in Nelson’s book that the idea of Becoming Your Own Banker can be done with something even as simple as a shoebox. And that’s the important piece! But, yes insurance is generally the safest and most effective vehicle and is exactly what a “770 Account” is. If you want more info, I actually specialize in teaching people Nelson’s concept for Nowlin & Associates, a wealth management firm in Homewood, AL.

      • I started self financing about 4 years ago. Since then, I’ve become a keynote speaker on how money works and show others how to do the same. The key is managing down debt, accumulating wealth and make better financial decisions. Get the Nash book, Find an expert in self financing and start as soon as you can. Set it up for your children at young ages and watch them become financially free of the predatory banking system early on in life. It has changed my life and I thank CR for teaching me the process.

      • A variable universal policy has no protection against loss and is in no way endorsed by Nelson Nash and the Infinite Banking Institute he created for IBC practitioners. You purchased the wrong policy by an agent claiming to know and teach the strategy. This occurrence is one of the main reasons why the Infinite Banking Institute was created.

      • The creator of infinite banking or be your own banker actually uses WL insurance with paid up additions rather than a Universal Life policy indexed or otherwise. You can do it with Universal Life but it actually works better with WL. Get the book, and I recommend working with an agent who understands the product so that you get the best possible solution.

    • Hello, I have recently purchased a Income for life, Modified Universal Life Insurance Policy. I
      First read about it on EVG, and thought it was a good way to use my money. But I did not buy it then, I again read about it with the Palm Beach Letter, and I did my DD , but then I talked to a local Agent in my town, and told him what I wanted to do. He not only knew about this but was able to get me insured with a preferred rating, and I will be contributing my maximum allowable amount every year until I retire. I hope to have enough money to live retired like I live now. Not rich but not poor, so things like 401k that my company offers but does not contribute to is taxed after you retire, assuming that you will be earning less money so lower taxes is just not going to work. Since my income will be at or near my wages today. The Income for life program will allow me to take a loan out from the money and either pay it back, or just let it be taken back after I am gone. Either way the money in the account still grows unlike a 401k loan . So I am fully recommending people look into this program. I have said that if I had know about this program 30 years ago, I would already be retired. I am glad that I fould a local person here that has been very helpful too.

      • Let me share some true facts about whole life insurance or any policy that has
        a cash value build-up in it. Most people need insurance when they are young,
        building their lives with children, home, cars, education, etc. They cannot afford to
        properly protect their loved ones or their estate with expensive whole life insurance.
        Term is much less expensive per thousand at all ages. The cash value in true WL Policies
        never belongs to the beneficiary–it belongs to the insurance company. That is why one has to pay interest on their own money if they borrow it and if they die the beneficiary gets the face amount and the ins. co. gets the cash value. The IRS says cash value is an over-payment of premium , thus no taxes on cash value. Insurance is for covering libilities and not for a savings program. Buy term and invest the difference where the beneficiary gets the face amount plus the invested difference. I do believe a few companies sells ART
        to age 100. Most people do not need insurance after 60-65. They need a quality estate plan
        which will avoid probate and and many other financial pit falls.

        • The cash value is the portion of the face value that can be accessed before death. When a policy matures, the cash value equals the face value–they are the same money. Having a whole life policy in retirement allows one to spend down assets more rapidly; it allows about 35% greater cash flow without having any larger nest egg. The current cash value can be withdrawn at any time without a loan, but that incurs a tax liability for anything exceeding the dividends credited.


          • Here is the article I was referring to:
            Term insurance is not an asset on your balance sheet. About 97% of term policies never pay out. Whole life face value (minus withdrawals) remains an asset on your balance sheet.
            Comparing term and invest vs. whole life gives the following approximate result:
            If your investment returns 8% before taxes, whole life returns the equivalent of a 10+% taxable return.
            I don’t care if anyone reading this buys insurance from me; I just want the facts to be known so that everyone makes an informed decision.

        • You sound like an A.L. Williams/Primerica devotee, speaking in platitudes…everyone’s situation is different…and J Perkins – only an ignorant jackwagon uses ALL CAPITAL LETTERS when posting insulting comments…….

          • Nothing insulting here. At least that is not the intent. If you read some of the other posts, and you do the numbers, you might open your mind.
            Regarding the all caps, I just happened to have the keyboard in that mode. Talk about ignorant and insulting! My guess is that you’ve never even considered selling a term policy due to the commission difference. No one is more self-serving.

          • I am a Broker, appointed with a dozen major LIFE carriers. They ALL pay higher commissions on TERM. And this makes perfect sense when you remember that 99 of every 100 TERM policy holders OUTLIVE their policies. Then the drop them because the premium jumps 10 to 15x. This means pure profit for the insurance companies and it is the best game in town. This is the secret to how insurance companies can afford to build the largest buildings in many of our largest cities. CWL or custom whole life policies are paid up early, usually by age 70, and they grow your ‘deposits’ 2 to 6 times, depending on how long you live. They are the safest and best way to save AND you get FREE permanent LIFE insurance, tax free when you take ‘loans’ and tax free to the beneficiary. Also, I believe that creditors can not access the cash in most cases/states.

        • Hats off to you LLOYD for being honest enough to tell the truth about insurance. As a retired insurance agent I ONLY encouraged folks to buy TERM and invest the difference that they would have paid for a Whole Life or Universal Life Policy in an IRA!

          • I would like everyone to take care when listening to the educated arguments of those in competing industries. Malcolm, while correct on some points is OBVIOUSLY in the insurance industry so of course he will glorify investments and products he can sell. Nate IS correct on the market cap provision in IUWL agreements and that can and will make a huge difference in the returns an investor can realize. That said, Nate will be of an opinion that insurance products may not be as transparent nor offer the same return as one you could receive (especially in this bull market) by investing in the market.

            So on some levels they are both wrong, and both right. Also, with insurance contracts you do need to read the fine print AND be aware of all fees associated with that insurance contract/product.

        • Lloyd Freeman, it would help if you understood the uses of the tax shelters included in life insurance. You quite obviously do not. Further, not all insurance needs go away as we age. As to your blanket statement that term insurance is cheaper at all ages, try pricing term after your health takes a nose dive and your old term coverage, maybe convertible only to a mediocre permanent policy, is about to expire. Blanket statements by those who know a little are unattractive and counter-productive.

      • If you purchased an “Income For Life” policy , 770 plan, or any name given to the Infinite Banking Concept strategy that is a universal policy of any kind, you did not purchase the right type of policy as written about by R. Nelson Nash in his best seller Becoming Your Own Banker. All universal policies contain a cost of insurance chassis that is 1 year renewable term insurance which is the most expensive way to own life insurance. A dividend paying Whole Life policy from a mutual company is the way to go. The cost of insurance on these policies are guaranteed fixed for the life of the contract. With a universal contract you have to hope and pray the interest bearing account where the overfunded premium is directed stays ahead of annual cost increase of the insurance. If you are tying the returns to the market, variable or indexed, you’re adding another component of volatility that is completely unnecessary. Find an IBC practitioner here: http://www.infinitebanking.org/finder/. You’ll find me in CA and other states. should you seek additional answers or you can find someone who resides in your state.

        • John is right. The cost of insurance on a whole life policy is guaranteed for life. But what he either doesn’t know or doesn’t want to add is that the cost of insurance in a whole life plan is close to the maximum cost that a universal life policy. The psychology behind a whole life contract is “pay the fixed maximum amount and you’ll always have enough cash to borrow and death benefit if economic conditions go south.” The psychology behind a universal life contract is “pay a flexible amount and if you need to add more due to adverse conditions, you can.” If you contribute as much money to a universal life contract as you do for a whole life contract, it’ll perform just as well and give the buyer more flexibility. The only entities that won’t like that is the agent that makes less commission than he would if he sold you a whole life plan and the carrier which would rather sell a whole life plan to you.

          • I am reading and seeing everyone missing the mark!!! Why not have the
            Whole life and a cheap term policy in case you do pass on?
            To me this makes more sense than confusing us with these long drawn out if s and then I am not sure if any of this is true or just their opinion. I will be 64 in a few days. I just got
            a couple whole life policies. I have not had time to get with them to see if any of these policies will do what I hear being talked about. I am hoping so. I have a property I will be selling and any realized money above the mortgage payoff I am now thinking about
            doing a paid up policy on the smaller one. The rest put into one of the other two.
            Any help will be appreciated, however please be a informed person. Suggestions are welcome but please let me know it is an opinion.
            Thank you

        • John Montoya, your statement that ,”All universal policies contain a cost of insurance chassis that is 1 year renewable term insurance which is the most expensive way to own life insurance,” is naive. All whole life policies are built on 1 year renewable term, too. It’s just that they are hidden in the calculations done by the actuaries who build the policies. The death benefit costs in ALL policies are either term or built on term. I’m tired of typing this caution, but it would be nice if those who know a little would not pretend to know a lot.

      • Good luck with the Universal life. Universal Life is like pouring water (your hard earned money) into a bucket but guess what- that bucket has holes, These are hidden fee’s. NEVER EVER buy Universal Life Insurance. I am retired from selling Life Insurance. Always buy term and save (deposit what you would have paid for Whole Life or Universal Life in an IRA). So why do agents push Universal Life and Whole Life? Out of greed. Its called HUGE COMMISSIONS! All at the expense of YOU, the consumer.
        So with this system you have the BEST of both worlds. You have Maximum Life Coverage (so if you die early) and SAVINGS if you out live your expectations. Life insurance is GREAT, if you die. Someone gets it. But what if you keep on living? You darn sure better have some money to retire on. Alas, an IRA. If only young people would get this logic early on in life!

        • David, never fund an IRA. Clear by your comments you just follow the crowd and do not investigate alternatives. The only time to use a tax deferred plan is if the company offering a 401k matches 100%. Do not contribute one dollar above the match. If the match is 50% don’t bother, it will only help pat the 5 to 7 times the taxes you deferred by participating in the plan.

        • David A., It’s a good thing you retired. You clearly failed to understand life insurance very well.
          There are many circumstances in which term serves best. There are many others in which well-chosen UL or FIXED-indexed UL serves best. If you knew more, you wouldn’t pretend to know it all while making blanket statements that make you look foolish.

          • Yes, Ipsy, I do have. I have been selling whole life, universal life, fixed-indexed universal life and term insurance for over 45 years (or for as long as each has been available during that period). Contrary to some who speak as though they are authorities on this blog, I have made sure I thoroughly understood each. Many of the statements, some seemingly from the books promoting use of whole life, clearly indicate that the writer has big wholes in his knowledge. Whole life is not the best vehicle for developing and dispersing cash among life insurance products. The best is a well-constructed fixed-indexed universal life policy. Explaining this would take too many words for this forum and I’m used to being paid for these explanations. Again, I would prefer that those who write here make sure they know the details of their subject before advocating as if they are experts.

          • When, a moment ago, I mistakenly wrote “big wholes” in knowledge, it was not an intentional pun; it was just a typo. Of course, I meant to type “big holes” in knowledge.

  2. Mark Ford used a pen name when he wrote in the past, using the name Michael Masterson. It’s no secret really, although it may have been back then. The books he authored were the financial self-help variety.

  3. When I was young, Whole Life was THE insurance to buy for a family man. I bought a policy in college for me as a hedge against early death so my folks could cover the funeral and any bills I left behind. Early in my marriage we bought a small policy on my wife. She died 40 years later and that little policy paid for half the funeral (funerals are not cheap!) with cash left over that paid for some other bills. (The other half of the funeral was paid by other insurance.) The total paid by that little policy was perhaps 3X the face value.

    My own policy was a respectable amount, equal to the price of a nice house at time of purchase. It was (very) eventually paid in full, some loans taken from it repaid, now accumulating dividends and waiting for my heirs to file a claim. I am not really sure if I am worth more dead or alive? Sometimes there are ongoing things done while living that are more valuable than the cash that can be obtained with a copy of a Death Certificate.

  4. I sell this type of policy. I became interested when I decided that investing was too much like gambling, at least for core retirement funds. The company I represent currently gives over 6.5% in annual dividends and has matched or exceeded bond rates for several decades. When I considered the safety, the protection, and the ability to have tax-deferred growth and tax-free income in retirement, I decided I must tell all of my former colleagues about it. It is not a get-rich-quick scheme, but one can amass a large amount of money while remaining quite liquid.

        • I’m 68, in decent health, and plan to work for 5 more years. Have some investments through NWL, have some savings, am contributing the max each year to the company’s matching 401K (using a Back Door Roth) and the company is also offering a Profit Sharing Plan. I’m currently considering getting into a Fixed Indexed Annuity (7%) or perhaps a 770 Account/Be Your Own Banker type account. Initial investment amount would be $100-150K. All that said, I’m confused about the actual relative pros and cons of an Annuity or the 770 Account at my age. Any advice would be appreciated.

      • Charles, they are many top rated companies that have similar products with substantial growth benefits.. I personally have been in the financial services business for 35 years and founded my own company back in 1979.. Be diligent about the company behind the product
        find a “independent” adviser that works with the very best companies in the world and is not
        connected directly with any of them..If your interested in few companies, let me know.

        • Hi Ed,
          I’d be interested in knowing which companies that offer whole life plans that you think are reputable. Not only as a potential investment, but I am considering a career change and would consider selling such a product, but I’d want to feel I represented the best.
          Sheila Terry

          • The best life insurance is pure term insurance.Low cost, high coverage to protect against premature death of a breadwinner. Whole life is a legal rip off for the consumer. I would stay away from it. Has 4 terrible features that hurt the consumer. Go to the best .com and look life insurance. There you will find who is the biggest and best! Contact me for further info. I would love to discuss further with you about this subject.

          • Never buy life insurance as an investment! EVER! Get an IRA or put money in a Blue Chip stock Company that has a proven history. Like BX, EXXON, McDonalds, MO, PM.

          • Hi, just saw this thread and thought I’d comment. I work for a firm called Nowlin & Associates in Homewood, AL and we specialize in teaching individuals how to use Nelson Nash’s Becoming Your Own Banker. In fact, I am currently going through Nelson’s Infinite Banking Practitioner’s Program. For anyone that wants more info or would like to call me and talk about how you can do this for your family, let me know.

          • For those of you in Alabama and the southeast seeking more info on how to implement this strategy, call me at 205-440-4136. I work with Nowlin & Associates and our specialty is helping people understand and use this process. I work specifically with families seeking total control of their finances.

          • i would like to know the best life insurance plan to have my money liquid and grow at the fastest pace possible 3214033645

        • I’m 68, in decent health, and plan to work for 5 more years. Have some investments through NWL, have some savings, am contributing the max each year to the company’s matching 401K (using a Back Door Roth) and the company is also offering a Profit Sharing Plan. I’m currently considering getting into a Fixed Indexed Annuity (7%) or perhaps a 770 Account/Be Your Own Banker type account. Initial investment amount would be $100-150K. All that said, I’m confused about the actual relative pros and cons of an Annuity or the 770 Account at my age. Any advice would be appreciated.

      • I’am dealing with a insurance co oneamerica but it’s only 5%.do you have the name of your 6.5% company?

        • While Harold’s company may be paying a 6.5% dividend, be careful in expecting a 6.5% rate of return. There are other expense factors that must be calculated first, in order to determine a policy’s internal rate of return. That said, however, Guardian’s & MassMutual’s declared dividend this past year (they’re normally declared in November) were 6.90%-6.95%, which are the highest in the industry. These 2, along w/Northwestern Mutual & New York Life are generally viewed as the safest mutual companies in the industry. Check the company’s financials & ratings, and make sure you’re dealing with an agent you trust.

          • Joe,
            You are correct. When responding to requests for information, I have included the internal rate of return values for the policy and the PUA. However, one must also consider the face value in excess of the cash value, which is why a full policy illustration should be seen and discussed with an agent to get the complete picture.

          • I want to state that a dividend in insurance companies is a return of excess premium paid.
            It is not a dividend as in “on stock of a company”. Since it is a return of an overpayment, then the higher the dividend the higher the overpayment, it is not taxed. The gov’t cannot tax you on a refund of your own money.

    • Harold–I am very interested in this type of policy. please send me more info. on your co. type and costs and your contact info.
      Thanks, Joe

    • Dividends in life insurance is a refund of an overcharged premium. don’t be deceived people, get the facts. not a dividend like stock at all, simply a refund. O h and while we are on the subject, the reason this money is protected from the IRS is because it hardly ever exceeds what you put in thereby resulting in no tax consequence. Also if you want access to this money you have to borrow it from the company at interest. Or you can forfeit the insurance for the cash surrender value(cash value) who would knowingly do this???

      • Who would do it? Millions and millions of un-educated folks! People need to wake up, and do some research and NOT trust the brokers or life insurance agents. They are out for the commissions that they obtain from selling this junk (Whole Life and Universal Life).

        • Please remember one size doesn’t fit all. Also remember term and whole life has its pros and cons. Anyone that pushes one product over another without uncovering needs are doing a terrible job for the customer. For example, term insurance is only a temporary fix. Most death claims are not paid out from a term policy, because most customers out live the policy. Most people can’t afford term insurance when they are older. It may be good to have a combination of both policies. Again the customers needs should determine the customers best options. Not the agents personal likes.

  5. This may help to explain the “770″. It refers perhaps to a section of the IRS code. for PDF versions of these references, Google (or your favorite search engine) is your friend.
    1988 VOL. 40 PT 1

    Article from: Taxing Times
    February 2012 – Volume 8 Issue 1
    By John T. Adney, Craig R. Springfield and Adam C. Harden

    • No need to guess, really. Within the first minute of their video advertisement that has been making the rounds on the internet, they state: “The number ’770,’ by the way, comes from the IRS legal code section that allows these accounts to exist.”
      I subscribe to the Palm Beach newsletter, but I also THOROUGHLY enjoy from time to time reading the gumshoe approach and analyses Mr. Johnson provides.


        • Exactly. And for those just starting on their financial journey there is a far better way. First buy and sell from discretionary income(this assumes that you work enough and for enough(2 jobs if necessary) and that you have ended or curbed foolish spending. After accumulating sufficient capital for other investments(takes no more than 1 year); then investigate and invest. Remember what you should have learned from your buy and sell activities and take profits when appropriate and sell losers at a pre-determined point so they don’t hurt you.
          The wealthy make money from real estate, stocks, and commodities through capital gains(and other ways) and you should also. Forget tying up your money in whole life or universal life, CD’s, bonds, and unless you are over 50 or rich in IRA’s, 401Ks, etc. etc. as you cannot easily access your money or pledge these as collateral to secure a “sweetheart” deal(and they are out there, the millionaires buy them).
          In conclusion, you should strive to make your money grow through capital gains(long term capital gains are better but short term gains of 100% and more should not be avoided). This is how the rich became rich; they “invest” in these other things(whole life, jumbo CD’s, bonds, etc. afterwards. And so can you, but I advise only afterwards.

  6. The plan sounds more like a Variable Universal Life plan than a whole life plan. I had my brokers license years ago and could market these. Most of the author’s points are correct.. they are intended as a savings vehicle for those who know they are investing long term. Within the first 7-10 years, if you redeem (cancel) your plan, you are likely to lose everything you put into it.

    Over the course of time, the money can generate safe returns like any paper investment vehicle. This is because you invest your funds into the same vehicles as a typical 401k, with the option to also invest in money market type vehicles for some plans as well. The best way to think of this investment is as a mutual fund investment with a life insurance component tied in.

    You can typically take loans on these types of products and will have to pay them back just as you would on a 401k. In addition, VUL type insurance plans have advantages of asset protection. They cannot be legally confiscated by the courts as your bank account can. And they are excellent for passing wealth, post taxes, to your heirs. Since they are non-qualified (you purchase them with after tax dollars), you are liable for today’s tax rate and distributions should be exempt from taxes.

    I purchased a popular plan years ago and decided to redeem it. I lost my investment, but that is because it was too expensive for my income at the time. I had decided to go back to school and couldn’t keep up with contributions. This is not something I would look for as my primary investment now that I think back on it. I could think of many other things more liquid and flexible.

    BUT, if you need to put wealth in a long term investment vehicle that is protectable and relatively safe, these type of variable life plans are attractive. Just make sure you have your other retirement investment needs handled first, and the money you put into this type of insurance plan is ok to be tied up for a couple of decades, at least.

    More than likely, you will pass this money on to your heirs at passing. Because you specify the beneficiaries on the policy itself, these life insurance policies are not subject to probate and are a good way to enforce distributions of your wealth to the heirs that you want. Beneficiary designations are easier to change than on a typical Will document and don’t involve a lawyer.

    • Catfish…….Well I am 80 years old with a pacemaker and bad wheels. Sounds like this plan is for you younger guys and gals………right?

      • It depends on how much assets you have and how you have structured their passing to heirs when the time comes. If you are above your means and have some stored away it might behoove you to put some of those assets into something that will directly pass to them and avoid probate. I know when I reach that age if I am in a position to I will want to shave things down to the necessity and pass the rest taking advantage of as much tax loopholes as possible that would benefit my heirs.

        • You bring up a great point with age being a factor. Certainly, if you are found uninsurable then that would cause you to need to look at Plan B. Which, still gives you full control of the money or “banking function” of one of these policies. Such as being the owner of the policy on your wife, kids, or grandkids. Any of these are great ways to still consider a “770 Account” as part of your strategy. If you need more info, feel free to contact me as I specialize in doing these types of accounts for people here in Homewood, AL with Nowlin & Associates.

          • Sorry, I haven’t posted on this thread in awhile. I actually specialize in helping families learn how to use this process in Birmingham, Alabama. However, I’m open for helping anyone in the country and would be happy to setup an online webinar with anyone wanting to be educated on this process. As always, feel free to call me at my office at Nowlin & Associates at 205-440-4136 or email me at dustinwelborn@nowlinandassociates.com.

    • I have held permanent life insurance since I was in collage. I bought $25000 at age 19 and the payments hurt a little but I made them faithfully and the 5th or 6th year my cash value exceeded my total premiums paid. I had a chance to buy into a business in 1973 and borrowed against the cash value at 5% when interest rates were at 12%. Whole life policies have times at which you can purchase additional insurance without question of insurability.
      Fortunately I have never had that issue but if you were married with children and became disabled you could increase your insurance amount and the insurance company pays your premium as long as you are disabled. I have used the borrowing ability of the insurance on several occasions and it is invaluable.

      My suggestion is that you find a Northwestern Mutual Life agent in your area and get all the facts. They have been in business for over 100 years and are best rated at the top.

      This is a forced savings plan and if everyone did it there would not be the clamor about the pawltry payments from social security. Your 401K is still a good deal as you are not taxed on the money when you put it in but you are when you take it out, and you are forced to take it out beginning at 70 1/2. If you are a professional and done a good job of investing and saving you will be in a higher tax bracket when you retire than you are now and that can cause you all kinds of issues like paying double medicare payments and double part d payments and did I mention higher taxes? This investment may not be right for everyone but it was instrumental in my success.

      • Jim all valid points. One addition point is some companies let you borrow, typically up to 50% of the cash value. True you still pay interest on what you borrow but it goes back into the policy. The truly interesting part is you still get the dividend on the WHOLE cash value, not the Cash value less the loan. What happens is you end up adding both your interest and the policy interest to the account value. Also hopefully you are employing the capital you borrowed in another investment or business to get better return, the same as you would if you got the loan from the bank.


        • Doug, While policy loans are collateralized by the policy cash values, the policy continues earning dividends on full value because loan comes not from policy but from general funds of ins co. Loan interest does NOT go back into your policy but into company general fund. As a policyholder of a mutual company, you are also an owner of the company, so you indirectly benefit from loan interest you pay back, but not more than the dividend you receive. In today’s market climate, most top companies pay a higher compound dividend rate than the simple interest rate charged on policy loans, so being your own banker is realizing a net profit by borrowing from your own ppolicy (collateral)

  7. Travis, thanks for the info. on 770 accounts.
    Harold, are there any advantages to using these types of accounts for retired “seniors”?
    That is to say can you fund it with large sums of money? Would it be worth it, or would
    the premiums “eat you alive” for someone who’se retired?

    • These policies should be held 20 years or longer to really take advantage of the savings aspect. I also offer annuities for retirees that currently pay 6% during the accumulation phase. However, you can purchase a single-premium Whole Life policy with a lump-sum payment. It can be beneficial to hold an annuity and a WL policy together. Each person’s situation must be evaluated before choosing a course of action.
      Having the WL policy as your last source of retirement income can allow you to take as much as 35% more income from your other assets first without having to increase your nest egg. This is significant!


        • If you can invest consistently enough to fund your retirement, more power to you. I tried investing for years with the help of professional traders and found it to be too risky.
          These issues are complex and should be explained on an individual basis. I am not in the business of converting every skeptic; I just need to explain it satisfactorily to my clients.
          Also, someone mentioned rising interest rates. Policy dividends in the mid 1980′s exceeded 13%, having risen with bond rates.
          Here is another resource:

          • Harold, I’m not responding just to be the skeptic. I just want solid factual answers before I invest. If the numbers add up, I am all for it. That being said, I’ve been able to invest for the past 40 years without the assistance of a “broker”, in that most anyone can read a financial statement and keep up with the general economic situation in the Country (or worldwide), and make sound investment decisions, I assume. Most successful investors at retirement age have a huge tax problem, and that is the priority I have at this point. While setting up a family trust will solve some inheritance problems, there is still the issue of paying large sums of taxes in retirement and not having to liquidate other investments. No one has addressed that in this blog. If they have, I haven’t found it.
            I would appreciate anyone’s thoughts on this.

        • Jesse,
          A whole life policy is funded with after-tax money. Its advantage is that growth can occur tax-deferred and be accessed (or passed to a beneficiary) tax-free. If you have a large amount of money and only a few years for additional growth, then the policy won’t help you.
          However, you can buy a single-premium policy to transfer the wealth to a beneficiary, but withdrawals by you could incur taxes. This policy removes the money from your estate for distribution, but it is included in calculating estate taxes. It does protect your principal from market fluctuations.
          Life insurance is a conservative, safe way for people with years before retirement and who do not want to monitor investments to accumulate retirement savings.
          (I replied here because there was no reply link for your January 9 comment.)

  8. Rog, based upon what you wrote, this would appear to be a good vehicle to avoid the
    “death tax” associated with probate, or are their legalities preventing parents from funding
    these with their assets before joining “the happy hunting grounds”?

    • Franklin, One should think twice about worrying about the “death tax.” Federal estate tax cannot touch your first $5,000,000; that’s $10,000,000 if you plan using your exclusion and that of your spouse.

  9. These are WHOLE life policies as Harold explained above, not Variable Life Policies. And they are explained in detailed as Tom Trump says above in R. Nelson Nash’s book (been around for years). This type of policy is getting a new resurgence because of the potential for government intervention into 401(k)’s and IRAs. And it is another alternative that is available for wealth growth – although it isn’t for everyone. It is in fact one of the only investments that is tax-free going in and coming out, but that’s because you use after-tax dollars to purchase the life insurance policy. I started one of these accounts when my daughter was born and she is now 20 years old. However, if you only put in a minimum amount, it takes awhile to “Be Your Own Banker” with what is in the account even after this long. You have to put in more than what I did for her to be able to use the account to by cars, etc. It is an incredibly useful tool, however, if used properly.


      • Since insurance companies invest primarily in investment grade bonds, they are able to adjust policy dividends to prevailing interest rates in the market. Dividend rate adjustments usually lag the market in both directions when rates first change, as the ins companies are reinvesting the proceeds from maturing bonds at prevailing rates

      • The comments that I have been reading are a mixture of everything ranging from popular misconceptions to extremely correct explanations of a situation. I have been a CLU, Chartered Life Underwriter, ChFC Chartered Financial Consultant, MAAA Memeber of the American Academy of Acturies and several other professional dsignations after my name for forty years. I suppose that I may add soething to the pot. The whole life policy, INDEXED, cannot ever go below the stated guaranteed level and verfy likely may also have an excess unguaranteed amount. The VARIABLE life policy has usually no guarantee of minimum value (although some variations may). Term insurance may be bought for coverage for life (sometimes capped at 100 or 120) and you may invest the difference. Unfortunately, the premium rates when you get into the 80′s, more so in the 90′s and don’t ask about the 100′s are in excess of any value to you and woulod eat up your entire accumulation in your investments outside the policy before you die – especially with to-day’s rapid increase in life expectancy. There are a few excellent companies to choose and we usually run an illustration on five companies for any partiular client so that the best plan is selected – not always from any one or another over the others – each situation can vary. I am presently licensed for insurance activities in New York and New Jersey but can easily arrange with a licensed agent in most other states to give uou advice. An aside example – one of my clients recently died at age 95 and one of his grandchildren for whom he had purchased a policy in 1978 or 1979 for an annual premium of $7,000 which he paid for seven years with the proviso that all diovidends be used to purchase paid up additions and the additions to be used as a source for all future premium payments, phoned me and asked if the trust holding the policy could be drawn on. The result is that the over one hundred thousand dollars in the trust would be available to the new trustee for the use only of that particular grandson. He said he would use it on the down payment for a NY City apartment. The current interest environment is a challenge but exceptional results can be obtained. Policies can have added benefits sych as guaranteed purchase optiions, waiver of premium for disability, long term and home health care and more – depending on the insured, the company, the coverage chosen . . . If you would like to talk to an expert in these fields of financial knowledge, harlind@optonline.net is my personal email address. I am always willing to help. If there is a commission or fee involved, there are no secrets. I disclose those that are known to me. Harris Levy

        • I have to add some points. The cash value in a pure insurance policy is used as a reserve to pay the cost of the term coverage each year as time progresses without changing the payable premiums. This premium is actuarially caculated to include the annual cost of insurance, expenses and profits and is then projected out over the period of stated premium payments or if none involved then life expectancy. The money is not your money nor does it belong to the company. It is part of the reserves which insurers are required to hold to back up payments to insureds or beneficiaries. Upon request, the ownr of the policy may borrow from the company using the cash value as collateral or he may cancel the policy for the release of the cash value from the company or he may sell the policy under certain circumstances for a sum greater than the caash value. True whole life is what I would more likely than not suggest to accomplish the stated purpose but I was responding to the posts about variable, indexed or term. The ownership of the funds in these policies are also not directly those of the policyholder but their relationship to reserves may have varying formulae. Typos are the result of carelessness and are not the usual trademark of the author. harlind@optonline.net

  10. Tom is correct. Read the book Infinite Banking by Nelson Nash for details or visit the website at https://www.infinitebanking.org/ for more info.

    Couple of points:
    1-It is nothing like Variable or Universal Life. It is a Whole Life Policy using a Paid Up Additions Rider. (This rider is not often used as it significantly reduces the commissions payable to the agent….)
    2- It can be used effectively whether you are young or not so young
    3- If you believe that banking is one of the most lucrative businesses on the planet (as I do), then why would you not wish to be your own banker? The life insurance policy is just the vehicle that allows you to conduct honest banking activities. People generally have a much greater need for financing during their lives than they have for a death benefit!
    4- It is not for everyone. You must be able to avoid many human pitfalls such as conquering Parkinson’s Law to succeed. This is one reason the wealthy embrace many of the attributes of the Infinite Banking concept. Maybe that is how they became wealthy in the first place.
    5 – Even though the dividends do average 5.5 – 6.5% with favorable tax benefits and the death benefit is substantial, these are just considered added bonuses to the Banking aspects of the plan.
    6- Most importantly, you must start with a good Coach who will set up a plan and work with you monthly on achieving your goals. Typically, the goal is to reduce debt and become financially independent. The light bulb will go on about a year into the process.

    There are always skeezy people who take a sound product and try to turn it to their advantage…… so check out the website if you are interested and find a certified individual that can be your coach.

  11. These Palm Beach guys are the absolute best that I have ever subscribed to. I only wish that I had bought all their recos and stuck with their advice. I would be a whole lot better off. To see people quibble about the price adjustments of their letter is a laugh considering the money one could have made following them.

  12. In my Youth I used to sell MF and Term Life for a very large Financial Panning Company. The pitch was “The problem is whether you will have enough to live on when you are 65, and 4 out of 5 will live to be 65.”

    I guess my point is that Annual Renewable Term Life (ART) is ALWAYS the best, never buy Whole life or Pay to 65 or to 80, etc. Maybe level term (LT) is second best. In whole life, sure, the money is there for you to take out after 2 years, but you will be made to pay interest for withdrawing your OWN money to use. See the “whether” problem again, above. Good luck in getting the above best “kind” of policy facts from an Insurance agent if they need to sell a policy to make a quota for the company. ‘Nuff said.

    • Annual Renewable Term is the worst. Please explain why you would advise ANY client to pursue a policy who’s costs rise every single day they age? And to anyone at all interested in learning about the “770″ or “Cash Flow Banking” or any other term you want to call it if you use a Universal, Indexed or Variable product you will not be in the right product. And to any agent on here who would suggest for a minute that a true Infinite Banking professional is trying to reach a quota and make high commission goes to show how painfully ignorant their training has been. Properly structured IBC policies are very low in commissions because the majority of the premiums goes toward CASH. The client’s CASH. We keep the cost of insurance as LOW AS POSSIBLE in order to allow for the highest rate of cash growth. And…the only time I think term insurance is a good purchase is when it’s used inside of a whole policy so it can be used to inflate the Modified Endowment Contract line so my client can contribute to more and more CASH–NONE OF WHICH any agent would ever get compensated for.

      • I would really like to speak with you about the best product available for my scenario. My income is not great, so, i have to be very selective with where it goes. Can I contact you about your insurance products?


  13. The best investment I ever made. It is the first investment every young man or woman should purchase. In addition I purchased two policies for my youngest at age 12 and is now 43. Check the actuarial tables to see what the multiplier is on $150K and what the cash value is now. It guarantees he’ll have a retirement.

    • Dear Sirs,
      Beware. The accumulation process everything looks fine. As long as you leave the cash value alone everything will be fine. It is when you go to get into that money is when the problem begins. You will pay interest on the loan physically or the loan will start compounding and will start knocking the socks off of your years of gain. I was in the business for 35 years. The way these policies were sold was that if you wanted to borrow money out , no tax because it is a loan and that if you did not pay the loan it would just go against the face value of the contract. Loans would probably work if you were to take minimal loans but forget about a big loan for it will destroy the contract and cause a taxable event. I have seen it happen time and again. Regards, Larry H. Wyatt

  14. I can’t complain regarding the payout of an annuity which I purchased years ago. Possibly a ordinary life would have been better, but this payout is nice because I am living past what the insurance company had figured. It’s not a big deal, so I probably don’t need to be concerned about the insurance company assigning a hit man to me.

    However, now I would hesitate to get a policy because the USA government needs to devalue the US dollar. I realize that insurance people don’t like anyone to mention inflation, but with the trillions of QE in process, halving purchasing power is right around the proverbial corner.


      • There is no product that is right for everyone. If a person makes it in the financial services industry long enough, he/she will agree. For the right person and situation, it can be proven beyond a doubt that a dividend paying whole life policy overfunded with PUAR can create more tax free income and more safely than other methods.

  15. As a member of the PBL and PBL wealth builders club I can tell you that you are 100% right here. Whole life insurance with paid up additions. The whole concept can be read in the books recommended here and I would definitely take a policy myself but I am not in the U.S. and therefore they can’t help me. Apparently only U.S. based companies have this concept. Maybe I will book a trip to the states and set one up once I got a steady income again :p
    One you subscribe you can choose between 3 different agencies who can help you set it up as they have a ton of experience. You also get access to many explanations and webinars to tackle all the concerns one might have. Good luck.

    • remember that most people that write these policies on there children will be the person that has the control of the money too. So why not use the younger healthier person to get the cheapest rate then As the younger one grows show him how to borrow responsibly against the policy instead of paying a bank or worst yet a loan company interest?

  16. Any insurance policy OTHER THAN a Term policy should NOT be considered as an investment vehicle. Period. There is nothing more to debate. What economics classes did you go to? This is supposed to be an investment letter, not choosing the right type of Insurance. And anyone buying an insurance policy for a dependent child is not thinking. A child is not an asset, they are liabilities until they start earning money in society. You insure against the LOSS of an ASSET. You do NOT insure against a loss of a liabilty. Think about it before you write… your brain is showing. OMG

    • Truman….read the book and then you can offer intelligent comments for the readers of this blog to think about. Selling policies in your youth does not qualify you as an expert in the insurance field. I did the same thing and didn’t understand. I still invest in the market but do it through my personal Bank (whole life policy with paid up additions rider) and will always make 15 – 20% better return than you on the same investment. Again, it is not for everybody but it does work well when you learn the concept.
      By the way, I got my economics degree with honors from UNC and still can’t believe how long it took me to grasp the power of this concept. 99% of insurance agents don’t understand it either…. There is no debate here. You are incorrect and until you study the concept, you will just continue to be part of the uninformed masses.

      • Buying a WL pollicy with PUA rider for your child makes exellent sense. You get the advantage of the savings aspect with low insurance premium overhead. You can get a policy for your child up that is up to 1/2 your policy’s face value. The child’s policy remains your money for your entire life if you so desire. It is also an excellent alternative to a 529 college savings account, because there are no associated restrictions or penalties.

      • I too subscribe to PB and it’s the best info I have ever received. I just bought my first WL policy at 57. Wish I had known about it at 27…and I’m a smart guy. So as Joe says you have to really understand the benefit first. It’s not about all eggs in one basket anyway, is it. I have term until 80 too.


        • I bought into a whole life “life insurance” policy years ago when in my early thirties.
          I added my wife as a rider for a minimal amount . When she passed away at age 52, I collected around 84k and my policy continued ( I was still on the policy). Since retiring at age 58, I cashed in and collected another 24k and paid cash for new vehicles. It’s life insurance with frosting. I didn’t plan my wife’s death but like the agent told me It was a way to get back something before dying. I was lucky in that I never had to borrow against it and I wasn’t one of the 97% who eventually had something come along that would stop the monthly premiums and therefore end a term type policy. If a period of bad time came I long I would have made some payments with a borrowed portion… Any one with money saved up doesn’t need life insurance anymore.


  17. Complexity tends to favor the seller over the buyer and policies are all but impossible to compare to each other, so the devil is in the details of guaranteed returns, fees or commissions, your expected inflation rate, your actual insurance needs and the “what would you be doing with your money otherwise” questions. There’s a pretty good article from the WSJ here if you want a more mainstream opinion: http://online.wsj.com/article/SB10001424052702303296604577450313299530278.html

    The interesting factoid from that article: according to a survey, almost 40% of people surrendered their whole life insurance policy in the first ten years, presumably, in many cases, because they couldn’t handle the large payments anymore … so if there’s a decent chance you would do that, it seems like whole life would be a really bad choice — you’d be losing out just before any likely cash gains from the accumulated dividends of a mutual insurance agency start to overtake the costs of the commissions and the insurance.

    • The approach of the organization I work for is to find reassignable cash flow to fund the policy, so that purchasing it has no effect on lifestyle. We diligently try to prevent the possibility of premiums becoming burdensome. We want lifetime clients, because we provide service first and products second.

      • @Harold, Hi, do you have contact info of your organization? I’ve had a WL policy for over 40 yrs. My paid up additions that were supposed to keep it afloat until my death, have fallen short due to economy, and I’m finding the newly required annual premiums hard to make. ANY helpful info is appreciated!

    • Travis,
      Dan Ferris has a new world dominator stock at Stansberry Research. Perhaps you can search that one out.


  18. I cancelled my term life policy and am buying the insurance ETF IAK with the difference over the next 5-10 months. I say better to own them then be owned by them! ;)

      • ETF is “exchange-traded fund”. IAK is the iShares U.S. Insurance exchange-traded fund. So Randy is buying a “basket” of insurance company stocks. Currently it yields 1.45% according to finance.yahoo.com. It dropped dramatically in the 2008 downturn.

        • Yeah and if you held it then through today it has over 112% gain in that period, so what?! In my opinion a balance of Index Funds must perform better over time through the ups and downs then some basket of an insurance company’s profits. Everyone wants to avoid taxes, sure, but really it is a grey area which will get regulated more and more so why not just do the best you can and pay your taxes.

  19. Most of the comments about whole life are true. The website “bankonyourself.com” has good information as does Nelson Nash’s book. However, the way to actually put your insurance policy on steroids is to “borrow” money to pay for cars, vacations, home improvements, etc. What you are doing, is borrowing from yourself (you are a shareholder of the company) and then you pay yourself a very large interest rate, about 6.5% to 9% as Nelson Nash advocates. When you pay back your “policy loan” the interest paid back goes back into your policy. Also, the dividends that you collect once your policy is paid in full is non-taxable to the amount of money that you actually contributed. The fools in government have not figured out a way to confiscate this yet, but they may. Additionally, if you are a small business owner, one of your monthly expenses can be your payments to your whole life policy, thus reducing your taxes on your on your gross income by having the insurance premiums as an expense. There are a lot of positives about this type of policy. The major drawback is the monthly cost is not cheap. I recommend the book “Becoming Your Own Banker” by R. Nelson Nash. Here is a link: http://www.amazon.com/Becoming-Your-Own-Banker-Infinite/dp/B001NZO1DS

      • Tim is Absolutley right. I have had one of these policies for just under a year and got it so that I would be able to use it as my retirement. I have borrowed from myself twice already- first time to pay for a vacation the second to pay an unexpected ER bill for my son. In the past I would have saved up to pay for the vaction enjoed the vacation and then started all over again to be able to pay for the next vacation. In the situation with my son we would have paid with a credit card. In borrowing from myself all the principal came back to me and all the interest so the policy grows more quickly. Definitely recommend anyone check this out.

        • Ann, is your policy with Bank on Yourself or with Lafeyette Life directly? Is it The Marquis Centennial Indexed Annuities or The Group Marquis Centennial Indexed Annuity & Group Marquis Flex Annuity?

          • Bank on Yourself is a marketing organization. Pamella Yellen markets information. If you like what she has to say she will refer you to an agent who can help fulfill your plan. Lafayette Life is one of the four major providers of IBC policies (or Bank on Yourself) Never, never, never use any indexed or variable product. ONLY use a permanent whole life policy. Depending on your age a Lafayette agent would most likely consider the Patriot 100 or the Heritage. You cannot use an annuity for “banking” purposes.



  20. Universal Indexed Life Insurance. They pay interest on your policy based upon an index. Mine uses S&P 500, it has min and max caps at 3% and 14% respectively. They do not invest your money in the market (at least my contract says that is not happening) they merely use a specified index (many, many diff ines avail) to pay interest on account. Once you retire and take disbursements of all monies that you supplied as principal, they then “borrow” money from your earned interest and then “loan” you money at a slightly higher interest rate than what they pay you on the money they “borrowed” from you. The gov’t does not tax “loans” so you get access to the accrued interest on your acct tax-free.. take THAT IRS_S !! My plan also allows me to “borrow” against the death benefit and whatever is left when I do die goes to beneficiary…take THAT Kids lol

  21. PBL calls this “Income for Life” and yes, it is a method of using whole life insurance from a mutual life insurance company as an investment vehicle. The key is the ‘paid up additions’ as noted. The IRS allows a policy owner to add to the investment portion of the policy up to a point (depending on the size of the life benefit portion of the policy). If you put too much into the investment portion of the policy, the whole thing becomes a “Modified Endowment Contract” and thus, taxable. As noted earlier, this is a long term investment, as are most of PBLs recommendations. Not many mutual insurance companies do these type of contracts and PBL supplies a list of several agents they have vetted. It takes a while to understand the concept, but once the light bulb goes on in your head you’ll realize what a solid investment this is.

  22. As a life insurance agent active for about 18 years, I sold whole life as my bread and butter product. I believed in it.

    I bought the book Infinite Banking and even went to a 3 day workshop by the author mentioned in the comments.

    In the final analysis, I do NOT recommend this approach. The commissions and fees you pay in the first year often result in ZERO cash value in the account and it takes at least ten years to start making a profit. I used the cash value in my account to buy some gold and found out that the loan interest of 8% was not really like that, it really ate into the returns of the account.

    Plus if you invest the money using a loan, you are essentially using margin. The loan has to be paid back, or you must pay taxes on the ‘forgiven loan’. Lots of insurance policy owners have been caught with huge loans that were used to buy assets that went down in value, but they still had to pay the loan back.

    I saw policies that were 50 years old that had earned about 5% over time. Not bad, if you are willing to wait 50 years. But the main problem with these policies is that they are debt based. Over time, people have gotten really screwed when inflation corrodes your purchasing power.

    In my opinion, a better bet is a dividend reinvestment plan with one of the huge consumer nondurable companies like Johnson and Johnson or Colgate or Proctor and Gamble, that have increased dividends for decades on end. As long as people buy toothpaste bandaids and soap, these companies, with little debt and long dividend histories will exponentially outperform any life insurance policy.

    That is my conclusion.

    Once you reach a certain amount of equity, above, say, $100,000, you could also set up trusts like a Charitable remainder or Charitable lead trust that have tax advantages.
    Whatever taxes you don’t pay in a life insurance policy will be more than met by the fees that the broker, his manager, his manager and the rest of the Home Office parasites make.

    Eric Arnow

    • Eric, thank you so much for posting. I’ve been reading dozens of replies trying to assess whether this would be of benefit to me. I now understand that in my particular situation, (age 60, few assets outside retirement accounts), it would almost certainly not be.

  23. Well I didn’t know this was called a 770 account but I do know you can be your own banker through Bank On Yourself sponsored by Pam Yellen. This is where I found the info. Then from there I got in touch with Peter Garcia. He is with “The Legacy Group” which is an advisor for Lafayette Life Insurance Company. Here is some contact info and feel free to let him know I sent you. No I do not get any kick backs…. I believe it is one of the best ways of protecting your wealth or retirement.
    CONTACT: pgarcia@mylegacygroup.com
    PHONE: 954-446-6696
    FAX: 954-252-2076
    I hope this helps….

    William Cosgrave

  24. On top stock insights sign up page they talk about a stock to rise ’cause Apple is releasing a new iphone 5s this company has something to do with data transfer or thru put any clue which company they are talking about thanks for the insights Daryl.

  25. I have a $500,000 policy in a irrevocable trust which will expire worthless when I reach 85. I would like to take the cash value but I understand I would have to pay taxes on the difference at full rates. Any suggestions? I am now 73 years old and in fair condition for my age but don’t want to take a chance on living to 85.

    • Whole Life policies don’t expire worthless; they are worth their face value at death and also have a cash value before death (both values minus unpaid loans and accrued interest). Regardless, you have a trust, so you need to consult an attorney who specializes in trusts.

    • Giles, Do a 1035 exchange into an annuity and you can let it accrue or you can take monthly payments up to 10% annually. i would pesonally only take 5% if you need the income. If not let it grow. Choose one that goes to your spouse 1st then to you heirs. I would love to speak to you about this. Thx

  26. Giles,
    I would suggest checking out some of the discussions on LinkedIn’s Infinite Banking Forum.

    Our company Accelerated Wealth has many solutions that apply to all stages of life planning. We do not charge any fees and zero of our clients have ever lost money.


  27. Versions of universal life–typically indexed or variable from a seasoned and good carrier-combined in a combo approach with a whole life policy from a good mutual carrier (and where most of the premium is going into the paid-up additions rider instead of into the base policy), is the best way to accomplish this. The hold pattern is at least 12 years (especially in this low-interest rate environment), and will require a lot more management attention than your insurance/securities sales guy will mention (80% of they themselves will be at a loss to help you). Buy from the right carrier(s), in the right combo, and funded properly, with maintenance, and you have a good chance of being successful, as are many of my clients. As with much in life, 80% of the carriers, 80% of the products, and especially 80% of the advisors are useless in this strategy.

  28. I have been in this business for 54 years an have a plan that pay between 3 to7% per year and guarantees you your principal back after the first year with no penalty.
    Mr. White A LONG

  29. I have been in this business for 54 years and have a program of this nature, it pays 3 to 7% per year and you can get after the first year with out any fees. so Mr. White as long as you can put in $50,000 per year you can get in this program. It will grow tax free and it can not be attached by creditors.

  30. Randy, that is the number that makes it work. As mentioned by Mr. Johnson these policies are designed not so much for the insurance as they are for the saving. And you take the person that is in a high tax bracket that will be like making 8 to 9%.
    The term used is institutional investing, larger returns.

  31. Hi Travis et al,

    Long time reader though I don’t comment typically. Just wanted to clarify the conversation above on life insurance dividends. And this is coming from someone who likes the product and think the benefits are good. For full disclosure, I am an independent, comprehensive financial planner who runs an MA-based Registered Investment Advisor firm (RIA) and insurance agency.

    6.5% “dividend” mentioned above needs clarification. What a life insurance dividend is, is not a straight 6.5% yield on the money you put in the contract nor is it 6.5% on the cash value. It’s a rather convoluted insurance company formula that explains what the company earns net of insurance costs (there are multiple inputs into the equation). FYI: Here is Ny Life describing what a “dividend” is:
    http://www.newyorklife.com/learn-and-plan/life-insurance-dividends (disclosure – I have no affiliation with NY Life; their products are sold by their own agents)

    So even though I like the product, we need to clarify what we are talking about because some of the people replying answered as if their understanding was that this meant 6.5% on their money. Over a long period of time (less if you go with no load insurance or low load), you will realize decent earnings (the low rate environment affecting bonds has affected insurance company dividends too).

    Furthermore, in this environment, with very high interest rate risk, and with many of these insurers having a majority of their general account in bonds, it may make sense to go with the safest insurers. By that I would personally prefer highly rated mutual insurers (stock insurance companies serve 2 masters, mutual companies are theoretically “owned” by the policy owners – that’s why many policy owners in Met and Hancock got stock in their IPO’s).

    To keep costs down and returns higher, go with low cost policies if you can find one in conjunction with the above-mentioned attributes. Or find agents who don’t want to gouge you, or hire an insurance advisor and get fee-based insurance advice. In fairness to full service agents, some of the best companies will still pay out fairly well over a long period of time even if the upfront costs are higher on policies sold. The best policy and suitability of the product really depends on the situation of the person looking.

    If you want follow up info, hit up my email in the link.


    Chris Grande

    • Chris,
      Thank you for the clarification. I am new to the industry, and I couldn’t articulate it as well as you did. When people contacted me for information, I provided them with the internal rate of return for PUA and for premiums. I give clients the amount of PUA that works for them, regardless of the effect on my commission.

      • Believe me Harold, I don’t understand everything either – these products take a specialized team which is why you (as well as I) likely use a team of experts either at the insurance company or through an insurance agency (or both).

        Keep up the honest work,



  32. In addition to what has been discussed here I am interested to know more about the process involved in borrowing from the cash value of one of these policies. I understand the loan will look like a typical loan (auto, home, etc…) with a term, interest rate, and so forth. I have been told that if the insurance company is non direct recognition when there is a loan out against the cash value the company will stilll pay dividends based on the original cash value. I believe this means the cash value remains the same as a capital basis and for calculations while the loan is a separate thing. And I can gather that the interest paid on the loan on your cash value goes to offset and/or pay with profit the difference between the cash value of the policy and the amount of the loan outstanding. Please shed some light those who are in the know. Thanks.

    • Hi Randy,

      You got it pretty close. Often the interest on the loan is a tad higher than the interest earned on the CV. Have an agent run an illustration for you and make sure you look at the “guaranteed” numbers as well as the “current” numbers. Since final illustrations are considered part of the contract, they will give you an excellent picture of what to expect.



  33. I have a whole life policy form State Farm Ins., and I receive a 1099int each year around Jan.5.
    I my case this interest is taxible. Prior to the Clinton administration I received a 1099div on this same whole life policy.

    • Statefarmer, You’re receiving 1099′s on interest accumulated on dividends held by the company. If you just let the company send you your dividends, there would be nothing taxable.

  34. My husband and I have been married for almost 24years. My husband’s father purchased a couple of these “whole life” policies when he was a child. When we got married, my husband purchased a policy for me and more insurance for himself. When our grandkids were born, we purchased policies for them as college funds. (My kids were a bit older when we married so we didn’t purchase policies for them.)

    Our oldest grandchild is 12 and her $25,000 policy is already worth about $4,000. We’ll pay for these policies as long as we live. We’re not rich. We’re very middle income. The cash value of mine and my husband’s policies is over $100,000. We’ve borrowed from the policies to build one home while we waited for the other home to sell and done other things.

    The trick is that you have your premiums automatically deducted from your checking account AND that you always have the discipline to pay yourselves back when you borrow from the policies.

    This is not just for the super rich. Start early with a company that has been around a long time.

    • Don’t be fooled by obtuse and cryptic ad copy designed to excite and beguile.

      There is NO SUCH THING AS A 770 ACCOUNT in the Internal Revenue Code.

      SECTION 7702 of the IRC defines what life insurance is and how it is defined and regulated and taxed.
      Likely this promoter simply left of the “2″ in order to make his claims have more curb appeal.
      Yes, banks, buy large amounts of life insurance for tier one capital in order to fund executive benefits. Those products are specifically designed products for a specific market niche and they are typically not whole life products. When life insurance is purchased for this reason it is not as an “alternative investment” — life insurance is purchased in these instances as a HEDGE — the life insurance DEATH BENEFIT allows the corporation to RECOVER post-retirement and post-employment health and welfare benefits paid to retired executives at their death. In this way the institution funds the aforementioned payments made to executives according to their employment contracts.
      Life insurance is an extremely efficient hedge because when an institution or an individual buys the RIGHT type of life insurance they are buying a portion of the scale of the insurance carrier as well as playing the mortality curves to their advantage.
      Don’t think of life insurance or annuities as “investments” — they are not. They are a HEDGE against risk, illiquidity, prolonged life and premature death. Consider life insurance to be a ‘put” and an annuity to be a “call”. When you own both as an overall component of asset allocation you are playing BOTH sides of the mortality curve and capturing the delta for yourself.

      • Always read the fine print when you purchase any long term “investment”. I’ve never heard of whole life insurance called a “770 account” until a couple of days ago when I read an article on one of the blogs to which I subscribe.

        If you are careful and you are working with a reputable company and a reputable agent, whole life is a good investment. The policy that my father-in-law purchased for my husband when my husband was 4 or 5 years old had a death benefit of $3000.00 and today it is worth about $12,000.00. The payment was very small ( back in the 50′s ) and now it simply accrues value.

        When deciding on whether this type of “investment” is right for you, the key word is REPUTABLE. Any company that tries to tell you that in 10 or 15 years the policy pays for itself is NOT being honest. And always consider the death benefit vs. cash value. You are buying insurance. Whole Life is good for as long as you live (and pay the premiums).

        There’s really no mystery. Calling it a “770″ account and creating a sense of secrecy is just a way for the “blogger” to sell more subscriptions to his blog.

        You are right that purchasing an annuity is advisable if you can get an interest rate that outpaces inflation but today’s interest rates do not encourage me to do that. I had an annuity that was purchased at 4.5% 5 years ago and when it matured, the Life Insurance company that held it only offered me three tenths of one percent to renew it for another five years.

        So TIMING is critical when deciding on any investment purchase.

        And always research “hooks” independently before paying for access to a blog.


  35. Come to your own conclusion: upon graduation from high school, my parents could not afford to help me much with tuition (farmers) for college. My mother had a grade school thru H.S. friend who sold insurance. He suggested a whole life policy for me as a graduation gift. Not much to initiate the policy and the bi annual premiums were affordable for me as I held 2 jobs while in college. True to form, this very reputable company sent me a letter 24 yrs. later stating that if I did not increase the amount of my premium payments..ie- buy more insurance, my policy would be cancelled as it had no cash value remaining that would continue to finance earnings on the account or maintain the death benefit. (Income was guaranteed at initiation and we were told that at some point I would’nt even have to pay a premium as the cash value would even take care of that!). We were told that this policy was a great start to a DIVERSIFIED RETIREMENT PORTFOLIO. I’m a realist. I know if it sounds and walks like a duck, well it must be a duck. I NEVER missed a premium or was late with one, EVER! I did without to make sure the months the premiums were due, that I could pay them. NEEDLESS to say, always be wary. The outcome of my situation: after threatening to file suit, as I had amortization tables and all paperwork provided me at initiation, they gave me their best AAA/secret/super TERM life policy which expires when I turn 62! Now isn’t that just the cat’s rearend. Think twice people!!

    • What you described cannot be a whole life policy. Likely you had a hybrid of term and WL or a UL — another species of duck entirely.


  36. Do you know what these guys are talking about???
    Which are the 3 3d printing companies?
    Are they “Keepers” ??

    Many experts believe this new technology will trigger a rebirth in U.S. manufacturing and put an end to the “Made in China” era.

    And two cutting-edge companies are at the forefront of this revolutionary “portable factory” that could make you extraordinarily rich starting today.

    Here’s how…

    “3D Printing Spurs a Manufacturing Revolution” — New York Times

    Dear Reader,

    It’s all over the news.

    A breakthrough 3D printing technology is about to forever change manufacturing as you know it… putting to an end to the globalized supply chain — and the “Made in China” era.

    This cutting-edge technology is so powerful, it could trigger an American Rebirth…

    With many experts proclaiming 3D printers will make it possible for many American companies to mass produce products right here at home. Cargo ships could become a distant relic.

    New research by The Boston Consulting Group found:


    A new report by John Manners-Bell, CEO of Transport Intelligence, and Ken Lyon, CEO of Virtual Partners, found that with 3D printing, “Goods which were previously produced in China or other Asia markets could be ‘near-sourced’ to North America,” vastly reducing transportation and labor costs for American companies.

    Even The Economist agrees, noting: “The old rules of manufacturing, such as ‘you must seek economies of scale’ and ‘you must reduce unit-labour costs’ are being cast aside. New machines can print every item differently… ”

    With Forbes adding: “3D printing holds the potential to revolutionize how, where and when goods are manufactured.”

    Now, let me stop before I go any further and and say I know this sounds like some futuristic device you’d see in a sci-fi movie. But remarkably, 3D printing technology is real. And it’s being used right now to create a variety of customized products.

    For instance, 3D printing is being utilized to create stronger and lighter parts for the aerospace sector, and to reinvent medical devices that are custom tailored for each patient — like hearing aids, dental applications, and implantable devices. I even saw one patient recently who had 75% of his skull replaced with a 3D-printed implant.

    The technology is even being used to “print” edible meals — including chocolate, cheese, scallops, turkey, and celery.

    There’s just no end to what 3D printing can create…

    “Imagine entire supply chains powered by 3D printing, where customized products are made on-demand, anywhere in the world,” says Forbes.

    And Wired Magazine noted in a recent issue:


    It’s been estimated that up to 30% of finished products manufactured last year involved some kind of 3D printing.

    By 2016, this is expected to rise to 50%… and by 2020, potentially up to 80%.

    Imagine getting in now on this transformational technology that will forever change the way products are manufactured.

    It could be the catalyst for America’s manufacturing rebirth — by bringing local economies back to life and restoring middle-class jobs — and the catalyst for future riches for investors who get in on this trend now.

    That’s why I’m so excited to be here with you today…

    I’m just finishing up an urgent new report that fully details two cutting-edge companies that are at the forefront of this revolutionary “portable factory” — two companies that could make early investors extraordinarily rich.

    In just a moment, I’ll show you to secure your FREE copy of this timely report. But first, let me explain in a bit more detail what this new technology is capable of…

    I Just Saw the World’s First “Printed” Car Rolling Off the Printing Press

    Yes, I said “printing press.”

    Using a new kind of printer, a little-known Minnesota company has “printed” an entire car. It gets 200 MPG, goes 70 mph, and is built to last for 30 years.

    I wouldn’t have believed it if I hadn’t seen it with my own eyes…

    All the exterior components of the car — including the windows — were created using 3D printers.

    If it wants to make another car, the company simply hits the “print” button again.

    This new technology is similar to clicking the print button on a computer and sending a document to an inkjet printer. The only difference is that the “ink” in a 3D printer is a material that is deposited in layers until a solid object emerges…

    It can print plastic, metal, glass, and even concrete.

    This is one of those rare transformational technologies — like the Internet or the printing press — that could change the way we live, work, and play.

    According to the Market Oracle, this is the 21st century’s laser printer — with the power to forever alter industries in the same manner that desktop publishing changed the print industry during the 1980s.

    Business Insider calls it:3dprinting.tearsheet.bizinsider

    And for those wealthbuilders who jump in early on this emerging trillion-dollar industry, the rewards could be extraordinary…

    Because the list of possible uses for this transformational breakthrough is already long — and growing.

    While recently reading The Economist, I came across a story about a Ph.D. student at MIT named Peter Schmitt, who has been 3D printing a grandfather clock…


    And right after that, I learned from Popular Mechanics that TV personality Jay Leno uses a 3D printer to make custom hard-to-find parts from scratch for his collection of classic cars…


    The New York Times reports a California start-up is building houses with its 3D printer:


    And even more remarkable, a tiny biotech company is exploring using 3D printing to create entire human organs. The printing device would lay down layers of living cells that could be molded into a bladder, kidney, or heart.

    Incredible, isn’t it?

    But the tastiest use of 3D technology goes to the University of Exeter, where scientists have developed a 3D printer that prints not ink, plastic, metal, or concrete — but layers of delicious chocolate!

    It’s no wonder SmartPlanet calls 3D printing the:


    Because with this brilliant innovation you can “print” your own car, your own drugs, your own food… even your own house.

    Need a piece of jewelry? Or a spare part for your car or lawnmower? Soon you will be able to fire up the 3D printer and make one from composite materials.

    This groundbreaking technology isn’t just limited to big corporations or university research departments with deep pockets…

    In fact, the little-known Minnesota company that “printed” the car I mentioned has recently released a home version of the 3D printer for under $1,300.

    It allows every one of us to be a designer, inventor, factory owner — and maybe even millionaire — inspiring grand visions of a future where everyone prints out their own children’s toys, replacement car parts, household objects, or musical instruments.

    And as prices continue to drop, the 3D printer could soon be as common as a screwdriver in Henry Homeowner’s garage…

    The Economist says:


    Wired Magazine says this new printing technology could trigger:


    And yet, most people are still unfamiliar with the concept.

    Which means you have a massive wealth-building opportunity to get an early advantage on this market before the average investor gets a clue.

    And if history is any indication, you could turn a mere $10,000 into over $3.7 million off two explosive American companies that are at the forefront of this incredible 3D technology.

    Here’s how…

    It’s Happened Before with Transformational Technological Innovations…

    According to a University of Chicago study, investors early to the game made massive gains off these cutting-edge innovators:

    37,199% on Container Corp. of America
    37,170% on Truax Coal
    30,503% on International Paper
    23,586% on Douglas Aircraft
    24,146% on Zenith Radio
    21,608% on Minneapolis Honeywell

    Any one of these companies could have turned a mere $10,000 into over $2 million!

    Why did these firms succeed in times of economic hardship? Simple: The founders recognized a market need and filled it.

    Consider Zenith Radio…

    It was a cutting-edge technology back in the 1930s. Zenith was the Apple of its day with radio breakthroughs.

    By the end of the 1920s, one-third of U.S. households owned a radio. By 1933, that number climbed close to 60%.

    Early-in wealth builders who were savvy enough to invest in Zenith back in 1932 could have made as much as 24,000%. That turns $10,000 into over $2.4 million!

    If history’s any clue, as we pull out of this current economic slump, huge tech advances will abound…

    Like this amazing 3D printer that could transform our world — and your pocketbook.

    And that’s why I’m so excited to share this with you today…
    Nick Hodge
    Nick Hodge is managing editor of Energy & Capital and investment director for the advisory Early Advantage.
    He’s been in the investment publishing business since graduating Loyola University in 2006.
    Known for a “call it like you see it” approach to money and policy, his insights have led to numerous appearances on television and in various outlets on the Web — including the Business News Network and Yahoo!’s Daily Ticker.
    Co-author of a bestselling book on energy investing, Nick has led tens of thousands of investors to ten triple-digit wins and over 220 double-digit wins in the space.
    He’s also passionate about public policy, population, agriculture, water, and raw materials.
    His expertise ranges far beyond stocks…
    In Early Advantage, Nick shows readers how to make money as well as protect and spend it.
    When he’s not writing, investing, or flying around the world to meet with company executives, Nick can usually be found either in a boat on the Eastern Seaboard or on a Maryland farm pursuing the outdoor activities he grew up with and continues to love.

    I’ve uncovered two future giants of 3D printing, each capable of bringing you a boatload of money as this emerging technology turns into a trillion-dollar industry.

    In just a moment, I’ll tell you how to secure your FREE copy of a timely new report I’ve put together on this new breakthrough.

    It’s called “3D Printing: Gains Up to 37,000%,” and it will give you the full details on this revolutionary new technology — and the two companies set for explosive gains.

    But first, let me introduce myself and share a bit of my background covering little-known breakthroughs and disruptive technologies that could change our world… and make you tax-shelter rich.

    Hi. I’m Nick Hodge.

    I’m an analyst at Angel Publishing in Baltimore, Maryland, and editor of Early Advantage — the resource for big profits from little-known breakthroughs and disruptive technologies in energy, resources, electronics, technology, agriculture, and more.

    Known for a “call it like you see it” approach to money and policy, my insights have led to numerous appearances on television and in various outlets on the Web — including the Business News Network and Yahoo! Finance’s Daily Ticker…

    Perhaps you’ve read my bestselling book on energy investing, or seen me speak at numerous investment conferences around North America…

    My goal at any appearance is always the same: to bring you the latest information, ideas, and companies that could change your life… and bring you enormous gains.

    Like it did for these readers:



    My goal is to get you in on the ground floor of emerging technologies — like the 3D printer — so you can maximize your gains before the Wall Street fat cats jump on board.

    What I’ve been telling you about today is such a monster technological breakthrough, even NASA has jumped on the 3D printing express…

    Awarding a grant to Behrokh Khoshnevis, a University of Southern California professor of engineering, to find a way to build a moon base using 3D printing technology:


    At that rate, you can put together a whole room in just an hour.

    How amazing is that?!

    As we head into the future, this technology is what will allow major advancements to be made in multiple industries. It’s pure picks and shovels for the modern age.

    It’s no wonder, then, that some of the world’s biggest players are taking notice…


    According to Bloomberg Businessweek:


    And that’s just the beginning of what could be the “Next Industrial Revolution.”

    This is one of those rare technologies — like the steam engine, the light bulb, atomic energy, or the microchip — that could change the way we view the world…

    And early investors will make the most tremendous returns.

    Right now, only a handful of savvy investors understand how incredibly huge the 3D printing industry will be — giving you the opportunity of a lifetime to be among the first to invest and make a killing from what many experts are calling the next trillion-dollar industry…

    An industry that could trigger America’s next manufacturing revolution.

    3D Printing: America’s Next Manufacturing Revolution Has Begun

    The prestigious Atlantic Council recently released a Strategic Foresight Report that details how 3D printing could change our world.

    It called 3D printing:


    It also noted the United States could experience a renaissance in innovation, design, IP exports, and manufacturing as a result.

    The bottom line: America is BACK!

    Forget all the doom-and-gloom stories you’ve been hearing about America’s demise lately. Yes, we’ve had our share of bumps and bruises over the last few years… but with this ONE new technology, we could reclaim our title as the world’s leading manufacturer.


    Just look at how Apple has completely overtaken Japanese dominance of the gadget industry… or how Google took the lead in organizing the world’s data… or how Facebook is the leading innovator in organizing the world’s people…

    The fact is when it comes to life-changing technological innovations, America is still a global powerhouse. And with its strong leadership in 3D printing technology, America could reclaim its title as the world’s largest manufacturer — taking manufacturing jobs from China and bringing them back to America where the products are consumed.

    Fact is higher production costs, shipping costs, time delays, and social unrest are leading many American companies to rethink moving jobs overseas.

    3D printing solves all of those problems.

    The final result: a sizable reduction of our global economic imbalance with China as our reliance on imports shrinks.

    It makes sense… Why would an American company ship a critically needed product or spare part from China when it could “print” one immediately at home?


    Do You See the Incredible Opportunity Here?

    This is the technology that will transform the way we manufacture just about every single product.

    This is the breakthrough that can bring an end to the “Made in China” era and bring America back to its feet.

    3D printers aren’t just going to revitalize America… They’re going to revitalize American spirit and ingenuity:

    Designs — not products — would be moved around the world as digital files to be printed anywhere… by any 3D printer.
    Manufacturing facilities would print wide range of products without retooling… and each printing could be customized without added cost.
    Products could be printed on demand… without the need to build up inventories.

    And that’s going to bring early wealth builders a mountain of cash…

    Turning a tiny $10,000 investment in 3D printing into a possible windfall over $3 million.

    Imagine what you could do with that kind of money… pay off your mortgage, pad your retirement account, pay for your kid’s college education — never rely on anyone for anything.

    The time for that is now, because…

    3D Printing Technology is Advancing at a Rapid Pace

    It’s only once or twice a lifetime that you witness the emergence of a technology that is capable of generating TRILLIONS of dollars worldwide.

    And that’s why I’m excited to share with you the two companies that are at the forefront of this industry.

    Each company is capable of bringing you phenomenal gains — as much as 37,000% — as the demand for 3D printing technology explodes worldwide… demand that could continue to skyrocket as this technology becomes more mainstream, just as it did for computers and cell phones.

    That will push 3D printer prices down, which will send demand even higher.

    Already, the price of 3D printers is coming down from $125,000 five years ago to under $1,500 today. Just imagine what will happen when the price drops to under $400, putting them well within the affordable price range of most consumers…

    Like Apple and Dell computers in the 1990s, everyone will have a 3D printer at home. And when that happens, 3D printing will trigger a whole new wave of innovation.

    The Atlantic explains the process like this:


    Right now, we’re at the very beginning of the transition from the “tinkerers” stage to the “mass market” stage.

    That’s the time you want to get in to maximize your gains.

    Because when the fat cats on Wall Street finally discover the explosive moneymaking opportunities within 3D printing, the growth in this industry is going to be enormous.

    This could be your Apple, your Microsoft.

    If you had invested in either of these transformational technology giants in the early 1980s, you’d be sitting on a mountain of cash right now… able to retire when you want to, not dictated by someone else… able to travel the world, pay off your kids’, even your grandkids’, college education…

    Well, this is your second chance at incredible wealth… a rare opportunity to get in on a jaw-dropping technology that is set to revolutionize the way we do things in business, at home, and in schools.

    Or as The Economist says, it’s the dawn of the:


    Almost everywhere you look, an article about 3D printing is surfacing — from The Economist to Forbes to the Wall Street Journal.

    Forbes has exclaimed:


    The Wall Street Journal noted we’re in the:


    But the problem for wealth builders is that none of these articles talk about where in the 3D printing industry you need to put your money right now — i.e. which cutting-edge companies could lead you to monster gains…

    That’s why I’m eager for you to get your hands on my FREE new report, “3D Printing: Gains Of Up to 37,000%.”

    In it, you’ll get full details on the two companies that are set for enormous gains as the 3D printing industry explodes.

    It’s your blueprint to great wealth — and it’s yours FREE.

    Over the next few minutes, I’ll give you step-by-step details on how to secure your copy.

    Right now, let’s take a look at the two companies you’ll learn more about in the report…

    3D Printing Wealth-Builder #1:
    This Global 3D Printing Powerhouse Could Trigger the REBIRTH of America’s Manufacturing… Here’s How to Profit

    This U.S.-based company is an emerging leader of the 3D printing industry.

    The company develops, manufactures, and sells a line of 3D printers and related materials that create parts from computer-aided design (CAD).

    Its products are used in the aerospace, defense, automotive, medical, and architecture industries… and until recently, it focused on the upper end of the market — selling its 3D printers to customers like 3M, Medtronic, BMW, Chipotle, and Xerox.

    Its average mid-range price was $60,000 per unit, with some units costing more than $350,000. But realizing the monster sales potential in the fast-growing lower-end professional market, it recently released a 3D printer geared toward educators, engineers, entrepreneurs, and independent designers…

    It’s the market’s lowest-priced professional-grade complete 3D printing system priced under $10,000. And the patented 3D printer package contains everything needed — including the printer and support materials.

    Its technology is so revolutionary that it could trigger America’s manufacturing REBIRTH…

    And response has been explosive.

    Its latest quarterly report showed record-breaking revenue up nearly 25% and 3D system sales soaring by over 50% since last year.

    And unlike most fast-moving technology companies, it has NO debt — just tens of millions of dollars to pour back into R&D.

    I’ll give you the full details on this emerging powerhouse in my blockbuster new report — yours FREE just by clicking below.

    Before you do, though, you might want to hear about the other 3D printing company, which has the medical community buzzing with excitement…

    3D Printing Wealth-Builder #2:
    Make Millions Off This Tiny California Company that’s Pioneering the Organic Printing Boom

    Reuters calls 3D printing:


    And I’ve just uncovered a tiny start-up in California — priced under $10.00 a share — that’s taking regenerative medicine to the next level.

    Unlike most 3D printers, which use plastics and metals, this printer uses biological material — in other words: living cells. And the products these printers create are living organs.

    The specific technology is known as bio-printing. To date, the company has used it to create several tissue types including lung, cardiac muscle, and blood vessels.

    The biggest advantage of using this technology is that because the tissue is grown from the patient’s own cells, there is little or no danger of rejection.

    With near-zero chance of rejection, this amazing 3D printing technology will eliminate the need to have patients wait for donor organs on long waiting lists.

    Imagine going to the hospital and watching your new kidney or heart being “printed” out…

    Not surprisingly, the company was named one of 2012′s Most Innovative Companies.

    Its incredible 3D bio-printing technology could shave billions off the $5 trillion spent on health care annually.

    And that opens up an incredible opportunity for you to get in on an emerging technology that could bring you gains of as much as 37,199%… like the gains emerging technology innovators Container Corp. of America and Truax Gold brought to some of its early-investors in the past.

    This company has doubled in size since 2011… and because of its massive potential, it has received millions in private funds to continue its groundbreaking research.

    In addition, it has signed an agreement with its first major pharmaceutical partner, Pfizer. This is a huge win for this relatively unknown company.

    This tiny company’s revolutionary bio-printing technology is set to change medicine forever — and could make investors an astronomical amount of money in the process.

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  37. There are two points that I don’t see mentioned in the comments;

    First, the plan is to purchase the minimum coverage with maximum premium through the use of Paid Up Riders. You are not buyinf the death benefit but rather the tax free accumulation and use of your own money. Yes there are fees but there are fees to EVERY investment be it commissions, spreads, or taxes.

    Second, as it was explained to me, the plan works best for those with incomes in excess of their expenses. One idea within the concept is to build a protfolio of these policies (yours, your spouse, children, grandchildren, etc.) and place as much of your income into the plan as possible. Then you pay out your monthly expenses and purchases through the policy loans. The monthly “premiums” pay for the policies and the loans so long as again you have more income than expenses.

    This way you are the bank and you are collecting the interest you would otherwise be paying to a commercial bank which when all is said and done is a HUGH percentage of one’s lifetime income.

    By way of example, even a person making $35,000 per year will cash flow $1,400,000. How much of that you keep is the key to wealth and financial freedom.

  38. Much of the continuing discussion is about being responsible in making regular payments on the Insurance Policy/Vehicle and borrowing and repaying in a disciplined and responsible way. Very good.

    If the person/buyer has the discipline to do all this, I would ask why inject a third party (the Insurance company) into the process where the third party is there only to take a significant part of the cash return?

    It is possible and easier to do the same thing by opening a discount (online discount?) brokerage account, invest in large-cap dividend-paying corporations, invest by making the same disciplined regular payments into the account, treat any cash withdrawals as loans and pay them back with interest. Be your own banker indeed.

    We need to stay with Travis to understand the spin and travesty of much of the Investment Advisory song & dance. Beyond that, find and read ‘Seeking Alpha.’ Read about Dividend Achievers and Dividend Champions. Do not even try to be a ‘Trader.’ Read “TheReformedBroker.com” and “bclund’ on Twitter and in your regular general purpose Email.

    • Dusty,
      This indeed is most of my outstanding question, however, you did not mention non-taxable vs taxable though it might be only fear tactics. So the two main issues seem to be:
      1. A certain amount of return is “guaranteed” by the whole life policies, of course the real return in the form of insurance “dividends” are still variable. There is no guarantee of a return or even preservation of capital in stocks or anywhere else. This might appeal to some, not sure yet if it appeals to me and if so in what proportion to my total holdings (if the amount comes out to be lower then I would want to have in the policy to make it useful then that would be a stopper).
      2. The difference between paying taxes upfront (regular brokerage account), paying taxes later (IRA/401k accounts) and not paying taxes (borrowing from insurance policy cash value). The market side to this is hard to determine and is relative to how much you have over what period of time and market fluctuations at those specific times. I remember sitting with a financial analyst who asked me a question about prior market conditions being able to predict future, at least in a general sense. And I answered and then he showed me a graph and pointed at a certain 20yr period where there would have been a definite loss if someone had bought and held at the beginning of that period.
      3. Estate tax – The gains from the market cannot be passed on without estate taxes. There may be certain shelters which can be utilized, however, ultimately we must prepare for death, then taxes!

      I am still not sure the whole life policy is a good fit for me personally but if I were sitting on a lot more assets and the ratios lined up it might be a perfect fit for a portion of my holdings.

  39. Hello everyone,

    We’ve been very much enjoyed the number of you who have visited our site after one of your readers posted a link to one of our posts, and we wanted to stop by and offer to shed a little light on this 770 “plan” business.

    I’ll start by saying that while we are very much of the opinion that life permanent life insurance (a distinction of life insurance of which whole life is a memeber) can absolutely work as a low risk asset class–and work quite well, we are fundementally opposed to the practice of presenting it as some sort of specialized plan. In fact, the National Association of Insurance Commissioners proposed policy in the early 90′s and was adopted in 49 states (Texas is the only hold out) that would suggest presenting a life isurance purchase as establishing a private 770 (or 7702 as it’s more commonly referred) plan is in violation of the law. I would further argue that if not a direct violation, it certainly is in conflict with the spirit of the legislation, which came about in large part to combat a common practice of selling life insurance as a “pension plan with a free health check up.”

    Now that I got that disclosure out of the way…

    The use of whole life insurance as an asset building strategy certainly works, and the product can be manipulated in such a way so that the majority of the premium you pay is made up of a rider known as the paid-up additions rider. If you are looking to capitalize on whole life insurance as an asset, you very much want a large portion of your premium to be part of the paid-up additions rider. Or, and this is where it starts to get really complicated, you want your policy to be of the High Early Cash Value (HECV) class of whole life products. Here’s the part that sucks for you the general consumer, you’ll rarely know if a policy is HECV as knowledge on this will be dependent on the agent.

    When it comes to whole life insurnace, and I’d like to underscore this because IT’S IMPORTANT, there is a design process known as blending which is generally crucial for optimizing a strategy of whole life as an asset class. Blending is a process of using whole life insurance and term insurance, and for the purpose of building cash value it’s used to increase the Modified Endowment Contract (MEC) limitation placed on the policy. In the interest of keeping this comment shorter, I’m going to skip on the details concerning MEC’s, but one can easily find information regarding what this is elsewhere.

    Blending will allow more paid-up additions than would normally be allowed with just a base whole life policy. If this seems a little cryptic don’t worry, there’s a good many things I’ve skipped over in the interest of comment length, so your not dumb, I just haven layed everything out as thoroughly as would be required for you to all understand fully what is going on.

    So, it certainly works. Pitching the idea as a 770 plan or any other iteration thereof is, in my opinion, a “skeezy” thing to do and is traditionally a sign of questionable ethics. We’re talking about buying life insurance, we don’t need to run from it and it works really well. But some people know that by making something sound exotic and exclusive, there are some people who will gravitate to it by virtue of their psyche.

    When desigend properly the advice many of you might find about these policies not having a positive gain until 10-15 years down the road is incorrect. Properly blended and with paid-up additions will make these policies yield positive returns in about 7-8 years or sooner in some cases. In addition to this, when properly designed, the whole big commitment force savings aspect also largely disappears since a large portion of the premium is paid-up additions the funding of which is discretionary to the policy holder (i.e. you can adjust your premium down and back up as needed)

    The 5% average is pretty solid from historical numbers, and I’d say notwithstanding a crazy long (20+ years) stall out of interest rates we can anticipate better than that from a properly blended policy. We have evidence of a policy published publicly on the Bogleheads forum a few years ago that has achieved well over 7%, but keep in mind that policy benefited from being in force in the early 90′s when interest rates were much higher than they are today.

    It is true that many Wall St. types own these policies, but I certainly wouldn’t suggest that it’s some closely guarded secret they hoard from the general investor.

    It’s certainly beneficial, and it works pretty much exactly like it says it does. But design is crucial and there are a lot of people who want to pay the idea lip service, but sell you death benefit focused policies because there’s a lot more money to be made on that end. So do be critical of any proposal that veers from blended with paid-up additions, and don’t fall for any nonesense of “starting off” with a smaller paid-up additions rider so you can increase (or “grow into a larger”) premium.

    I hope this helps.

    • Speaking from first hand experience, I can very much stand by the the information provided by theinsuranceproblog.com. I consider myself an advanced investor and about a year ago was very close to signing up for a “standard” whole life insurance policy with one of the major carriers (and more importantly with one of the standard agents). I was very fortunate to run into The Insurance Pro Blog and worked with them to design a policy that fits well for me and maximizes my risk adjusted return over the long term. I was able to do this by designing a policy that considered my return first without creating a moral hazard of the agent needing to get a massive commission.

      Net / Net – I believe I effectively designed a policy that provides a very lucrative death benefit while also allowing me to generate a ~4.25% tax free IRR over a 20 year period. Not bad for a “component” of my net invest-able assets.


    • Can you recommend a company that can provide the structure that you are referring to? I am totally new to this, but have been approached by a Bank On Yourself rep several years ago. The premiums were way too high for me then and I want to ensure that I get the best possible policy as I have very limited income. Thanks! robynbobbin99@hotmail.com

  40. My wife and I have ‘whole life’ type policies that we added to our portfolio about 30 years ago. They never impressed me as a great idea, but solved my need for insurance and we were directed by a family member. So we were an easy sell.
    I set all dividends to reinvest and eventually dividends paid the annual cost. They are now paid up and available for borrowing on or just to act as what turned out to be pretty good policies.
    They are not suppose to WoW you. Maybe that is something we forget when we are looking at the latest stock idea.
    I would recommend of course a reputable company. That can be hard to figure out I think. Mutual companies like mine have something to be said about them. Probably a lot, but I like the ‘cooperative’ idea of them.
    Conversely, I had a policy offered at work. A term approach that was simply awful. I picked up a small term policy back before the whole life and have nothing to show for the money that I put in. I have elderly friends who purchased term policies only to have their rates go up when in retirement they could not afford the fees. There were sold apparently by ‘reputable’ and well known planners. So all in all I have to say that I am pleased with our choice.

  41. Speaking as a person who once, many years ago, sold life insurance, I would suggest anyone who is motivated by the death benefit to one’s survivors ascertain how much
    of the benefit is just a return of your previous investment. Not different from cashing
    out a savings account. Basically, you pay for years, you die, and your survivor gets back
    the money you put in (with perhaps a small addition.)
    Running the numbers on these situations could be enlightening.

    • Call David Herlicka at the Herlicka Financial Group LLC in Bedford N.H. 603-622-9062. David Is the best I’ve ever seen at designing these types plans.

  42. All right, since there have been quite a few others who have thrown links about, I guess we will, too.
    we don’t like the use of the term 7702 plan, or 770 plan. We feel much more ethical just telling you that you are purchasing cash value life insurance and designing it to minimize death benefit and maximize cash value. for those of you who are looking to open a 770 plan. Contact us here:
    We can walk you through design process.

  43. First of all its is very important to choose a Mutual Insurance company when considering buying whole life insurance. I am a financial advisor at the Herlicka Financial Group LLC in Bedford NH. The top 3 companies are MassMutual, Guardian, and Northwestern Mutual. Make sure if going to buy from one of these companies you ask your advisor about direct recognition and indirect recognition, Very important if you are going to use the policy to create tax free income in retirement! Most advisors don’t know how to sell whole life insurance and they don’t want too, because its the hardest sale to make unless a client comes to them asking about it. It’s so much easier to put a clients money in an annuity or funds because there is no underwriting. I know this because I see it everyday and those individuals get paid faster.

    • MassMutual, Guardian and Northwestern in that order? That wouldn’t have anything to do with the fact that Herlicka Financial appears to be a MassMutual agency would it?

      Oh and it’s called non-direct recognition. And who said people who did this only did it with whole life insurance?

    • Jeffrey:
      Can you give us the definition of “direct recognition” & “indirect recognition”?
      Never heard of those terms in insurance policies or investments.

  44. I hae one of these policies after learning about it thru the PBL. (and Mark Ford, his real name). I have owned a term policy and it went up considerbly when I turned 50 (2nd 15 year term). I am now 54.I wish I had done this type of policy 20 years ago. it is a really good vehichle and the company I have my policy thru is top notch (over 150 year old company). The base insurance is not much more than my term, but the cash accelerates due to the way the policy is written. It’s not a complicated confusing complex contract (wow) if you understand insurance types and riders. The math is what really sold.me. I have a guarnteed 5% return in my policy with another dividiend (1.8-3% per year) on top of that. The company has never missed paying a dividend. The money grows tax free (not tax deferred) and there are no annual management fees (like with my mutual funds).
    It doesn’t take any complicated formula to figure out that is a real return and not a projected return. It takes only three years (in my policy) for my cash value to pass my premiums paid. That sold me. Cae closed. I would strongly recommend looking at this.

    • OK, MIKE:

      • I like Mike’s comments on sept. 6, 2013 at 3:00pm. did he ever e-mail you back on total return. also did he mention to you what 150 year old company he is with and who to contact. thanks for any e-mail back for info. I like your comments. I don’t do much on this level. it sounds very interesting.

  45. I am 81 years of age and have a large amount of cash in CDS and paying almost nothing.

    What can I do to get a much better income stream on this asset. What can a 770 acct. do for me and my wife (76).

    • You need an annuity. Contact several of the largest insurance companies and compare what they offer. Be careful about fees. At your age the payout should be quite good.

    • At age 81 and 76 dont pay a penny to any life insurance co. Invest your money in low cost, high dividend paying ETFS or funds. Vanguard is THE BEST. Their VYM or VIG are peerless.

        • THERE is NO RISK FREE! The top 10 companies that make up VYM and VIG if held in
          equal proportions are the closest thing to a reduced risk you can get but the index might do better in the long run! It *might*, there is no guarantee.

          • PS I personally have around 40% of my holdings in these indexes
            and around 40% in Dividend Growth stocks and the other 20% in whatever
            turns me on. I try to keep sector allocations balanced and position sizes low
            (1-2%) so everything is diversified.

    • At that age I would simply look for a portfolio of good dividend stocks and a bond fund like
      xmpt . i don’t know how much you have but a steady income stream is important. I have been buying income stocks for my own retirement to generate the gap in what we can draw down from annuities , SS payments and what we will need to live

  46. I have been researching investing for quite a few years. As an electronic test
    engineer formerly with Motorola, Intel, Orbital Sciences, etc. I have tested
    quite a few different strategies. The best one I have found is an online
    investment strategy with a base return rate of about 5% PER MONTH. Like I said,
    some of these positions only last a few days to a few months and you are out
    of them. I never enter a position without doing a ‘test’ on it first to see if it is
    likely to be profitable. I am not selling a book or even an e-book. I just am
    happy to share this idea with others (especially those who do not have the
    resources to pay high priced brokers or investment advisors). I appreciate
    Travis Johnson’s explanations of some of the ‘wild-eyed’ programs that
    people tout that cost so much to get started that they have nothing left to
    invest. I am mostly self educated in investment arena and an investment
    strategy has to be simple, cost effective, time effective and once it is set up,
    be able to run on ‘auto-pilot’. Anyone who is interested in how this works,
    they can call me at 480-832-7810.

  47. On a web site for the so-called “palm beach newsletter,” the people who promote this stuff have a presentation that claims that the 770 account comes from “the IRS legal code section that allows these accounts to exist.” Umm.. Earth calling: There is no such Internal Revenue Code provision numbered “770″. Per Internal Revenue Code section 101, life insurance proceeds received by reason of the death of the insured are non-taxable, and that’s no big, deep dark secret. Very unsophisticated sales pitch.

  48. I am guilty of having purchased products from both Wade Cook and Charles Givens. Between the two I spent $1400. Some might conclude that I had been ripped off, but I learned enough useful information from both of them that it was worthwhile. Givens made a very simple statement that is worth way more than the combined amount I spent…

    “Buy insurance as if you are going to die tomorrow, invest as if you are going to live forever!”

    Learn as much as you can about how money works and figure out what the scam is before jumping in. Both of the above organizations were borderline scammish. I don’t go to “fee” seminars anymore specifically because of my experiences with these two. All of the information in their “packages” was also available in their books. For $20 at Borders you could get the same information you got out of the $600 to $800 package.

  49. I have a whole life policy that now has cash value of more than I have put into it.
    However, I’ve been paying tax on my premiums….where does the tax free aspect come in?

    • Dear Sheryl: If you’re speaking of life insurance, I think what you mean is that the payment of the premium is non-deductible for federal income tax purposes (which is correct). The benefit received by the policy beneficiary in the event of the death of the insured person is, per Internal Revenue Code section 101, non-taxable to the beneficiary. That’s where the tax-free aspect comes in.

      • Dear Sheryl: By the way, if you cancel the policy and thereby receive an amount equal to the cash surrender value at that time, the receipt of those funds is generally non-taxable to you. However, over the years, the payment of the premiums was non-deductible to you when you made the payments — and a portion of the premiums you would have paid would have been reflected as increases in the cash surrender value.


  50. Sounds like a “LIRP” to me Life Insurance Retirement Plan. That is worth looking into with a good broker.

  51. The best is to sit down with life insurance agent who knows about this type of accounts. Don’t get your normal whole life or universal life insurance because it is not going to have the same results – it will probably benefit the insurance agent more than it will benefit you. I am in Nashville, TN and have dealt with those type of accounts for years. But if you are somewhere else, send me an email and I can probably find somebody that lives near by that can meet with you – and come up with a good plan based on your age, plans etc.

    Also, if you are getting together with your normal insurance agent and he tries to sell you something – feel free to send me the illustration and I would love to give you an unbiased opinion about it. edgar@arceofinancial.com


  52. Wow, folks!! It seems like the only person who did the math was Mr. Perkins. Seriously insurance is risk protection not investment. Some of the math is hard, but do it.

  53. Interesting discussion about Life Insurance and you are likely correct. However, I wonder if 770 accounts are not Trust accounts. You can search state of VA tax documents. Their Form 770 is for Trust account reporting. The rich have used trust accounts for generations. Might be worth a search.

    • A tax lawyer friend of mine (disclosure: I am also a tax lawyer and CPA) has theorized that the term “770″ may have been dreamed up by the promoters of the “770 account” based on Internal Revenue Code section 7702 (which defines the term “life insurance contract” as used in the Internal Revenue Code). Whether that’s how the “770″ label came about or not, by simply dropping the “2″ and then claiming that their Jethro Bodine super-secret double-naught spy “770 account” is somehow based on a provision of the tax law, the promoters can fool unsuspecting readers in to thinking that the promoters (or “journalists” or whatever they are) somehow have some secret “knowledge”, when they’re really just talking about life insurance.

      • The 7702 reference is to “Modified Endowment Contract” which definition is used as a bumper at the end of the track in our station in building the plan. If we put too moch money into the PUA segment, we lose tax advantgages. So, we ascertain the ideal mix or balance of life insurance and added deposits to achieve the desired result. It is not something that many life insurance people can handle. Call Harris Levy, better email harlind@optonline.net if in NY or NJ if in other states we may have a competent party to involve. There is so much wrong information, prejudice, inability to learn around us that it can hurt.

        • Dear Harris Levy: For what it’s worth, “modified endowment contracts” are covered by Internal Revenue Code section 7702A. They’re not even mentioned in section 7702 (these are two different provisions).

  54. This thread is a life insurance agent’s dream come true! A herd of unsuspecting sheep volunteering -no begging!- to be fleeced! In an environment of ultra-low interest rates, the whole life concept sounds great to the average consumer because he doesn’t know the difference. No, I’m not a licensed anything, but I have done my homework. If you are reading the Gumshoe, then you have the time and intelligence to do the same. If you do, you’ll learn that paying an insurance company to buy term and invest the difference for you via any type of cash value policy (which is what they do), will never be better for you than if you buy term and invest the difference for yourself. You’re not going to subtract out fees and hefty commissions from your own money. Ask the agent what his first year commission is. The reason you can’t expect to safely begin withdrawals until 15-20 years down the road is that your “savings” will need that much time to regain what was subtracted up front to pay all those juicy fees and commissions. If you are undisciplined and not very knowledgeable, then buy a level term policy that covers you until your liablities are met, and max out your IRA or 401K contributions. A Roth IRA can accomplish the goal of tax free accumulations and tax free withdrawals. Buying cash value insurance of any kind is not the way for small investors to go. The uber wealthy can afford to pay the hidden costs to gain the benefit of creating tax free estates to pass on to their heirs. If you’re not one of them, buy term and invest the difference.

  55. Oh! Forgot to mention that universal life policies are interest rate sensitive. That is, the premium quoted is based on the “assumed” interest rate for the accumulation account. If interest rates decline, then the premium must go up! Some companies will notify you, and let you decide if you are going to pay the larger premium or cancel the policy. others will quietly begin taking the difference from the accumultion account, effectively cannibalizing the policy. I say cannibalizing because once all the cash value is gone, the policy lapses. Imagine you bought one of these 10 years ago when assumed interest rates on these policies was whatever it was; 7-10% or more? Whatever it was then, you bet your bottom dollar it’s much lower today. Those policy buyers are now either paying twice what they started out paying, or have had to start over with a new policy. The reason the payouts are tax free is because you din’t make any money. The insurance company is merely refunding “a portion” of the overcharge already collected. If you pay me $100 today for $50 worth of goods, and at the end of the year I give you a $10 rebate, have you made any profit? This is why the advertising of these policies is closely regulated. Not because the IRS wants to keep it secret from form you. But because if unregultaed, the insurance companies would screaming from the mountaintops that these are the best “investment” mankind ever created. Which would totally be false advertising, since it’s not an “investment” at all. That’s all. I’m done. I’ve given you it in a nut shell. What you do with it is your business. I made my decision in 1985. I bought term and invested the difference. I retired at age 45, and enjoy my days golfing and shopping, and whatever I feel like doing. I’ll still be doing tomorrow regardless of which way you go on the subject. I hope you do some research on your own and crunch some numbers before you decide.

    • EXCELLENT comment , specially with rate’s diving deeper these days. and looking to stay there for “a while”. People do set it and forget it” as tautedd by the insurance companies.

  56. I’m 76 old and retirement plans have not gone the way I had anticipated. A $250K term policy just expired on Oct. 17 and the cost to continue is prohibitive so I’m entertaining buying a universal life policy of $3oK for about $1500 annual premium to cover funeral expenses. My wife and I are comfortable with soc. sec. and a small pension, but nothing extravagant. My health is very good, no problems whatsoever. Any advice?

    • Not sure who your question is directed to John, but I would ask first if you have any debt? In the absence of debt, if you have enough savings to bury (or cremate) you without leaving your wife penniless, what is the insurance for? it doesn’t sound like you’re concerned about leaving a large estate to someone that needs the proceeds to pay taxes. Your wife would still recieve social security, and I assume the death benefit of your pension. The $30K insurance benefit would just be a bonus? That being said, if you don’t have long-term care insurance and might leave behind a bill for end of life care, it might be a good idea to have life insurance. But $30K won’t pay for a long stay in a nursing home these days. You need to shop the market place to get the most coverage for your money if you feel do need it. But with UL, you are buying insurance and savings. Paying for both, but owning only one or the other.

    • Maybe I’m reading your situation wrongly, but I’m Just wondering why you don’t simply put aside the money for funeral expenses or pay for it in advance, and keep the $1500 you were going to spend on the annual premium.

  57. John,
    can you convert the policy you had (still in the grace period) to a decreasing term to age 100? Starting the face amount at whatever is affordable to you.

    • Thanks for your response. I guess my thoughts were based on what if I died tomorrow? I think maybe my best course will be setting the money aside or prepaying funeral expenses. My wife of 55 years is in great shape physically, but is starting signs of memory loss and I’ve been feeling a little panicky lately. Thanks again, God Bless.

      • John – if you are in good health, you could still try to get a whole life policy, and if you presently have a CD or money market account where it is paying less than 1%, then you should think about putting that money into a single premium whole life insurance. It will give you a better return and the death benefit will be greater than the single premium. If you are interested, I could run some numbers for you. We could do something similar for your wife…

    • By going to the OVERVIEW tab, you can watch the 5 minute video of Nationally recognized tax guru, Ed Slotts, review the product. He doesn’t sell anything, but he love this program. See for yourself.

  58. After wading through all 70 posts, I don’t think the question was ever adequately answered as to how these “770 plans” could do what they say they can. I think I may understand – it’s all about accumulating yield on an unlimited asset base within a tax sheltered plan that allows you access to the asset.

    You can accumulate tax-sheltered yield on an asset base in Roth IRAs and Roth 401Ks, but you are limited in both cases as to how much you can invest each year. You can’t borrow from an IRA, and while you can borrow from a 401K, many such plans limit the duration of the loan and/or insist on monthly installment to repay the loan.

    My understanding is that once you have the Whole Life plan described with add-on riders, you are unlimited as to how much you can put in the plan. The money you put in the plan above the cost of the insurance (basically an internal term-life policy) grows tax sheltered. Put in a lot of money and relatively soon you will have earned enough to cover the insurance premium. The rest of the money grows tax free and you can borrow from it without tax consequences. The younger you are when you start, the quicker the same monthly investment will grow because the term-life component costs less when you are younger. The more money you put in at any age, the more you will be able to borrow later, which is why these plans are better for people who have substantial cash flow above living expenses.

    It makes some sense to me, and had I known about it AND understood it when I was much younger, I might have made it a component of my retirement plan. Right now I’m close to retirement, don’t need more insurance and don’t want to commit enough assets to such a plan for it to be worthwhile as a shelter.

    • Dear Ira Cotton: Generally, in order for a life insurance contract to continue to qualify for favorable federal income tax treatment under section 7702, there is a limit as to how much you can put into the plan. The insurance companies have to watch this closely, and they will refund an overpayment if you try to force too much money into the policy (assuming that the insurance company catches it). The financial and legal consequences (including the tax consequences) to the insurance company (and to the policy holder) can be substantial if the contract goes into “7702 fail” mode.

        • Dear Ira Cotton: Yes, and in terms of what the section 7702 limit is, that depends in part on the specifics of the policy. And the complexity of section 7702 is minor compared to many other Internal Revenue Code provisions. I’m reminded of this passage from a teacher of law:

          ————”Statutes are not designed to be entertaining, or emotionally powerful, or beautiful, or profound. Some writers, primarily adherents of the plain language school, have claimed that statutes’ primary virtue is the same as that of a good deal of expository prose: clarity. But common sense demands rejection of that position. Because statutes are written to effect policy decisions, their main virtue is ”’accuracy”’ in the sense of precisely effecting the desired policy. If a statute is difficult to comprehend but accomplishes its purpose it is a success. If its meaning can be discerned instantaneously but its effect is the opposite of the one intended, it is a failure.”
          –Jack Stark, ”Teaching Statutory Law”, 44 J. Legal Educ. 579, 583 (1994), as quoted in: Timothy R. Zinnecker, ”When Worlds Collide: Resolving Priority Disputes Between the IRS and the Article Nine Secured Creditor”, 63 Tenn. L. Rev. 585, 586, n.5 (Spring 1996).

          The Code used to contain a provision (section 341, repealed a while back) that contained, among other things, a sentence of well over 400 words. One Code section (section 6103) actually runs to over forty pages if you print it from the Cornell University Law School web site on a standard printer on regular 8.5 by 11 inch paper.

          • PS: A couple of weeks ago I was actually working a case where an individual (a Texas resident) had tried to put too much into a life insurance contract (in violation of section 7702), apparently as a way of trying to defeat that individual’s creditors prior to filing bankruptcy. (Texas Insurance Code section 1108.051 can be used in a U.S. bankruptcy court by a Texas resident to exempt certain life insurance policies from the claws of creditors.) Unfortunately for the individual in this case, the insurance company caught the overpayment, and simply refunded the excess money to the individual (and specifically cited the problem of section 7702 in its cover letter returning the funds).

  59. i hav ben lokin for this all my life. i neu it was out her, butt to bad it took a life time to find it. so; i will not make it now, but i wil turn my nieces/nephews on to it. and now i will leave my interests to them to make the decision for them. thanks to alls the people in the above komentits/tors section.

  60. During the posts that I have read I did not see any mention of comparing the 770 to the advantages of opening a Roth IRA or moving money from a traditional IRA to a Roth. I am presently 77 and converted a sizable amount to a Roth in 2010, I spread the taxes over a 3 year period, but the amount invested in the Roth has increased 42% in 3 years. Best move I ever made. Would have done it sooner but my income was too much to do a conversion. I say bite the bullet, pay the taxes and convert. Just my personal openion.

        • Yes, but I thought he might have another of those 770 accounts where the return is guaranteed, without any downside risk. I am aware that the market is up substantially, as I’ve been in it for years. The only problem is you never know when these bubbles are going to burst. As long as the gov’t keeps printing money I suppose we can ride along. Just hope my timing is right, as I’m getting to the age where I will not have the time to catch up again.

          • I could have done better if I had put my money in SPY but I use % trailing stop losses, not the 25% a lot of the investment bunch recommend but mine are in the 10 to 12% range. I have been stoped out a few times when I really didn’t want to part with the equity and have bought back later on. I also spend an hour a day doing research.

  61. Best. Thread. Ever.

    As far as insurance goes, that is.

    Would love to be the promoter selling tickets to a no-holds-barred, bring-your-calculator-and-historical-returns cage match between an Infinite Banking pro advocating for the Whole Life/big PUA side, and an experienced Term-and-Invest guy. Let them both make a run at three scenarios — 25 yr old married couple, 45 year old married couple, and a 65 year old married couple, all with US median incomes. I know there are infinitely more variables that might affect the outcome, but you gotta have a starting point…..

    • Get those “experts” together, Paul, and I’ll advocate for Equity Linked UL. I like my chances very well.

  62. dr. Dr. kent Moors WRITES – “I’ve just set up Money Map Project #1 —my first-ever direct investment deal only for Money Map Readers.”Forget stocks, options, or anything else… Here’s an exclusive NEW way you could turn every $12,500 you invest into $281,000 or more! —Hi Travis, pls advice what you think about this since few readers do like him…thnx much – simsan

    • I cannot wait to hear about Money Map Project #1. How long does it take to turn that $12,500 into $281,000? Gotta be good.

  63. I am a former principal, and compliance officer as well as supervisor and licensed agent with at least two financial giants who primarily sell and market life products as investments. One of these was also an MLM. What you say is true. Essentially these products are offered without emphasizing, but usually being able to provide upon request the proper financial analysis to show how these programs can actually be economically favorable. Most often, these programs work very well for those who need to pay inheritance taxes on the transfer of large amounts of assets. There ARE very large annual fees charged, and the programs generally do not become favorable in under a decade of participation. Many of these programs also claim to participate in “upside” in the market, but do not participate in downside. Again, the economics of this remains murky for someone not conversant in financial math. Actuaries design these programs for the offering company to be profitable. They do what the prospectus says they do, but how many read the full prospectus and crunch the numbers? How many note the annual fees? These emotional appeals to “secret” programs, used by “famous” people, and heavily used by “bankers”, should sound suspicious, because it is, indeed, a sneaky way to sell something.

  64. There are so many comments on this post. Most of the ones which have some actual knowledge of various types of insurance company structures, policy types, taxation etc have a little or a lot of information but in most cases are shortsighted due to a limited amount of actual knowledge and, in some instances a keen desire to make a sale. I am a retired Enrolled Actuary, I have headed a pension consulting firm for over 35 years and an affiliated life and disability agency devoted to the needs of the pension plans, estate taxation of some of their participants, sponsors and heirs with no solicitation function. I would be happy to discuss the manifestations of using life insurance for other than strictly life insurance needs. Mostly, term insurance which looks cheap but expires mostly worthless,is best for definite death benefit situations WITHIN a given period of time. That is the reason for the term “TERM” it is excellent for that purpose and is also excellent as an adjunct to another type of policy to enhance the death benefit function. This field comprises enough information required to receive quite a few credits in university on the subject and Gumshoe’s blessed Thinkolator isn’t the proper locale. I will gladly go into deeper discussions with anyone who seriously wants to learn and who will give the state(s) in which they reside and work so that I may limit some portions of a discussion in accordance with State insurance laws (there are 50 different plus DC and territories). In some states I may be able to show examples while in others it would not be permitted. My email is harlind@optonline.net and please do not cram my inbox with anything other than a serious request. I do not have any interest in philosophical discussions at this time. If I am permitted to give you examples it would be necessary for you to add your gender and year of birth.

  65. This is hilarious to me for so many reasons.
    First, people should own permanent life insurance. It is a forced savings plan that provides death benefits as well as cash accumulation.
    It is also funny to me that what I used to have to ‘sell’ is suddenly sexy for all the benefits that so called financial pundits who pushed buy term and invest the rest when they knew damn well the general population buys term, blows the rests and then drops the term when things get tight.
    I used to be an agent for Northwestern Mutual. I no longer keep up with their AM Best’s ratings as I am no longer in that business. One thing is for sure, though. Of all the business transactions in which I have participated over the years selling a young family whole life insurance that was carefully crafted to fit their situation was the cleanest, most moral of them all.
    Yes, I miss the business. My reason for leaving was quite simply that I got tired of trying to convince men to do for their families what they knew in their hearts they needed to do but did not have the character with which to do it and stick to it.
    Today’s economy is the result of buy term and use the rest to finance more lifestyle than you can afford at credit card interest rates.
    LOL, this matter is too complicated for a blog response and in any case, it matters not. The country has to deal with the consequences of choosing to not accumulate capital personally.

  66. what is the approximate time $ 5,000 can become an amount that one can use some of the interest amount….or do you know…

  67. I suggest that you take a look at Alliance. I purchased one of their product that guarantees a 10% interest rate that I can withdraw up to a 9% income stream and in this way I NEVER will drain my account. It compares their stock market investment earnings and the 10% guarantee rate. I get the larger of the two rates, racheted every quarter! That is up, never down! I have increasing life insurance to boot. I contributed once (converted, tax free, from another type of policy), and I am earning 10% minimum. As far as tax free; I suspect that I will have to pay taxes on the interest but sense I’m not withdrawing yet, I ‘m not sure/

    About two years ago they stopped selling the 10% guaranteed product and now only offer a 5% or 6% guaranteed product (not sure which) but the deal has the same rate structure.

    Annuities have been given a bad rap over the years but Alliance is, I believe, what these people are talking about and I do not believe that anyone in the industry can equal it.

    Disclaimer: I am not an expert by any means on this product and you should research it yourself. If interested contact Fred Farhoumand at One Resource in Ft. Wayne, Indiana. (260) 478-0680. I have known him for 30 years and he has always led me honestly & professionally and I have made money.

    Good Luck!

  68. Universal Life policies tank. Legal way for insurance companies to screw you. Agents sell these policies knowing that 20 years later when they tank, no one will remember who sold it to them and what was said. Read the policy. The simple illustrations have a non guaranteed and guaranteed value. The guaranteed value is the really what will happen.

    • You don’t know what you’re writing about, Mike. You don’t sound worth the effort involved with fixing some of your misunderstandings, so I won’t try. You might want to limit future writings to areas in which you actually know something.

  69. The article and comments are very interesting. I deal with asset management, and am licensed in insurance as well. My POV is that of finding the best long-range investment solutions for myself and my clients. Since I am licensed to sell both insurance and securities, I have no preference for or against these programs. My name in this forum is fake, as is the email address that I have provided. I will not respond personally to any direct questions because of my position and license regulations.
    First of all, for those of you who are using this forum to solicit clients – I suggest you review this practice with the compliance department of the companies you work with. You may find that this type of solicitation is not only unethical, but unlawful under the terms of your licensure. Any type of investment advice is specific to an individual, and there is no way to possibly understand the complexities of a ‘poster’s’ full financial situation by reading a paragraph or two.
    I have studied a few of the ‘borrow from yourself’ strategies and I’m not at all sold on them.
    When you roll up your sleeves and actually crunch the numbers, and include the very high cost of owning a Whole Life policy, you’ll quickly learn that you will have a stronger bottom-line (more money accrued) even with modest returns in the current interest-rate environment, through conventional, low risk investments.
    Risk is the key here – the only two advantages that I see using insurance products as investment vehicles are through principal protection, and tax deferral/avoidance elements. However, you pay for each of those protections, and with simple calculations, you’ll quickly scratch out the differences.
    I am a proponent of using insurance for risk management… but for investments, it just doesn’t pay off.
    When you ‘bank on yourself’, you are not borrowing your own money. So, you’re not banking on yourself. The insurance company owns that money as long as you hold that policy (that you gave them in the form of premiums). You are borrowing their money, against your own Death Benefit. And, you are paying interest -in part- to them for the privilege of borrowing that money.
    If you want to use your own money to purchase durable goods or a home… here’s a novel idea: save up the money, and buy it with cash. Yes, you will pay taxes on that money while you’re growing it, but that is ‘generally’ less expensive than paying the high commissions and insurance fees in a whole life policy.
    I encourage all of you to read Nash’s book, seek a good insurance broker to provide you with hypotheticals – be very careful to examine actual, historical returns… not fictional/straight-line ‘assumed’ returns. Compare that to historical returns from any number of investments from Treasuries and CDs to non-traded REITS, S&P 500, tactical bond strategies and the like. You’ll run the entire gamut along the risk scale… and I believe that you will find out that insurance is NOT the way to go for long-range investing/income/retirement.
    Good luck, and I really appreciate many of the comments in this forum!

  70. I’ve always had Term Ins. (got new policies every few years before age bracket went to a higher premium). I’m just a simple guy and like simple things; Exceptions: Whiskey and Women….a man still needs a few challenges in life.

  71. Once again – and for some reason unknown even to me, I shall try to make clear the basic principles underlying this whole chain of commentary:
    Never buy anything (including insurance) from anyone whose primary interest is in the amount of commission he or she can make;
    Never buy or sell anything only for the tax consequences which may or may not ensue;

    Only accept advice from a qualified expert be it an attorney, a CPA, an Appraiser, an Actuary, a CFP, CLU ChFC or the like. and in the specialty in which you have the situation.

    Deal with an enterprise or sales person who will only make recommendations to you based on your needs with the caveat that if you have no need no recommendation will gbe forthcoming, So, here goes:

    If you know either the date or the bracketed time frame of your death or the close of a given period during which a need may exist, and if a term product from a good company is available with good provisions and terms, then consider the term coverage.

    If you have a need which may extend for an unknown or indefinite period of time or is known to exist at a point in time after available term products will cover you (term insurance at age 95 if still in force on an existing policy may cost darn near 100% premium per year (and nobody gets any commissions on these amounts, maybe a tiny service fee)) . A good lawyer to prepare trusts and the like for estate planning to make sure that the high net worth individual is properly situated vis a vis taxes and other factors which could prove problematic upon death, may recommend life policies which may have high commissions but his fees may just possibly also be substantial. So if you also don’t want your lawyer to make any money either, then listen to all the
    “know-it-alls” who will tell you a million different wrong or partially correct zero to half-truths. Summary: If you need permanent coverage, permanent life with GUARANTEES is the way to go unless you can pre-fund 100% of the potential need right away. As an actuary, I am well aware that the insurance industry actually does better on term (most policies expire or lapse worthless without the larger commissions and expenses of setting up permanent programs) we factor profits into all premium calculations. As for a 401k), always take what you can get free since most employers have long since terminated their costly pension plans for the near freebies of the 401(k) cash or deferred plans. Again, there will be expenses, even commissions maybe, and taxes at the end of the line but if you would end up with more, even taxable, then take it – you would be a fool not to.

  72. Pingback: Secret 770 Account or The Presidents Account Explained | Coin News

  73. Good god you people are all ****ing idiots. First, you actually waste your time on these obvious newsletter con men, then you dont even realize this website pretends to give you “analysis” on con men without ever telling you they are con men either because the moron who runs this site is too naive to know any better or because all he really cares about is making you think this useless site can provide value. The real deal is that this site uses the hard work of others to draw in an audience in order to see advertisements.

    • Frank:
      Since we are a bunch of idiots, I presume you are another of those brilliant know-it-alls. We all know what this site does and we have a choice at to ignoring or posting, so get over the name calling. You are the one showing your ignorance.

    • Frank, You’re dead wrong about Travis (Gumshoe). He is providing a fine service and doing so free. He is not naïve; you are. Further, you’re a nasty person who fails to think (at all well) before committing your foul thoughts to writing.

  74. “WHAT” the life insurance companies, the investment houses, and the bankers “do” with every single dollar of deposit, earned interest, or whatever shows on their ledger, is “fractionalize-the loans- that are issued” 9 to 14 ‘fold and KEEP the bulk of the earnings, as they pay out the paltry ( but about average ) returns, to “US” the idiots who don’t have the slightest idea of how the rich get richer and what REALLY goes on with these leveraged trades behind the scenes, BECAUSE – if enough of “US” would FINALLY get “The Rest Of The Story” – there would be world-wide riots ensuing, BUT, since “WE” the Comon Village Idiots – wouldn’t believe that these things are possible, for it’s been ingrained in our mediocre brains that “IF IT SOUNDS TOO GOOD TO BE TRUE- IT MUST BE FALSE” – no worries about world-wide rioting !……

  75. The 770 accounts are NOT Indexed or Universal Life products – those don’t have guaranteed cash value, and they don’t endow (which is huge). Yes, you’ve all figured out in the thread that it is whole life – but whole life with maximized paid-up additions, which makes the cash value grow more quickly. I’ve had illustrations run on myself (I’m 50) and I’m definitely getting one (or more) of these policies. The rate of growth is modest but steady, and by year three you have ALL your premiums back PLUS the death benefit, should something happen to you. From then on, it grows faster. (Policies without the PUAs grow cash value more slowly.)
    If you already have money in the market (which of course you can’t collateralize, have no guarantees against loss, no death benefit, and are not as tax-advantaged) you owe it to yourself to check it out – thoroughly. I used to be a “buy term and invest the difference” person, but would be better off if I had done this instead.
    The Palm Beach Wealth Builders Club is awesome, lots of useful info (Income for Life, same as 770, and much more).

  76. Im 72, Im not so enamored with insurance policies other than a means of leaving money to beneficiaries tax free. Ive created my Irrevocable Trust and put all my assets so to speak under its umbrella but I have a problem which is good but problematic and Im unsure how to handle it. Ive concluded a transaction Ive worked on for a number of years the result is income in the millions + The minute I bring this money into the USA Ill be taxed 42% on said moneis. Thanks to the new laws under Obama, can not put the money as a US Citizen overseas, so 42% will be lost to me in tax. This is where one is seriously tempted like many others to move overseas and drop ones Citizenship. On the other hand at 72 I wont have many years to enjoy my good fortune but it chokes me to give money to an administration so incompetent in the business of governance

    • RMealey, Remember that the current administration has only two years yet to go. To get some perspective on the real quality of this administration as it compares to previous administrations read “The Big Con” by Jonathan Chait. Regardless, do the right thing and stay here. Loyalty is not just about being American while accumulating wealth.

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