I know you. It seems that sometimes your teenager kid gets a hold of this account to participate on this forum. I know that once something is over your intelligence level, you stay quiet. And you did it with my illustration for a very long time. I gave you a chance to make questions but you stayed quiet. You were dumbfounded, your ignorance was obvious, you didn’t expect me to fulfill what you asked for, didn’t you? What you saw, is something you couldn’t find any faul at all because the illustration was very explicit of charges incurred and compound interests accrued. It was well above your pay level mister. Now you are just throwing darts at the wall with blinders on your eyes.
You better go to get another Phd. And make sure it is on how to run a spread sheet because you are as dumb as you pretend I am when it comes to produce one.
OK…I am going to be very polite here and give you a last chance to understand MATH.
I will bring page 1 of the ledger.
Lesson #1= IC companies pay every month into 12 buckets, equivalent to 12 months. One month premium in, one loan out, one 5% is charged and put aside when the account closes at death or exercising the living benefits.
You will notice $100K premium, $80K loan, but the CSV cash surrender value is $90,967. It means that the following year your premium into the policy becomes $110,967. Do you get it?
The insurance company from the net death benefit column is sending you a present of $10,967 but you are crying about a few buck of interests? Are you kidding me?
Are you crying about getting $334K every year, tax free at age 70 which is the equivalent to have paid a home mortgage of $1200 for 30 years?
Answer this Marcus: Can you get the same results opening a 401K with $1200 a month and loaning 80%, and getting $3M for your family if you kick the can next day after being accepted? Are you again kidding me?
Marcus, open your eyes, let me tell you this again: The death benefit pays for all charges! That’s why we use an increasing level (B) where the DB increases every month to accommodate the charges. It is a rider the client pays and pays pretty good! All the numbers you see are playing free of charges.
Let me repeat it again: The death benefit pays for all the charges! It is a collateral account the IC opens to satisfy the rules of IRC 7702, there has to be a loan, otherwise it becomes a taxable event. We educate our clients to call and ask for a loan, not a withdrawal. A loan!
Are you good at math Marcus? Here you go:
Grab any accumulated value amount, and deduct the accumulated loan amount, that’s what you can loan that year. It is not $80K for sure.
Now, if you, as an investor in the stock, or the real estate market can’t get $4,000 income, gain, revenue, return on $80K, then you are so dummy! The $4,000 is from the interests on the $80K at 5% those charges again, are not paid yet!
The death benefit pays at the end when you or the client kicks the can! Jesus!
On top of that, who cares! Just pay your monthly cost of insurance if you don’t want to pay the excess and get a loan! As I explained before, you are being conservative when loaning only $80K, lots of $ are left there to pay for hard times. Is that hard to understand? When you get to year 10, you almost get $100K and loan $100K.