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Explaining “770 Accounts” and Palm Beach’s “How to Fund Your Own Worry-Free, 100% Tax-Free Retirement.”

Reading into Tom Dyson's Palm Beach Letter pitch for “The Secret Investment Account: How to Fund Your Own Worry-Free, 100% Tax-Free Retirement.” This was originally pitched as the "770 Account" and has also been touted as a "702(j) Account" that "pays 30-40X more than bank accounts"

This was originally published on June 3, 2013, and it continues to be one of the most-discussed topics we’ve covered during those years.

The idea continues to be teased and promoted actively by Tom Dyson and his folks at Palm Beach Letter, sometimes using different names, so we’re re-posting it for those new readers who might be interested… the idea is now sold partly as a secret strategy used by Warren Buffett, Joe Biden, Wall Street Bankers, and other notable names… but the basic idea and the type of “bank on yourselflife insurance policy they’re pitching is unchanged (yes, I expect Buffett probably has some whole life insurance, since essentially all wealthy people use life insurance as part of their estate tax planning, and Berkshire Hathaway has engaged in life settlements/secondary life insurance investments in the past).

While you’ll still sometimes see it teased as the 770 Account, or as the “World’s Most Notorious Asset,” it’s mostly now being teased as the “702(j) Account” (just another mysterious-sounding number, like 770, that refers to the part of the IRS code that deals with cash-value life insurance)…

…the story otherwise hasn’t changed much, here’s our original article…

—-from 6/3/13—-

“Imagine an account that…

“Lets you retire 100% tax-free

“Is NOT reportable to the IRS

“Pays you an average of 5% per year

“Has paid out, on average, for 121 straight years

“And which, unlike traditional retirement plans like IRAs and 401(k)s, lets you withdraw money anytime you like, for whatever reason you like, and with no penalties whatsoever.”

That’s what Tom Dyson and a few other folks who sign their promo letters are promising in the latest pitch for the Palm Beach Letter, which he publishes with Mark Ford. It’s all about an account that’s been used by the uber-wealthy for generations, and by “at least six different U.S. Presidents,” including John F. Kennedy and FDR, whose pictures grace some of the ads to provide gravitas, to generate “IRS-exempt” income for retirement.

So what’s the story? Well, Dyson calls it the “770 account” to make it seem mysterious (why else, of course, would you buy the newsletter?), but, frankly, it’s plenty mysterious on its own even if you don’t give it a sneaky name. More on that in a moment.

In fact, this kind of “Account” is already being touted by lots of skeezy-sounding infommercials and books whose promises make you very suspicious — they come with names like “Bank on Yourself” and “Infinite Banking.”

That’s not to say that any of the heavily marketed versions of these plans are skeezy, just that their promises give me that feeling, and the numbers and specifics for plans like this come usually only when you’re sitting in an office with an agent. “Skeezy”, by the way, is defined by your friendly neighborhood Gumshoe as a combination of “sketchy” and “sleazy.”

But what they’re talking about with those plans, and what Tom Dyson is pitching for his newsletter, is life insurance.

Not just ordinary term life insurance like most people under 60 carry, though — we’ll get to that in a minute. First, a bit more of his tantalizing teasing:

Manhattan’s Secret Vault: Why Wall St. has kept this powerful secret hidden from you

“There’s a very good reason you’ve never heard about the “770” account before:

“That’s because Wall Street doesn’t want you to know about it!

“And neither do the big banks too, for that matter. (More on this in a minute.)

“Now, even though this is the investment account The Wall Street Journal is on record as saying is better than 401(k)s and IRAs… the majority of Americans don’t know it exists.

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“Why?

“Well here’s a clue…

“I just got off the phone with an insider who works in the 770 industry. This person has worked first-hand with one of America’s biggest financial gurus (a name you’d instantly recognize), as well as several employees from Goldman Sachs and other big investment banks.

“And this is what this person said to me: NO ONE in Wall Street has their money in stocks—many of them are invested instead in ‘770’ accounts!

“Now, consider what this means…

“Here are the same investment professionals who’ve been telling us for years to “buy stocks”… and meanwhile… they’re all putting their money somewhere else!

“Ridiculous.

“Can you imagine the outrage this would create if most people found out about this?

“That’s why you’ll never hear your broker mention this investment to you, no matter how much money he (or she) has parked into it.”

We get a lot more in Dyson’s ad about the safety of these plans, and about how the big banks have tons of their own capital tied up in these plans (that’s true, by the way — banks have massive life insurance assets called “bank owned life insurance” or BOLI, they take it out on their top employees and it’s a large portion of their core capital), and Dyson’s reiteration that he has been putting increasing amounts of his own family’s money (20% of his net worth) into these accounts and getting a safe 5.5% yield … and it’s money that he can take out whenever he wants to by borrowing against it without penalties.

So what he’s talking about is not just life insurance, but probably a specific class of permanent life insurance that’s called “whole life.”

And it’s not really life insurance, not in the way those of us with term life insurance policies think of it (making sure your family’s not destitute if you die when your kids are young, or your mortgage has 20 years to go), it’s more of a wealth protection and tax-avoidance savings policy.

Whole life insurance is an agreement between you and an insurance company that they will pay out a certain amount of money when you die, and the agreement never expires as long as you keep paying the premium. That obviously means the premium is far larger than with a term life insurance policy, since a term policy expires at some point — term life insurance almost never pays out, so it’s cheap. You can pay $25 a month for $500,000 of 20-year term life insurance if you’re 35 years old, which is obviously cheap, but that’s because you’re young and healthy and the insurance expires when you’re 55, well before you reach the highest mortality risk years.

Whole life insurance does have that insurance portion, in that if you die in the early years of the policy there’s a death benefit that probably exceeds the money you’ve put in. But it’s not really for that — it’s set up to accumulate your death benefit over time. So if you want a $500,000 policy and the actuaries think you’ll die in 35 years, your premiums plus whatever returns the insurance company can earn on those premiums will have to add up to $500,000 in that length of time, plus whatever the insurance company wants to make as a profit. Life insurance companies do not generally do crazy investing or earn great returns in times of low interest rates, and they know pretty precisely when their insured people will die (for a large group, on average) so your premiums would likely be pretty stiff.

But that’s if you’re thinking about it as insurance — much of your premium goes into building a cash value for the insurance policy, and if you buy your policy through a mutual insurance company (like State Farm, or many others) that’s owned by the policyholders, and you get a “participating” or dividend-paying policy (meaning you get a dividend from the insurance company when they make money), then your cash balance can compound nicely and provide what are effectively decent investment returns that are indeed tax-advantaged. I don’t know whether the 5.5% gain that Dyson is expecting is typical or not.

Life insurance is often used by families who have some wealth to pass some of that wealth down to the next generation without taxes, and it doesn’t have accumulation limits that I’m aware of, like tax-advantaged retirement plans that restrict the amount you can put in every year — for most people contribution limits are a theoretical concept, but for the upper middle class and the wealthy the cap of 25-50 thousand a year across various retirement accounts is a bother.

So the key aspects of this, from what I can tell, are that you would want to buy whole life insurance, that you would want to have a participating or dividend-paying policy, and maybe even, if Dyson is following the same track as folks like the “Bank on Yourself” people, that you want to maximize the amount of savings you put into the plan (these are often called “paid up additions”) to increase your potential dividends from the mutual company and the growth of the account over time. The maximizing and “be your own bank” stuff is all about putting so much of your net worth into these policies that you do all of your big purchases (like buying cars, etc.) by borrowing from your policy. But of course, to do that you have to be the kind of person who can put a substantial amount of money aside for these large premiums as your “forced savings” plan.

And the reason it’s confusing, even if you don’t call it a “770 Plan”, is that these are complex contracts, they’re not standardized across different insurance companies, and from what I can tell you can only really buy them through an agent, whose commission structure may drive him in a different direction than you want to go. There are many, many variations and riders on these policies that I have only seen briefly mentioned, and I don’t know how most of them work — I suspect that they’re difficult to compare across providers, which is a hallmark of most commission-driven, hidden fee businesses.

Life insurance has a reputation for being riddled with fees, and for permanent life insurance and whole life insurance like this, the articles I’ve read suggest that most of the policies start to make sense after 10-15 years, but they suck up substantial costs and fees that mean you might lose out if you needed to try to pull your money out before that. This is a small segment of the insurance business that’s focused mostly on the wealthy, and the stuff that Dyson seems to be talking about is probably better handled with agents who are specialists in this … preferably those who don’t also happen to market a skeezy “secret plan.”

That is an extremely non-expert view. I don’t have a policy like this and I have not researched them fully, I’m sure there are people with whole life plans and probably agents who sell these plans out there in the great Gumshoe readership who could probably explain it better (feel free to use our friendly little comment box below) — all I can tell you is that Dyson seems to be teasing participating/dividend-paying whole life plans as his “770 plans” (and no, I don’t know what the 770 refers to), and they are real, and I don’t know whether they’re a good idea for you or not.

P.S. As of November 2013 this is now also being teased as “The ‘Underground Wealth’ Account: How to Fund Your Own Worry-Free, 100% Tax-Free Retirement” — these “accounts” were pitched in a different Palm Beach Letter teaser ad that was mostly about silver, I covered that one here on November 7.

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Robin
Guest
April 14, 2016 9:17 am

It’s a secure discussion forum where you can develop or get involved in support system and also discussions regarding health topics that interest you.

Leslie
Guest
Leslie
June 28, 2016 7:59 pm

Why. .. What??? Who???

thegreatergood
Member
thegreatergood
July 28, 2016 5:54 pm

I have subscribed to the “Palm Beach Letter” for 2 years and am pleased with it. I initially subscribed for this specific teaser (Babylonian Money Code / 770 account) and have opened an BOY / IFL account and it works as advertised. Check out Nelson Nash’s book, “Bank on Yourself”. Its an easy read and spells it out clearly and concisely. Be mindful that this is not an ordinary whole life insurance policy and has to be set up properly and most insurance agents are not familiar with this type of policy, regarding the specific riders needed.
I don’t consider Palm beach research to be scammers – yes they frequently advertise for additional services, however the paid content I receive is informative and useful, and worth the price paid IMO.

Good luck and good investing!

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arshus
Member
arshus
July 28, 2016 8:57 pm
Reply to  thegreatergood

I think the book you were referring is “Becoming Your Own Banker”, by R Nelson Nash. “Bank on Yourself” is another book written by Pamela Yellen. It is a great concept for sure, but many life insurance agents take advantage of this great strategy to sell *not so good* policies in order to earn a bigger commission.

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carter
Member
carter
August 31, 2016 1:14 pm

are these accounts protected from Medicaid?

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Lenadjutor
Guest
Lenadjutor
October 17, 2016 2:47 pm

When I see sales videos that go on and on & on & on & on & on, I get suspicious, I don’t care what they’re selling!

Eric
Guest
Eric
December 15, 2016 3:30 am

Insurance is for protecting you or your family from catastrophic loss, not for investing. The biggest possible loss would be losing your income if you are a breadwinner in the family, so life insurance is for that. But you only need that while your kids are growing up, or until retirement if your spouse is depending on you. So go with term life insurance, and never buy these pricy whole-life policies. Perhaps if you’re rich and have money to burn, burn some in these. But otherwise, it’s a really poor investment return. Almost any conservative investment beats that (e.g. VWINX).

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Kathy
Guest
Kathy
January 23, 2017 10:57 am

This is also called a 26F by other newsletters and this is what they are proposing. Get the kind of whole life policy that can be put in a mutual fund and buy shares based on the face value. Example if the policy is for 100K you would buy 100K worth of lets say a no load mutual fund. Once you have the loan value built up, borrow the money out of the policy BUT the number of shares you still own in the mutual fund still remains the same and is appreciating or paying dividends depending on the type of fund. Take the borrowed amount and now invest that perhaps in the same fund or another that will pay a nice dividend. Use the appreciation or dividends from the second investment to pay back the loan This is all going to change in April due to the fudiciary repsonsibility laws and the government wants it’s tax dollars. Insurance earnings are tax free and so is the income from them. Oh yes, 26F refers to the laws of the SEC and lists what is exempt from the laws mainly insurance companies.

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TCostant
Member
TCostant
July 21, 2017 11:35 am

Now being pitched as 501(k) plans, pirched with the person who “invented” the 401(k).

big tuna
July 21, 2017 11:42 am

Insurance is insurance, investments are investments, your home is your home. They are not synonymous terms.

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Danielle Heskett, CPA
Member
Danielle Heskett, CPA
July 21, 2017 12:41 pm

Whole life policies can work for certain wealthy individuals and business owners, but are of little use to the average person. The average individual will benefit much more greatly trough the use of a Roth IRA, or a Roth 401(k). Those can both be withdrawn tax free in retirement without hefty fees to insurance agents. For insurance purposes a term policy is almost always the right plan. Whole life works when you want to insure a partner in your business, so you can buy out his/her spouse or other heir in the event of an untimely death. Whole life also works for wealthy individuals who have otherwise maxed out all other retirement options. But wealthy people like Bill Gates and Warren Buffet also invest in their own companies which grow in value massively over time on a tax-deferred basis. Stocks can also be left to heirs with an upward adjustment to basis or donated to charity, which allows millions of dollars of wealth to be exempt from estate and income taxes.

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Richard
Richard
July 21, 2017 3:20 pm

I’ve been with Dyson and the Palm Beach people since they began and can only say they seem to try harder than any of my many other letter subscription experiences to really help their readers. There is also a big difference in life insurance companies, they don’t all fee you to death. I have had permanent life ins. with NML for 62 years and been serviced exclusively by fine people including benefits like borrowing my cash value at 5% for partial mortgage money when mortgages were 9 & 10% .

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timcarp1964
Member
timcarp1964
July 23, 2017 9:25 am
Reply to  Richard

Were you paying yourself the interest on the loan or the company providing the “insurance”? Just curious…

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chuckhinners
April 4, 2018 9:30 pm
Reply to  timcarp1964

You always pay the insurance company on a policy loan.
You borrow from the company, never from yourself

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Tim
Tim
April 4, 2018 10:53 pm
Reply to  chuckhinners

I believe that I am re-paying the interest to myself, since it’s my policy—the insurance company only holds it in their possession as a custodian. And that is how the cash value in my policy increases. It’s my money—not theirs.

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chuckhinners
April 5, 2018 12:29 am
Reply to  Tim

Your cash value is the present value of your death benefit. You can have it if you surrender your policy and give up your insurance. You can’t have both. Since you can’t have both the cash value remains an asset of the insurance company. If you think you pay the interest to yourself, then you must report it as taxable income.

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Tim
Tim
April 6, 2018 9:07 pm
Reply to  chuckhinners

chuckhinners: I haven’t checked with my insurance company or my agent, but I believe what I have posted above is correct. The interest (I think it’s about 5.5%) that I took on a policy loan is being put back into my account. And as long as I don’t exceed a certain limit (I don’t know what it is–sorry) but what I repay to myself is not taxable income. If it goes over a certain limit it will become taxable. And that is something I want to avoid. Can you cite something specific in regards to this? Thanks, Tim

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chuckhinners
April 24, 2018 11:22 pm
Reply to  Tim

Tim
You can’t borrow more than your policy’s surrender value
The interest you pay is generally not deductible and compensates the insurance company for the use of their money that is unavailable to them to invest.

I think the limit you refer to above is the premium limit that may be paid into a policy. If a policy has too much surrender value in relation to its death benefit, the tax code classifies it as a modified endowment contract (MEC). Any money removed from a MEC via loan or withdrawal is taxable as ordinary income to the extent of gain, In addition, a penalty of 10% of the game is tacked on if the policyowner is less than 59 1/2

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whudelmaier
Member
whudelmaier
November 5, 2018 5:06 pm
Reply to  Richard

Excellent point Richard, is that co abbreviation for Northwest Mutual Life?

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Nils Mellquist
Guest
Nils Mellquist
July 21, 2017 3:49 pm

These plans are a complement Ron irAs and 401k w advantage being funded post tax, compound service tax free and not subject to taxes when you enter the draw down phase to fund the old age years and limited to no income.

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mgreiner715
mgreiner715
May 23, 2018 10:56 pm
Reply to  Nils Mellquist

Actually they may be better. The distribution is received as loan so it not reportable by the IRS. Therefore it avoids stealth taxes that raise one’s tax bracket. A book called ‘Pirates of Manhatten” has very interesting info. Corporate Wall street CEOs and executives put more money in these types of plans(IULs, ULs, WholeLife) products than there own product.(mutual funds, managed accounts,SMAs)

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whudelmaier
Member
whudelmaier
November 5, 2018 5:12 pm
Reply to  mgreiner715

Excellent point MGREINER715, All of the major banks have a minimum of 35-4-% of their assets invested in these over funded, tax advantaged life insurance contracts.

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garymatt
garymatt
July 21, 2017 7:43 pm

I used to be a licensed life insurance agent. I have a conscience and could not stand it for more than 12 months.

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Periklis
Guest
Periklis
January 17, 2018 11:59 am
Reply to  garymatt

When you are driven by commissions and not by the best interest of your clients then I can understand why you would feel this way. Sounds like you where with the wrong company and/or mentors. Contact me if you would like to try a more emotionally rewarding approach to being a life insurance agent.

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whudelmaier
Member
whudelmaier
November 5, 2018 5:38 pm
Reply to  garymatt

I am glad that I don’t have a conscience when I delivered a 4 million dollar death benefit, to a young widow with 5 small children with only a high school education. I am also glad that I don’t have a conscience when I received a call from an old client of mine that has several policies with me, he asked to borrow 65k to pay for his daughters tuition room and board for the upcoming year. He had started this particular policy 28 years ago with me at a contribution level of $250 per month he was consistent with it and did not touch the money in the early contract years. He borrowed 65k from a cash value account worth 392k, his loan rate was and has been fixed at 3.5%, not to mention his policy cash value increased by 23k at his last policy anniversary date and will increase at an even higher amount his next policy anniversary date, minus the approx. 18k in loan interest which means his cash value account will increase by a net of $5,000. Oh and I forgot to mention that the $250 per month was paid into the policy by the company 3 different times for a total of about 6 years while he was disabled from a back injury in his 30’s What mutual fund, stock, IRA, 401k , etc. will con will continue to buy shares for you even if you are disabled and can afford to do it on your own. I haven’t seen one yet in my life , have you ? The cherry on the top, in direct contract to Dave Ramsey, is that his policy also has a death benefit now of 490k which is approx 100k more than his cash value account and 240k more than the initial policy insurance face amount. So all of you people out there that listened to Dave when he told you that you lose your cash value when you die can’t be any farther from the truth. Speaking the truth is how I survived in this business for 28 years and still do.

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J F
Guest
J F
July 22, 2017 7:16 pm

“Becoming your own Banker”, by Nelson Nash. Worth a read.

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williambarnes
Member
williambarnes
July 23, 2017 1:01 am

The correct usage for this today is with a Indexed Universal Life Policy. Overfunding a policy up to the MEC (Modified Endowment Limit) is used to quickly build cash values. The best IUL’s have no cost Living Benefits, which are no cost as they are paid as a discount to face value based on severity of illness, disability, etc. Whole Life can be used, and a 4-5% dividend is accurate. With an IUL,. over the last 20 years, dividend is over 7%. Hope that helps someone if they are in the market to update a policy with a more current approach – much better than paying for 5 policies to accomplish the same concept. (Long Term Care, Disability, Cancer-Heart Attack-Stroke, Life, Critical Injury-Critical Illness Policies) As for cash values, Indexed policies have floors and caps, but are quite generous vs Annuity rates. Annual gains are added and locked in, which makes w for a decent conviction investment. I see the concept as a uncapped ROTH IRA investment vehicle if funded properly. I would want anyone to fill their ROTH too, but an IUL in the early years would be much more valuable to a person-and their family should health become a factor, including death. If it matters, I operate a multi-state Agency an am a Financial Planner.

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irabidermandds
irabidermandds
July 25, 2017 5:45 pm
Reply to  williambarnes

William Barnes, how can I contact you? thanks

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Prathima Reddy
Prathima Reddy
August 11, 2017 6:25 pm
Reply to  williambarnes

Can you please give me your contact info, interested in leanning more about this.

sst
Guest
sst
September 16, 2017 3:12 pm
Reply to  williambarnes

Would this venue be better than a health savings account? Having read some of the Dyson info . I had the feeling this account is a checking account(hence no bank) a saving account and can he set up as a family investment account. Would appreciate your comment

Periklis
Guest
Periklis
January 17, 2018 4:24 pm
Reply to  sst

Let me see if I can explain it to you and not confuse you more.
An IUL has two “baskets”.
There is the Life Insurance “basket” and an asset accumulation “basket”. Part of the premiums you pay go to the life insurance “basket” and part of it goes into the asset accumulation “basket”. IULs have “floors” and “ceilings”. Typically depending on the company the floor is 0% and the ceiling is “13-15%. What that means is that since the IUL is “mirroring” an index, S&P500, Hang Seng or European Index, you would receive any gains up to the “ceiling” percentage even if the market does more, 0-15%. But if the market drops, lets say by -20% you don’t loose any of your money because of the “floor”; unlike the 20% loss you would have if your money was in the market.
In addition depending on how you structure it, you can also have Living Benefits/Long Term Care included.
Best part is that since the premiums are being paid by funds that have been taxed already and since the asset accumulation “basket” is tied to a “life insurance”, hence “No Bank”, the IUL is a Tax Advantage vehicle.
The money you take out, that could be used for anything you like, is in a form of a loan and not taxed as income.
Hope this helps.
If you would like more info or have any questions you can contact me at perrysother-mail@yahoo.com.

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j joseph
April 5, 2018 11:43 am
Reply to  Periklis

hi perk is this better than an annuity where I can get 7.5% for life and my beneficiary gets whats left after all pay outs when I die. thank you jjb

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jerome50
jerome50
April 25, 2018 1:00 am
Reply to  Periklis

Are theses types of vehicles only available for those living in the US? I am from Canada..
Thx

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Periklis
Guest
Periklis
January 17, 2018 12:30 pm
Reply to  williambarnes

I agree with you William. I would suggest to my clients an IRA only if the company they work for matches the money they put in cause its FREE MONEY. But if they do not, then an Index Universal Life is a much favorable and safe option. Now if they want to take some risk for possible higher gains, then a Variable Universal Life could be an options.

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lmb
Guest
lmb
August 10, 2018 2:25 pm
Reply to  williambarnes

how can I get in touch with you?

whudelmaier
Member
whudelmaier
November 5, 2018 6:02 pm
Reply to  williambarnes

Actually to be totally honest Bill over the past 20 years Whole Life has paid dividends of 5-7% not 4-7% as you have stated. The only company that went down to 5 % was NWML in the past year, this was a company that was always the highest rated mutual company and the one that had always paid the highest dividend rates. Yes the IUL policies have averaged 7% or even bit more since there inception approx. 20 years ago. But I am sure that there is still a certain level of uncertainty with the IUL product as compared to the Whole Life product, which has a consistent dividend paying history of 150 years as compared to just 20. That being said I do myself own some overfunded IUL contracts which I have been pretty happy with so far (approx. 10 years now), but there is some terminology in some of the higher paying uncapped strategy policies that bothers me some. Many uncapped strategies use a participation rate which is presently pretty high about 65%, but if you read the terms of the contract the company has the right to drop that participation rate all the way down in the instances that I have seen to only a 30% participation rate. Which means that your policy interest rate could be reset at approx. 55% lower than what you are earning presently, that is a pretty big drop. Not too mention IUL’s have an increasing annual insurance cost every year , unlike the WL which remains level for the life of the contract. So if the participation rate drops to 30% or close to it in the later years of the policy and you have a rising insurance cost this could seriously impact the cash value accumulation and borrowing power of the policy. That being said I still like the opportunity of making a few extra tax free points with assuming much risk, so I usually recommend like a 65%/35% split between whole life and IUL, respectively of course depending on the clients situation. I have been in this business almost 30 years now and my claim to fame is that I have never lost a client 1 penny, and I don’t plan on jeopardizing that now. Best of luck, William

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sue888
sue888
April 4, 2018 6:51 pm

FYI – A tax attorney/CPA told me last week you can make an excess contribution (His example was $100K) to a self-directed IRA make the investment whether it be real estate or securities. Keep the proceeds of the sale in the IRA tax-free and at the end of the year fill out an Excess Contribution Form 5329. Transfer the original amount out of the IRA and pay a $6,000 penalty. He says the IRS loves it when you pay them money so they probably won’t question it, but if you get audited you can not be penalized any more than $6K because its the law. If you are a good stock picker, it may be worth it. Consult your tax advisor first.

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Tom D
Guest
April 10, 2018 6:37 am

It is unfortunate that this is the most often overlooked asset within a person’s portfolio…… If only those with…”Don’t confuse me with the facts, i’ve already made up my mind” mentality would actually listen…they’d wouldn’t fall under the category of penny wise and dollar foolish!

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Jeffrey Wilens
Guest
Jeffrey Wilens
April 24, 2018 12:15 pm

Pacific Life Universal life insurance paying about 4.5% to 5% per year after the load. Not that great frankly. Comparing it to a money market rate is dubious. Would have done better invested in an aggressive fund. And when you die the cash value is lost to the insurance company so you have to remove it “in time” and walk away from a bigger pay off (being the death benefit).

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Guest
Guest
Guest
April 24, 2018 10:10 pm
Reply to  Jeffrey Wilens

Cash value is not lost to the insurance company. That is like saying equity is lost when you sell a house. Cash value + net at-risk (for the life insurance company) = death benefit. In other words, beneficiary gets the cash value plus what the insurance company is on the hook for. This equals the death benefit.

Can’t compare mutual funds with a 770 account (or any other IBC named being used) apples to apples. If you do, you have no business recommending the strategy because mutual funds are solely about chasing RoR. Infinite Banking is about redirecting cash flow to your own personal economy. It is much bigger in scope. Wall Street advisors don’t get it because their focus is managing money and beating the advisor down the street.

Work only with an Infinite Banking authorized advisor. They are authorized for a reason. No need to sign up for newsletters. Just use Google to find an advisor near you.

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William Hudelmaier
Member
William Hudelmaier
April 25, 2018 8:31 am
Reply to  Jeffrey Wilens

Jeffrey if you are looking for tax deferred and ultimately tax free growth upon distribution. Then a UL is not a bad option as long as you are not 70 years old and in very poor health. In all fairness if you request the Option B death benefit then your family will not lose one penny of your cash value it gets added on top of the intially purchased death beneft amout and all of the proceeds are paid to the beneficiary 100% tax free. That being said a max funded Indexed Universal Life Contract or a good max funded Whole Life Contract, bot.h will easily out perform the Basic Universal Life Contract. Of interested I would look at Voya and North American for the indexed product and either Foresters, Mass or Penn Mutual for the whole. After 29 years of experience using these financial products, I guess some facts have rubbed off on me
I hope this helps Clarify some things.

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Plebita
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Plebita
May 22, 2018 3:02 pm

So I’m confused as to how you make money with life insurance? don’t you have to die to et that money?

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whudelmaier
Member
whudelmaier
November 5, 2018 5:01 pm
Reply to  Plebita

No Plebita you don’t have to die to collect the money. Sorry for the very late response, I have not been on this site in approx. 5 months. A Permanent or a cash value policy not term, has two separate accounts your living cash value account which is liquid up to about 95% of the total value. This money can be withdrawn on a tax free basis at anytime you want. This is very different to the limitations that IRA’s, 401k’s, Roth IRA’s all pre tax / qualified plans. The dividend that your policy earns every year is comprised of a guaranteed base rate of 4% plus and additional supplemental amount, in todays market the highest paying company payed out a total of 6.83% tax free last year. Using a conservative capital gains tax of only 20%, you would have to earn consistently approx. 8.6% every year with no negative years. This is the lowest I have seen this company pay in the past 20 years, over the past 20 years they have averaged approx. 8% tax free total dividend rate. The next closest company would be Mass Mutual I am pretty sure that there last years dividend rate was 6.4% not bad either. This is the closest strategy to doing as well as Warren Buffet does in the market, his main rule if thumb is to never lose any money. Well that is how this 770 account is designed to not lose any money ever. The market since inception is you use the correct form of math, not the Dave Ramsey math has performed at about 5.7% interest since it’s inception appox 100 years. Dividend paying Whole Life has been around in many instances over 150 years and the average for those 150 years is approx. 9.5% tax free, which is almost 4% higher tan the market and it’s tax free unlike the capital gains in the market. If you have any other questions please feel free to contact me under no obligation, I have been a Financial Services Advisor/Planner for28 years now since graduating college. It is not that I don’t want more business it is just that, I don’t really need the business to survive, since I have been reasonably successful during my career and of course have saved quite a bit of a income producing asset using this particular 770 account strategy. Bottom line no pressure at all just complementary financial education. If you would prefer I would be more than happy to send you a complementary book on this very strategy that I collaborated on several years ago, again no strings attached. I will be checking in on this site much more frequently in the future. Best of luck, William C. Hudelmaier, MRFC, BA

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Matthew
Guest
Matthew
January 10, 2019 2:08 pm
Reply to  whudelmaier

Mr. Hudelmaier I found this site and thread while researching the 770 account quite by accident. I’m very confused by all of it but you in particular seem most knowledgeable on this subject. Is there some way to reach you other than through this discussion? My name is Matthew, i’m not a member and haven’t decided if I will become one yet.

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mgreiner715
mgreiner715
May 23, 2018 10:31 pm

I have been selling life products for 17yrs. The 770 plans are a viable way to store safe money and build a tax free retirement. However, one has to know how to structure such a plan. If not, the agent walks will take advantage of you. Blending the face amount with inexpensive term insurance while reducing the permanent face amount as much as possible is how to do it. The build up of cash can then be removed via loan. The insurance company sends you your distributions as a tax free loan and then collateralizes that amount in your account. One then can leverage that loan with an arbitrary situation using the sp500 index.

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Rick
Member
Rick
June 2, 2018 10:20 am

I purchased a $250,000 whole life policy on my daughter and owned by my 95 year old dad as an investment for him. The cost was about $29,300 as a lump sum payment. The policy was from Country Financial, and the most important provision was that I could surrender the policy at any time without penalty. The return was about 4.5% which varied by Country’s financial success. This beat the pants off anything the Bankonyourself people could come up with. We surrendered the policy at age 100 just before his passing. If the money is used to buy paid-up insurance, the money accumulates tax free. Tax is due on surrender.

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websail7
websail7
June 19, 2018 10:45 am
Reply to  Rick

if the insurance is purchased thru a self directed roth ira can that avoid the tax?

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