60 Bill Black: The Math and Taxes of Life Insurance

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welcome to

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fun with annuities with your host me

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stan

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the annuity man america's annuity agent

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can annuities be fun

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can contractual guarantees be fun

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absolutely they can

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find out the brutal facts about

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annuities with no sales pitches or high

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pressure nonsense

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just the brutal and factual annuity

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truth which is all you need to hear

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let's have some fun with annuities and

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let's have that fun

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start right now

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[Music]

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welcome to fun with annuities i'm your

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host stan the annuity man america's

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annuity agent license in all 50 states

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i'm so glad you joined us for this

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podcast episode

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we have a life insurance expert now

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annuities are

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issued by life insurance companies but

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life insurance and annuities

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are two separate strategies um i do not

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sell life insurance i have a ton

1:00
of life insurance on myself but um

1:04
pretty much the top uh person in the

1:07
life insurance

1:08
industry and he's a been a thought

1:10
leader for decades he's been in the

1:12
business for over 40 years

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i mean he's a personal friend we've

1:16
spoken at

1:18
at events together we've spoken you know

1:20
at the same time

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you know we presented life insurance and

1:23
annuities at the same time

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i trust him period for all things life

1:28
insurance

1:29
a little bit about him he's six foot

1:30
eight inches tall i'm six foot six but

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so when we speak it's it's a pretty

1:34
interesting view we look like a tag team

1:37
wrestling match

1:38
he resides in winter park florida he's a

1:40
triathlete

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um winter park florida is a little bit

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uh is part of

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the nicer part of orlando let's just put

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it like that but boy does he have some

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credentials

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i was talking to him recently and i said

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you know he's been

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uh and i'm gonna look down and read it

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um

1:56
core to the table top of the table all

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of that stuff

2:00
that's unbelievable to qualify for he

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did that 20 years in a row and just

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stopped

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applying for it because he'd done it so

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so many times and there's so many

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plaques on his wall

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he didn't have enough space for it but

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his name is bill black and he is going

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to be

2:17
and is our life insurance expert and i

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want to welcome him to fun with

2:21
annuities

2:22
bill welcome to the podcast stan thank

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you so much for having me today i

2:26
appreciate this

2:28
absolutely so let's just jump right in

2:31
bill

2:32
just give everyone a an overview

2:35
of the life insurance industry

2:39
today in factoring in covin and all that

2:41
what what's happening what have you seen

2:43
is it

2:44
um what's happening in that life

2:46
insurance space

2:47
well what's really affecting the life

2:49
insurance you know of course we always

2:51
have to pass a physical exam

2:52
and with a 99 survival rate on the covet

2:56
issues you know absent any comorbidities

2:58
uh heart issues diabetes which are you

3:01
know the the

3:02
mitigating factors with covid somebody

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probably wouldn't have passed the

3:05
physical with that anyway so the cove

3:07
had really

3:08
what we've seen is it's doing more to

3:10
keep the examiners

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from getting to the people to get the

3:15
examinations done

3:16
more than anything else i'll tell you

3:18
what's really affecting the life

3:19
insurance industry today

3:21
the zero interest rates and and that's

3:24
had a significant effect on the market

3:26
there are actually insurance

3:27
companies that have gotten out of the

3:30
life insurance business because of the

3:31
zero interest rates

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and that presents a whole different set

3:35
of challenges

3:37
and uh the different type of policies

3:39
that are available as a result of that

3:41
let's go deeper into the zero interest

3:43
rate effect uh into life insurance

3:45
policy because obviously in the annuity

3:47
world

3:47
when someone there's there's many types

3:49
of annuities i always tell people if you

3:51
hate all annuities then you hate your

3:52
social security because that's an

3:53
annuity

3:54
but there's lifetime income streams uh

3:57
you know that's that's the monopoly that

3:58
annuities

3:59
have is providing an income stream you

4:01
can never outlive and that that pricing

4:02
is primarily based

4:04
on your life expectancy at the time of

4:05
the time you take the payments

4:08
interest rates play a secondary role but

4:09
there are annuities that are

4:11
100 subject to interest rates which is

4:14
like multi-year guarantee annuities

4:16
fixed rate annuities

4:17
in the life insurance world explain how

4:19
interest rates

4:20
affect policies okay so

4:24
let's say that take a rudimentary

4:26
example let's say that you want a

4:28
million dollar policy

4:29
and let's say that your life expectancy

4:32
is

4:32
20 years earning zero interest what are

4:36
you going to do well you got to put away

4:37
50 000 a year

4:38
every year for the next 20 years because

4:41
if the insurance company can't earn

4:42
anything on the money

4:44
then you know there's no discount

4:47
so to speak plus adding back in their

4:50
overhead for their

4:51
cost of doing the examination their

4:53
office space their employees etc

4:56
so it becomes kind of like how do we how

4:58
do we make this

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uh financially viable for all of our

5:03
clients and so one of the things i look

5:05
at

5:06
is what is the internal rate of return

5:08
on the policy just to give you an

5:10
example

5:12
working with a client yesterday who's 70

5:15
years of age

5:16
he has a term insurance policy and that

5:18
term insurance policy

5:20
is is is almost over but it is what is

5:24
called convertible to permanent

5:26
insurance

5:26
so what convertible means is you have a

5:28
term insurance policy

5:30
the premium is level for a number of

5:32
years what happens at the end of the

5:34
level period man that premium is going

5:35
to get pricey

5:37
and so what you can do is you can say

5:40
thank you

5:41
i don't want this term insurance anymore

5:43
mr insurance company give me a permanent

5:45
policy

5:46
the part that's good about that is they

5:47
will issue that new policy without

5:50
any evidence of insurability number one

5:53
and

5:53
issue it at the health status you were

5:57
when you bought the term policy so he

5:59
was super preferred

6:01
non-tobacco user if he today

6:04
had had multiple heart attacks stints

6:07
diabetes ever i'm just thinking of any

6:09
crazy

6:10
out there on the they still would have

6:12
reissued they still will reissue

6:15
that new policy that converted policy at

6:17
the super preferred non-tobacco

6:19
rates so my point being that most of the

6:22
time you want term insurance because you

6:24
just want

6:25
the coverage and the protection right

6:27
right and so

6:29
one of the one day maybe you say well

6:30
you know i really do need this insurance

6:32
permanently or i'm uninsurable now i

6:34
need some type of protection you get to

6:36
convert it

6:37
so the question of course becomes what's

6:39
my premium going to be if it's permanent

6:41
insurance it's going to be pretty

6:42
expensive

6:43
and then of course the natural question

6:45
is well i can probably take those

6:46
premium dollars

6:48
and invest it and have it grow to the

6:51
same amount as the

6:52
survivors benefit and so what i do is i

6:55
look at what's called the internal rate

6:57
of return

6:58
what would you have to earn on that

6:59
premium stream

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to have a grow to an amount equal to the

7:03
survivor's benefit

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it's an appropriate it's an

7:06
apples-to-apples comparison for sure

7:07
yeah you can put

7:08
open up an excel spreadsheet just run

7:10
the numbers and what that irr means at

7:12
any particular

7:13
point in time or any like five years

7:16
from now 10 years whatever point in time

7:17
you're looking at

7:18
what would you have to earn to have that

7:20
premium stream grow to the survivor's

7:22
benefit and you can excel spreadsheet it

7:24
if this client lives to 90 years of age

7:26
in this particular conversion option

7:29
he would have to make eight percent per

7:31
year every year

7:32
after taxes to have the to have

7:37
right to to beat to

7:40
to have that premium stream grow to the

7:41
survivor's benefit now tell me the day

7:43
you're going to die

7:44
yeah i'll tell you the day you're but

7:45
life expectancy is 87 years of age right

7:47
so

7:48
because he's not tobacco uh excellent

7:50
today i i pushed it out to 90.

7:53
eight if you could promise a client and

7:55
that's a guaranteed

7:56
return if you could promise a client an

7:58
eight percent uh

8:00
after tax rate of return for the next 20

8:01
years you you

8:03
they built a statue of you on wall

8:05
street i mean yeah

8:06
right that's that's crazy and i yeah i

8:09
was just thinking as you were as you

8:10
were

8:10
laying that out so simplistically to

8:13
everyone and it's

8:14
it's so easy to understand obviously if

8:15
you have a term client term policy

8:17
that's

8:17
that's um you know coming up you need to

8:19
contact bill and his information will be

8:21
on our site

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but i quote bill all the time he he said

8:24
something a long time ago and bill i've

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known bill for a long time

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one of the first things he ever told me

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is stan

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one out of one of us is gonna die and i

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have quoted him on that

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so many times but i actually followed up

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with that and i have another one that

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i've always said which is

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life insurance is the best return on

8:41
investment you you will never see

8:43
because you're dead and bill bill just

8:46
gave

8:46
that uh example and it's a contractual

8:49
example it's a transfer

8:51
of risk just like annuities are a

8:53
transfer

8:54
of risk so so interest rates obviously

8:57
would increase the

8:58
the roi yeah so the more the insurance

9:02
company can earn

9:03
on your premium dollars the less they

9:05
have to charge you

9:07
right so for example if you're going to

9:10
um earn 10 a year on the investment

9:13
return

9:14
you know so so part of their ultimate

9:17
amount that they have to pay out is

9:18
coming from earnings they can charge you

9:20
less

9:20
for that premium and we saw that for

9:23
years and years for example in the 70s

9:25
you were paying less return insurance in

9:26
the 60s and in the 80s less than the 70s

9:28
and

9:29
why well not only interest rates but

9:31
also mortality because as we live longer

9:34
they collect premiums for a longer

9:35
period of time so there's another

9:37
what's called actuarial gain there so

9:40
these two things fit together now

9:42
uh because life insurance is a shifting

9:46
of the risk and what what

9:47
are are we talking about well if you

9:50
drive let's say

9:51
what a fifty thousand dollar car thirty

9:53
thousand dollar car whatever

9:55
it is right if you don't insure your car

9:57
and you

9:58
wreck yeah you gotta pay that whole

10:00
thing out of pocket

10:01
so by buying car insurance you hope

10:03
you're not going to have an accident but

10:04
why are you only paying a fraction of

10:06
the price

10:07
because when everybody throws that money

10:08
into one pool and they pay out the

10:10
people that

10:11
right it's sharing the risk right so

10:13
that's what insurance is

10:14
it's really assigning the risk to

10:17
somebody else

10:19
and the thing that people say to me uh

10:22
every now and then is you know i'm

10:23
betting

10:24
i'm going to die and their bet and i'm

10:25
going to live and that's not it at all

10:27
with life insurance

10:28
life insurances we're all going to die

10:30
and many people say look i got

10:32
i got a lot of money i'm worth 10 15 20

10:34
million dollars i get that

10:36
but there's two problems with that one

10:38
is often those assets are not liquid

10:41
and number two the irs wants 40 of it

10:44
and so the life insurance is really

10:46
liquidity

10:48
it allows us to have liquid assets

10:51
uh to settle debt to provide for

10:54
beneficiaries to provide for charities

10:57
a lot of times i'm getting off point but

10:58
a lot of times you'll see at these

11:00
universities

11:01
uh somebody's got a building or a wing

11:03
or a stadium in their name

11:04
often that was paid for with life

11:06
insurance and if you think about it

11:09
maybe a 10 15 20 30 million dollar

11:12
stadium was built or that's probably

11:13
cheap right

11:14
um but for 10 cents on the dollar with

11:16
life insurance and you get to deduct the

11:18
premium if it's charitable so

11:19
there's all sorts of neat little things

11:21
and remind people that

11:23
when when if you're the beneficiary of

11:26
your life insurance policy

11:27
that lump sum is coming to you i'll let

11:29
you fill in the

11:30
blank income tax-free

11:33
and judgment credit proof right hello

11:37
yes so if the if and

11:40
uh if the uh insured

11:43
had debts of whatever volume it doesn't

11:46
matter

11:47
right those those survivors benefits go

11:50
to the surviving beneficiary

11:52
income tax rate because the proceeds of

11:54
life insurance are income tax free

11:57
and protected from the claim of judgment

11:59
creditors in virtually all jurisdictions

12:01
certainly in florida and many other

12:03
jurisdictions so there's a lot of uh

12:07
a lot of benefit to that and bill is a

12:10
nation i mean he's national like i am i

12:12
mean

12:13
he he's not regional he's national so

12:15
regardless where you're living give

12:17
you know touch base with him actually

12:19
his his website

12:20
which i'm going to put on mine so you

12:22
can get to it but if you're dying

12:24
to get to them right now it's it's w

12:27
h b c o dot com

12:31
w h b as in boy co

12:34
dot com that's how you get to bill black

12:37
bill let's

12:38
go through um just some basic

12:41
uh the types of life insurance whether

12:44
it's term it's whole life it's index

12:46
universal

12:47
can you do a a brief 30 000 easy to

12:50
understand

12:52
um life insurance life insurance types

12:54
for people out there that are listening

12:56
to us

12:57
sure so there's two basic types term and

12:59
permanent

13:00
right so term insurance we're all

13:01
familiar with uh you have a very thin

13:04
small premium you're renting your

13:07
insurance right

13:08
so back in the old days and i mean way

13:11
back

13:11
they had something called a rt or art or

13:14
annual

13:15
renewable term okay and the premium

13:17
started off

13:18
real cheap and then in year two it went

13:20
up and in year three it went up and year

13:22
four it went up and every year it went

13:23
oh no why does it go up

13:24
well because every year we're a year

13:26
older and we're a year closer to the end

13:28
of the line right that's right

13:29
and then every year it was like oh gosh

13:31
you went up again you know

13:32
so what they did was they being the

13:35
insurance industry came out with what is

13:36
called

13:37
level premium term insurance and you can

13:39
buy a term insurance policy that has a

13:41
level premium for 10 years 15 years 20

13:43
years or 30 years

13:45
now how can they make it level well they

13:47
charge a little bit more in the first

13:48
couple of years and they charge a little

13:49
bit less in the

13:50
you know so it's just a flat premium and

13:52
and that's really the best in my mind

13:55
type of insurance and surprisingly

13:58
you probably don't want to buy five year

14:00
level term and people go well why not

14:02
well because it's almost the same price

14:04
as ten year level term surely if you

14:06
price it out so it's like

14:07
why pay for five when you can pay the

14:09
same thing and get a level for ten right

14:12
and so you know you've got this premium

14:14
level for 10 15 20 30 years

14:16
why do you buy term and temporary

14:18
insurance man lots of reasons first of

14:20
all it keeps your premium

14:21
down and what do we really want we want

14:23
it for protection it's not an investment

14:25
i'm going to be the first guy to say

14:26
it's not an investment it's a

14:28
non-correlated asset

14:30
it is but it's liquidity that's really

14:32
what it is right

14:33
and so a lot of clients say listen the

14:35
reason i need term insurance is because

14:38
i'm a developer i'm building this big

14:40
project and the bank says listen we'll

14:42
loan you the 100 million dollars or

14:44
whatever it is right

14:45
or somebody's got a mortgage for a

14:46
million or two million or whatever

14:48
i i just need the insurance in case i

14:50
die the bank wants their money back

14:52
that's a temporary need you're going to

14:54
buy term insurance

14:55
you know my kids are going to be out of

14:56
school

14:58
you know they're three now they'll be

15:00
out when they're 21 22. i really need

15:02
the liquidity for that all sorts of

15:03
temporary reasons right

15:06
now when you get a permanent need for

15:08
insurance

15:10
what are you going to use well most

15:11
people think whole life i pay a premium

15:13
every year until i'm a hundred

15:15
and a age 100 the face value equals a

15:17
cash value

15:18
what's wrong with that you're paying too

15:19
much in premium right and here's the

15:21
reason i don't like cash value

15:24
let's say you've got a million dollar

15:25
policy and a 300 000

15:28
cash value you pass away they're going

15:30
to pay you a million dollars

15:32
where's my 300 000 cash value i i know

15:34
what i'm going to do i'm going to beat

15:35
the system

15:36
i'm going to borrow that 300 000 out and

15:38
then when i die my wife's gonna get a

15:40
million uh oh

15:41
sorry charlie uh here's a million dollar

15:44
survivors benefit you borrow 300 000

15:46
from us in a policy loan your

15:48
beneficiary gets the net of 700

15:50
000. so then i got to throw it back to

15:52
you and say

15:53
what good is your cash value you know

15:55
what keep your cash value

15:56
give me the thinnest smallest premium

15:59
possible to guarantee the death benefit

16:01
until i'm 100 or 110

16:03
and you know where my cash change is

16:04
going to be it's going to be on my

16:05
balance sheet and premium savings and

16:07
stocks or bonds or mutual funds or

16:09
annuities right and so when i pass away

16:12
my survivor is going to get not only the

16:13
survivor benefit

16:14
but these excess assets i've got on my

16:16
balance sheet for my premium savings

16:18
because all i want is the survivor's

16:19
benefit

16:21
so how are we going to get this

16:22
permanent insurance

16:24
they've got something called universal

16:25
life they've got something called

16:27
uh indexed universal life

16:31
etc so when you have universal life it's

16:34
a lot like buying term and investing

16:36
the difference you pay a premium it goes

16:38
into the cash value of the policy

16:40
they take away what we call coi the cost

16:43
of insurance and the balance is earning

16:46
interest

16:46
and so as time goes by

16:50
you know some of these policies have

16:51
guaranteed premiums that they

16:53
for this particular premium at your

16:54
particular age and health status

16:56
you pay this premium every year till

16:58
your age 100 the death benefit the

17:00
survivor's benefit

17:01
is guaranteed right that is the type of

17:04
policy that is

17:05
fast disappearing because of the zero

17:07
interest rates

17:09
so the other thing that they've uh

17:11
gravitated to they being the insurance

17:13
companies is what's called

17:14
indexed life so how does that work you

17:17
pay a premium

17:18
it goes into the cash value they take

17:19
away the cost of insurance

17:21
the balance of it goes into uh the

17:24
standard and poor's

17:25
typically uh that's your index call

17:28
option

17:29
like a call option right right just like

17:30
an indexed annuity right exactly what it

17:32
is

17:33
so if the if the standard poor's in this

17:35
example if the index goes down

17:37
your option expires without value

17:40
there's no loss to you but there's no

17:42
gain either

17:43
if the market goes up that option is

17:46
exercised at a profit

17:47
and and part or all of that gain is

17:50
allocated to your policy

17:52
and so that's really kind of where

17:53
things are going is there's a little bit

17:55
of uh

17:56
you know the risk is being shifted back

17:58
to the insured in that type of an index

18:01
option so what you've got to do is ask

18:03
yourself what are the guarantees in this

18:04
policy that's uh

18:05
okay and you taught me that a long time

18:07
ago one of the other things that bill

18:09
drove into me in my head you know as we

18:12
were traveling and speaking to

18:14
to the large events the financial shows

18:17
and things like that

18:18
is by the most death benefit you can for

18:21
the least amount of money

18:23
right and that's a basic basic thought

18:26
and i totally believe that now once we

18:28
get into the index universal life and

18:30
and those type of policies that's where

18:32
the hopes and dreams

18:33
are and as you know the fun with

18:35
annuities um

18:37
saying is living the reality not the

18:38
dream and i also say you own an annuity

18:41
for what it will do not what it might do

18:42
same thing with life insurance you know

18:44
for what it will do not what it might do

18:45
yeah but the u but the sales pitch

18:48
unicorns chasing the butterflies

18:49
you know all of the planets aligning

18:51
themselves are now

18:53
rolling into these index uni index

18:55
universal life policies where

18:57
i have seen some of the assumptions

19:00
so high that you'd have a you'd be the

19:02
world-class money

19:03
manager if you ever got that or

19:05
back-tested returns which in some states

19:08
are illegal to show and i hope it

19:09
becomes illegal because you can juice

19:11
those numbers

19:13
um which leads leads me to i really want

19:16
your comment on this because this one

19:18
drives me

19:18
crazy bill and i and because you're the

19:21
life insurance expert

19:23
i need you to just slice this up

19:25
factually and and

19:26
put this one to bed once and for all got

19:29
a call the other day and the guy said

19:30
well i'm considering

19:31
index universal life or etc with the

19:34
cash value

19:35
so i can get tax-free income oh sure now

19:38
that's a neat sales pitch um but the ir

19:41
the irs hasn't approved that uh when you

19:44
take money out of a bank

19:46
you know and you get a loan from a bank

19:48
that's not income when you take money

19:50
out of a life insurance policy if i'm

19:51
not mistaken bill

19:53
that's a loan that's not income am i

19:55
right about that

19:56
yeah that's why it's tax free because

19:57
it's a loan so go to the bank today

19:59
go to the bank today and borrow a

20:01
million dollars go to loan your son or

20:03
daughter some money today nobody's

20:04
paying tax on those loans that's not

20:06
income but

20:07
when agents and advisors semantically

20:10
and play these word games saying saying

20:13
tax-free income

20:15
the trusting public is saying well that

20:17
sounds good martha

20:19
that's fantastic i love tax free i don't

20:22
want to pay taxes

20:23
it's alone well here's a couple of

20:27
things that are going on

20:28
first of all it's semantics number one

20:31
number two it is true to a degree

20:35
that's the important part it is true to

20:37
a degree

20:39
around the edges though bill you know

20:41
right no no no let me explain what's

20:42
going on so i see some things that

20:45
they're all right and i see some things

20:47
that you just want to scream

20:49
give you an example of one i saw the

20:51
other day i get a lot of referrals from

20:53
cpas okay

20:55
and so he said bill look at this

20:57
client's

20:58
analysis he was going to pay a

21:02
premium for 10 years

21:05
two years later he was going to borrow

21:07
or withdrawal

21:08
90 of what he paid into the policy back

21:11
is what's called a withdrawal

21:13
that's not taxable because it's your

21:14
cost basis then he was going to wait

21:16
another five years

21:18
and take out of that policy

21:22
something like 15 of the cash value

21:24
every year for the next 30 years

21:26
and i went over that with a cpa and i

21:28
said this is mathematically

21:30
impossible and the cpa looked at it and

21:33
he goes

21:35
where do these numbers even and i said

21:37
yeah it's all smoke and mirrors right

21:39
absolutely

21:40
so beyond what you're saying some of

21:42
these illustrations

21:44
just aren't even mathematically possible

21:45
but here's here's what's going on

21:48
listen pay these premiums into these

21:50
policies

21:52
that's after-tax money it's going to go

21:55
into these policies and the index is

21:56
going to return all these

21:58
wonderful rates of return because that

21:59
aren't guaranteed no no

22:01
well well you know if the index goes up

22:03
you're going to get credited if the

22:04
index goes down you're not going to lose

22:06
anything so

22:07
you know the market did 18 last year and

22:10
i'm only projecting seven percent for

22:11
you

22:12
so you know you're going to do really

22:13
good oh my gosh now

22:15
you know let's ignore the fact that you

22:16
know the market fell forty percent no

22:18
eight and let's let's ignore the fact

22:20
that you know

22:21
okay we're gonna ignore that reality

22:23
okay exactly

22:24
now you get x years down the road

22:28
and you've got all these wonderful

22:30
policy values

22:32
and you're going to take tax-free income

22:34
from the policy now why is it tax-free

22:37
well because in the early years you're

22:39
not taking a loan you're taking a

22:40
withdrawal

22:41
and the reason it's a withdrawal is

22:43
because that's considered a return of

22:45
your principal so that's not taxable

22:48
so once you withdraw down to your

22:49
principal now you start taking loans

22:52
because if you don't

22:53
take loans and you take withdrawals and

22:55
now you're getting into the gain of the

22:56
policy and if it wasn't a loan

22:58
that would be taxable okay sounds good

23:01
so i'm going to take a loan

23:03
from this policy hey what's not to like

23:06
okay

23:07
well sorry but because it's a loan

23:09
there's interest

23:11
on that loan correct and you either

23:14
pay the loan interest in cash which

23:17
nobody wants to do or that's okay you

23:20
know what don't pay that interest back

23:22
we'll just take the interest out of the

23:24
policy value

23:26
so now what happens is not only do you

23:28
have the amount that you borrowed

23:31
but it's increasing by the interest that

23:33
you're not paying out of pocket

23:35
so that doesn't sound like a big deal

23:37
let's say that the interest is

23:40
let's let's be easy and say it's three

23:42
percent okay okay you borrow a hundred

23:44
thousand dollars in year one yeah what

23:45
the heck right it's 103. my loan's 103

23:48
with interest what's the big deal is

23:49
only three grand

23:51
it's not a big deal until you add the

23:53
second year's hundred thousand on it

23:54
and the third year's hundred thousand in

23:56
the fourth year now all of a sudden and

23:58
keep in mind interest it's

24:00
compounded not simple so by the time

24:02
you've taken 10

24:03
loans out of the policy now that's you

24:06
know

24:07
30 000 plus the interest on the interest

24:10
that you haven't been paid

24:12
now what happens oh wait a minute

24:13
weren't we talking about

24:15
the market fell so your gains or your

24:18
credits on your

24:18
cash value growth isn't what you

24:20
anticipated aren't we talking about

24:22
interest rates have been falling lately

24:23
so all those original projections from

24:25
20 years ago that the interest alone was

24:27
going to be six

24:28
oh wait a minute every year there's a

24:30
cost of insurance

24:32
they take away from that policy you mean

24:34
to tell me that the board of directors

24:36
can

24:37
increase that cost of insurance at will

24:39
and they do

24:40
so how do you think when a policy that

24:42
you bought 20 years ago

24:44
at a minimum guaranteed rate of five

24:46
percent on the cash value

24:48
and they can't get five percent of their

24:50
investment portfolio

24:52
oh yeah i know how we can fix that we'll

24:55
increase the cost of insurance on this

24:57
class of policies ooh

24:58
now not only are you you're paying

25:00
interest on your loans but now you got

25:01
higher costs coming out

25:03
so your cash value is decreasing at an

25:06
increasing rate

25:07
okay so some people say yeah yeah yeah

25:09
so listen

25:11
i thought i was going to take that loan

25:13
out for 10 years or 15 years

25:15
but because of all the stuff you're

25:17
telling me i'll only take it out for

25:18
eight years well

25:19
wait a minute what happens is when you

25:22
quit taking that

25:23
loan out that loan's balance still

25:26
exists and they still are charging you

25:28
interest

25:29
and if you don't pay the interest and

25:31
that policy what i call

25:33
cannibalizes itself right then what

25:36
happens

25:36
is the policy collapses of its own

25:38
weight for lack of a better

25:40
explanation and there's something called

25:42
a forgiven loan

25:43
because when that policy lapses without

25:45
value the loan you've borrowed

25:47
you don't have to pay it back they

25:50
forgive it

25:51
yeah you took the policy out all that

25:53
money there's no more money left to

25:55
support the policy so the policy lapses

25:57
you don't have to

25:57
pay us back that's okay but they give

26:00
you a 1099

26:01
because it's a forgiven loan and a

26:04
forgiven loan is taxable as ordinary

26:06
income

26:06
so if you've got a million dollars that

26:08
you've borrowed out of that policy over

26:10
the last 10 years

26:11
accumulated interest on top of it and

26:13
everything else this year you've got a

26:15
million dollars of

26:16
phantom income that is subject to income

26:19
tax now

26:20
what state do you live in well if you

26:22
live in florida okay it's only 37

26:25
because let me guess let me let's let's

26:26
both agree that if you got a million

26:28
dollar loan that's forgiven that you get

26:30
a 1099 for

26:31
it's probably going to throw you into

26:32
the maximum tax bracket i think we

26:33
should both agree on that

26:34
absolutely now what if you live in

26:35
another state like california like

26:38
new york or other high-tech state that

26:40
costs you half a million dollars

26:42
wow wow right wow so i had a client

26:46
that um said bill my my son-in-law

26:49
is being shown these wonderful and you

26:51
know if you look at it

26:53
the income that's coming off those

26:55
projections is like

26:56
sky-high incoming quotation marks

26:59
right right right right the yes

27:03
and so i i mean the first thing i did

27:05
was i i looked at the projected values

27:08
and i said right but look at what's

27:09
guaranteed

27:11
and after he took out the first loan

27:13
income whatever you want to call it

27:15
guarantees went to zero so you know it's

27:18
like you and i are both

27:20
saying this is a you know if you go into

27:22
any business situation what are you

27:24
looking at

27:25
what's the best i can do what's the

27:26
worst i can do if you can live with the

27:28
worst then it's okay

27:30
right right and if the worst you're

27:32
gonna do in a policy like this

27:34
is take the first quote quote income out

27:36
and the policy collapses

27:38
probably not a good deal well and and it

27:41
just

27:41
all comes back to if it sounds too good

27:43
to be true or looks too good to be true

27:45
it is every single time and you're not

27:47
focusing on the contractual guarantees

27:48
you're focusing on

27:50
the pie in the sky numbers that the

27:51
agent or advisor wants you to do that

27:53
and the other thing this we're not going

27:55
to mention any names or any type of

27:57
marketing that's going on because

27:59
we're just not but but what's happening

28:02
in the industry showing people

28:03
a quote-unquote tax-free income this has

28:06
been around

28:08
bill you and i both know for for 30

28:09
years they just keep putting lipstick on

28:11
the pig

28:12
and selling hopes and dreams and the

28:14
stories you know get better and

28:16
and and sexier etc um

28:19
p i got a call the other day which is

28:21
one of the most disturbing

28:23
life insurance calls i've ever received

28:25
this person was being

28:28
advised to cash in their ira

28:33
pay the penalty and then front end load

28:36
a life insurance policy which i want you

28:39
to not only talk about that

28:40
but talk about the phrase modified

28:43
endowment

28:44
contract and the reason people need to

28:47
understand what that is

28:49
can you cover both this ridiculous um

28:52
and people and people every day are

28:55
cashing in their iras to buy life

28:57
insurance policies

28:58
cover that and cover the mech modified

29:00
endowment contract

29:01
yeah well first of all now you're

29:04
starting to irritate me right

29:06
because when people when people say this

29:08
these are the type of people

29:10
that are advising that don't understand

29:12
taxation right they don't understand

29:14
what's called present value and future

29:16
value

29:17
right and and and the growth trajectory

29:20
so

29:20
let's talk first of all about cashing

29:23
our

29:24
ira in now your ira when you cash it in

29:27
is is taxable as ordinary income

29:30
and if you're under 59 and a half you're

29:32
going to pay a 10 penalty

29:34
in addition to the taxation right right

29:38
so let's just say for sake of

29:39
conversation let's just say that's 35

29:42
percent

29:43
the 10 and a 25 will be generous and say

29:45
it's a 25

29:47
uh federal tax bracket and a 10 uh

29:50
excise tax you're paying

29:52
35 we'll forget state income taxes and

29:54
everything else

29:55
if the market fell by 35 today

29:58
you would be shell-shocked right you

30:02
would you would just be sitting here

30:03
going wait a minute

30:04
but somehow we're being advised to let

30:07
the tax authorities take 35 percent of

30:09
our money and that's okay

30:11
yeah now secondly when you take that

30:14
money and you reinvest it in some

30:15
alternate investment you got a whole you

30:18
got to

30:19
dig yourself out of right you got to

30:22
earn

30:22
you know 50 on your money right you only

30:25
got 65 percent left you got to earn

30:28
30 000 and 35 000 or 50 of what you got

30:30
left

30:31
to get back to even okay wait a minute

30:34
there's an

30:34
ugly reality here this is why i say life

30:36
insurance is protection

30:39
when you buy life insurance if you

30:41
bought

30:42
a mutual fund today just the the average

30:45
listener

30:46
today is not going to want to buy what's

30:49
called a retail

30:50
a share that means you're going to pay

30:52
five and a half percent

30:53
off the top to sales loads so you've got

30:57
95 cents on the dollar working for you

30:59
okay that's not really a great

31:02
right but somehow i'm supposed to let 35

31:06
percent of the value of my ira go

31:08
in taxes and then buy a life insurance

31:10
policy that has front loads like premium

31:13
tax in some states

31:14
and other loads so now the insurance

31:16
company and the tax authorities are

31:18
going to take

31:18
five to ten percent of what i pay into

31:20
that policy

31:22
now i'm going to have a surrender charge

31:23
on that policy if i want my money back

31:25
i'll be lucky if i'm getting 40 cents on

31:28
the dollar

31:29
or even 35 cents on the dollar and now

31:31
i'm going to wait all of this time

31:33
and then start taking income out that

31:36
isn't even guaranteed

31:38
and it's not even income well yeah i

31:40
mean it's a loan right

31:41
right it's it's flow is of some type

31:44
if we just took that ira left it where

31:47
it was

31:48
projected it forward at a three percent

31:50
rate of return

31:52
maybe even two percent right and then

31:55
looked at the income we were going to

31:57
take out of that compared to this

31:59
wonderful recommendation uh client's not

32:02
going to be any better off

32:04
and now what you're doing is you're

32:06
taking a leap you're taking a leap of

32:07
faith

32:08
and i hate to say it but probably going

32:11
to be severely disappointed

32:14
explain a modified endowment contract so

32:17
what happens

32:19
is back when interest rates were at 16

32:22
18 percent remember

32:23
jimmy carter yeah go get a cd for 16

32:27
18 it was like wow right yeah well what

32:31
happened back then where life insurance

32:32
policies were basically paying about

32:34
three percent so what did you do

32:36
you went and borrowed your cash value at

32:37
three percent bought a cd at 18

32:40
you back then you could deduct the

32:41
interest right and so the insurance

32:43
company said listen stan don't do that

32:45
i know what you're doing we're taking

32:47
the money that you pay us and we're

32:48
investing in getting a higher rate of

32:50
return anyway

32:51
and we're going to credit this higher

32:52
return to your cash value so there's no

32:54
need to go through all these

32:55
machinations

32:56
instead of you getting a 16 cd we're

32:59
crediting 16

33:00
to your cash value so just go to these

33:02
newer type of policies

33:04
well people are smart in certain ways

33:07
and so what happened

33:08
was and it all starts in california

33:11
they started selling this thing called

33:13
single premium whole life

33:15
listen stan give me a million dollars

33:16
and i'll give you a million dollar

33:17
insurance benefit

33:19
why would i do that uh well because life

33:21
insurance grows without taxation on the

33:23
cash value

33:24
you can loan or borrow that money out of

33:26
the cash value without paying tax on it

33:28
and then when you pass remember that

33:30
money goes income tax free to your

33:32
beneficiary and outside the reach of

33:34
judgment creditors

33:36
and so by calling a life insurance

33:38
wrapper around it it didn't cost you

33:39
anything because if you give me a

33:40
million i'll insure you for a million

33:42
there's no risk so i'm not charging you

33:43
for the insurance

33:44
right and uh you're still getting the

33:46
you know good rate of return and you're

33:47
not paying tax on it because the cash

33:49
value growth

33:50
the growth in the cash value isn't

33:51
taxable you can borrow that money out

33:53
loans aren't taxable you know everything

33:55
like that so the irs after a while said

33:58
wait a minute hold on

34:00
this isn't life insurance it's not

34:03
insurance because there's nothing at

34:04
risk

34:05
right so we're going to change the rules

34:07
and we're going to say for every dollar

34:09
you have in cash value you have to have

34:11
a certain multiple of survivors benefit

34:16
and that's called the corridor so that

34:19
corridor

34:20
is shown in every policy and so let's

34:22
say at age

34:23
40 i'm just picking out numbers for

34:25
every dollar you have in cash value you

34:26
got to have two dollars and 40 cents and

34:28
survivors benefits

34:30
right yeah so if you don't have that

34:33
corridor if you're below the corridor so

34:35
let's say in this example you don't have

34:37
two dollars and forty cents

34:39
uh multiple you've got a dollar forty

34:41
multiple

34:42
that's a modified endowment policy so

34:45
when you pass away the survivor's

34:47
benefit is still

34:48
income tax free but when you access

34:51
policy values in the form of a loan or

34:53
anything else

34:54
it's what's called lifo last in first

34:57
out

34:58
so now the first loan you get or

35:00
withdrawal you take is considered

35:02
the return of the earnings not your

35:05
principal

35:05
so it's taxable as ordinary income down

35:09
until you've taken all the earnings out

35:10
and then

35:11
once you're down below that you take the

35:13
money out in principle then there's no

35:14
tax on that but so it's a lifo

35:17
but the survivor's benefit is still

35:18
income tax free so

35:20
if you're buying life insurance for the

35:22
survivor's benefit mech doesn't really

35:24
matter

35:25
but if you're buying life insurance for

35:26
the survivors benefit you're not going

35:28
to have on that because you're not going

35:29
to load it up to build up the cash value

35:31
right so it's kind of a mutually

35:33
exclusive thing so those mechs come in

35:35
and these overloaded

35:39
look at all this wonderful cash value

35:41
type right projection

35:43
and yeah and people just have to be

35:45
careful about that

35:46
um you know once again you can contact

35:48
bill his his site is w-h-b-c-o

35:52
if you have a policy you can you know

35:54
he'll take a look at it and tell you the

35:55
brutal and factual truth about it

35:58
and i forgot to mention earlier that he

36:00
is also a specialist and

36:01
and nationally known for employer

36:05
um benefit plans um and you know for

36:08
all size companies he's he's a master of

36:11
that

36:12
you know he's been in the business four

36:13
years but those his two lanes are that

36:16
employ your benefit plans and then uh

36:19
life insurance i mean you know doing it

36:21
for four decades you know

36:22
he's forgotten more than anyone will

36:24
ever know about life insurance i mean he

36:25
truly

36:26
you can if you you're just listening to

36:28
his his radio

36:29
tv voice he's got the best voice ever

36:32
but uh

36:33
i mean he does but it he understands

36:37
life insurance backwards and forwards

36:38
and i think the key thing here bill is

36:42
you can get through the sales pitch you

36:44
can get through the proposal and the

36:45
juice numbers

36:47
um for consumers out there and the

36:48
people that are listening to this on all

36:50
the podcast platforms

36:52
with fun with annuities and also my

36:54
youtube channel the fun with annuities

36:55
youtube channel

36:56
what would you tell the consumer to

36:59
watch out for

37:00
in the sales pitch world of life

37:02
insurance

37:04
well when you're buying life insurance

37:06
for a reason other than the life

37:08
insurance

37:09
when it's being positioned as an

37:11
investment

37:13
there are some times when that does have

37:15
merit

37:16
but often not right

37:19
and so the first thing you want to look

37:21
at is

37:23
why is it not just for the protection

37:27
and that's that's the first thing i

37:29
would i would be wary of if

37:31
if i may yeah

37:34
well and and we had a uh we did a

37:36
podcast recently with jack lindenberg

37:38
who's one of the

37:39
he's the top long-term care specialist

37:41
and there's such things called

37:42
asset-based

37:43
long-term care that's used uses life

37:45
insurance as a delivery system for that

37:47
benefit

37:48
but once again you're not buying it for

37:51
the life insurance

37:52
uh death benefit you're buying it for

37:53
the long-term care so there are

37:55
there are certain situations but

37:58
is it fair to say and i always say this

38:01
in the annuity industry if it sounds too

38:02
good to be true it is

38:04
is it fair to say that in the life

38:05
insurance side as well i'll tell you

38:07
what

38:07
the life insurance policies that have a

38:09
long-term care rider

38:11
are are fantastic and let me explain why

38:14
you buy a long-term care policy today

38:16
just a flat out long-term care

38:18
policy if you never use it you just

38:20
spent all that money

38:21
right goes down the rabbit hole

38:23
absolutely but these long-term

38:24
care policies see the thing about life

38:26
insurance is we're all going to die and

38:28
mortality

38:29
is pretty believe it or not exact at the

38:32
beginning of the year an insurance

38:33
company knows what they're paying out

38:34
claims at the end of the year because

38:36
mortality is what it is

38:37
yep okay so the thing about morbidity

38:41
which is what it's called when you have

38:43
long-term care is it's not predictable

38:45
right how many people are going to get a

38:46
heart attack this year how many people

38:47
are going to blah blah blah

38:49
so what happens is those long-term care

38:51
policies and i'm sure a lot of listeners

38:53
know this

38:54
the carrier can come back and say stan

38:55
we got to raise our rates this year

38:57
right we're going to lower your benefits

38:59
how do you get around that

39:00
you buy a life insurance policy with a

39:02
long-term care benefit

39:04
hooked onto it and here's how it works

39:08
they're going to pay you two percent of

39:11
the face value of the policy

39:13
for 50 months now most people i think

39:16
the statistics will show

39:18
last a little over three years right 36

39:21
months

39:21
correct so they're gonna pay you two

39:22
percent of the face value a month for 50

39:25
months

39:26
that's a little over four years so what

39:29
happens if you buy a

39:30
500 000 policy they're going to give you

39:33
10

39:33
000 a month for long-term care benefits

39:37
and that's tax-free and then when you

39:39
pass away

39:40
there's a little calculation right what

39:42
was the survivor's benefit

39:43
policy originally how much did we pay

39:45
out long-term care the rest goes to your

39:47
name beneficiary

39:48
income tax free and that is a fixed

39:52
price

39:52
there's no monkey business with it

39:54
there's no ifs ands or buts when you buy

39:55
the right policy that has the right

39:57
guarantees on it

39:58
but then they also have something called

40:00
an accelerated benefit writer

40:03
and if you've got less than six months

40:05
to live the typical policy they're all

40:07
the writers are all just slightly

40:08
different but the general idea is

40:11
if you've got six months left to live or

40:13
less

40:14
and you get a letter from a doctor

40:15
they'll pay you out a large percentage

40:17
of that survivor's benefit

40:19
today and it's tax-free now why do they

40:21
do that

40:22
well mathematically whether they pay it

40:24
out six months early or not doesn't

40:25
affect their

40:26
curve their mortality curve sure most

40:29
people don't pass

40:30
right now right like a car wreck like a

40:32
sudden heart attack they linger

40:34
what happens when you're lingering

40:36
you're running up medical bills

40:37
right and so by them giving you this

40:40
cash now it's really something that is

40:42
uh

40:43
public policy it helps the family not to

40:46
have that

40:47
first of all we've all had people pass

40:49
and it's really rough the last thing you

40:50
want is

40:51
a mountain of bills on top of it that's

40:53
just more stress right

40:54
so there are good things that come

40:56
wrapped in these life insurance policies

40:59
and you know what we do is we we look at

41:03
a client's

41:03
insurance policy like i got someone on

41:05
my desk today i've got this

41:07
insurance that i'm not paying anything

41:09
for i mean i've got a million dollars

41:10
and i pay 600

41:11
a quarter sure and i said yes

41:14
now here's a story about this client

41:17
this client has had severe health issues

41:19
severe health issues and uh they've got

41:22
other problems

41:24
well you know how long is that premium

41:26
for oh that's

41:27
the way it is for the rest of my life no

41:29
you know it's not right so i looked at

41:31
the policy and it was a 20-year level

41:33
term premium they thought it was

41:34
you know forever because they've had it

41:36
for 18 years right

41:37
well i say you know what in two years

41:39
this premium is going to go through the

41:40
roof

41:41
and they were just totally unaware of it

41:43
right so while it's still convertible

41:46
you you because those conversion windows

41:48
close they're not good forever right

41:50
there's a time when that conversion

41:51
windows close it's usually the end of

41:52
the level period or age 65

41:54
depending on what comes first now got

41:57
other policies where

41:59
another one came across my desk today

42:00
they had a 15-year term

42:02
policy one year left on it what are you

42:05
going to do at the end of you know next

42:06
year

42:07
rates are going to be if you stay with

42:09
this policy be going way way up

42:10
can we just do a simple mathematical

42:12
analysis this is where you are now this

42:14
is where we'd recommend you go

42:16
here's the difference in dollars it's a

42:18
sterile financial analysis

42:19
right it's not oh bought cash value oh

42:23
but i'm your nephew

42:24
oh i'm your golf buddy it's not about

42:26
nonsense right it's just

42:28
dollars it's math and taxes it's matt

42:31
hey um we got we got a one more segment

42:34
i kind of want to get to before we close

42:35
this out

42:36
and let's talk a little bit about you

42:38
remember you mentioned to me the other

42:40
day in preparation for this podcast

42:42
about the settlements with life

42:43
insurance can you can you cover that

42:46
for people because that's there's a lot

42:48
of misinformation out there about

42:49
settlements yeah yeah here's here's the

42:52
situation

42:53
you got to forget for a second life

42:55
insurance and think of it as an

42:57
asset right it's an intangible asset

42:59
just like a stock certificate right

43:01
sure so what happens to that insurance

43:04
well it's a lot like your

43:05
boat your car there comes a time when

43:07
you don't need it or want it anymore

43:10
and so you can just tell with the term

43:11
insurance you know what i don't want

43:13
this anymore i'm just going to let it go

43:15
i'm just not going to renew the premium

43:17
and goodbye

43:18
well another real life example got a

43:21
client that has a

43:22
750 000 term insurance policy he's had a

43:26
level premium for 20 years

43:27
next year the policy is going through

43:29
the premium is going through the roof

43:31
doesn't want the policy anymore right

43:33
wait a minute

43:34
don't just walk away from it and you

43:36
know now the insurance company's got all

43:38
that cash

43:39
you can sell that policy just like a

43:41
stock a bond or a mutual fund now who's

43:43
buying it right there was a comment you

43:46
made earlier

43:46
about non-correlated assets

43:50
so hedge funds are buying these policies

43:52
well why

43:53
well you've got a diversified stock

43:55
portfolio oh you've got some of it in

43:56
consumer goods some of an energy

43:59
some of it well you know what when the

44:00
market goes down it's all going down

44:03
i don't care how well diversified it is

44:05
when the market goes down all those

44:06
shares are going to lose value

44:08
right well okay but a hedge fund has to

44:12
return

44:12
uh to its investors and so what they do

44:16
is they buy these life insurance

44:17
policies and they pay the premium on

44:19
them

44:20
and when the policy when the insured

44:22
passes away

44:23
they get the survivors benefit so this

44:25
particular client had a million-dollar

44:27
policy

44:29
his health had deteriorated and what

44:32
happens is

44:32
you get your um medical records they

44:35
calculate

44:36
a life expectancy and they make an offer

44:37
on it this particular client they

44:39
offered him a hundred and fifty thousand

44:41
dollars for his policy

44:43
so think about that for a minute you're

44:44
going to walk away from it or you're

44:46
going to sell it to a hedge fund

44:48
and get substantial cash now yes it's

44:51
taxable as income but

44:53
if you had a gain on your stock

44:54
certificate it would be taxable as

44:56
income what'd you pay in premium what do

44:57
you get for selling the policy the

44:59
difference is taxable as income

45:00
it's a fair deal but rather than just

45:03
and walking away from a policy

45:05
i don't want my policy anymore i got

45:06
seventy five thousand in cash values

45:08
just going

45:08
wait a minute wait wait wait what if i

45:10
could get 125 for that policy

45:12
instead of just turning it in for 75

45:14
000. this is where

45:16
you just and you know what if we shop

45:19
the market for a client

45:21
the offer is always going to be more

45:24
than the surrender value of the policy

45:26
otherwise the offer is no offer because

45:28
if you're concerned for a dollar

45:29
nobody's going to offer you 80 cents for

45:31
it right

45:32
right it's just not yeah so what happens

45:35
is the worst you're going to do

45:37
by shopping the market is being the same

45:39
position you are

45:41
today right because you'll never get

45:42
worse yeah there's no downside

45:45
so a lot of times a client will come to

45:47
us and and uh you know i'll tell them

45:48
right out of the gate

45:49
you know there's either value here

45:50
there's not no why would there not be

45:52
value

45:53
if they're 60 years old they're in great

45:55
health and they got a 40-year life

45:57
expectancy sorry it's probably not a lot

45:59
of value

46:00
but if you bought that policy and it's a

46:01
preferred non-tobacco user and now

46:03
you've had a health incident or two

46:05
or you're 75 or 80. there's probably

46:08
going to be some value in that policy

46:11
and that's what a life settlement is and

46:13
that's the reason you see all these

46:14
television commercials

46:15
you know saying you can sell your life

46:16
insurance policy yeah bill and i

46:18
obviously been around the block a long

46:20
long time and we know people in the

46:21
hedge fund world and i

46:22
i had one person they told me they call

46:24
them death bonds

46:26
because in essence it functions like

46:28
like a bond

46:29
for the uh for the hedge fund um

46:32
yeah but they're getting they're getting

46:34
a coupon based on life expectancy

46:36
and when you die and i think it's a very

46:39
interesting

46:40
um market and i think that the listeners

46:43
need to understand that just don't let

46:45
the policy lap give

46:46
give bill a call um he's got he's got

46:49
the best staff in the business

46:51
literally his staff is talented so they

46:54
can go

46:55
in and and see if there's some value

46:57
there for you but um all of these ads

46:59
that you're seeing

47:00
on tv we're not going to mention the

47:02
names and they're you know sell your

47:03
life insurance policy and all that stuff

47:05
what they typically do is they package

47:07
those those

47:08
settlements and then sell it to a hedge

47:10
fund in a lot of cases or the

47:12
hedge funds are directly buying it and

47:14
they're just the middlemen

47:16
but if you're going to have a middleman

47:18
in this situation

47:19
why not someone with 40 years of

47:21
experience bill black

47:23
bill we've we covered a lot today and

47:25
we're going to have you back on

47:27
to go deeper in and give more examples

47:29
of your clients

47:31
what you're seeing out there and what

47:32
you can do remember

47:34
that not only is he a life insurance

47:36
expert you know he does he is an expert

47:38
on him

47:39
employ your benefit um strategies you

47:42
know for retirement

47:43
plans etc i mean he he knows what he's

47:45
doing once again

47:47
his um his website will be on our site

47:50
but i encourage you to go there it's

47:51
it's

47:52
of course www.whbco.comwhbco.com

48:00
his name is bill black he's a dear

48:01
friend of mine we've been uh

48:03
we've known each other for a very very

48:04
long time

48:06
and bill i really appreciate you being

48:08
with us any

48:09
any final comments before i close this

48:11
out yeah something just came to me about

48:14
life settlements

48:14
if you go to the people on tv you're

48:17
going to one person

48:19
and they're going to give you an offer

48:20
that's maybe 15

48:22
above cash value right and you're going

48:23
to think you've got to gain

48:25
what we do is we actually go to the

48:27
market and shop it among what are called

48:29
all the funders there's many people many

48:32
hedge funds out there buying it so we're

48:34
going to negotiate the highest

48:35
and best price for you a lot of times

48:38
when you just go to the one person on tv

48:40
whomever that may be

48:41
and they know you're not chopping it

48:43
you're not going to get the best value

48:45
most often so just something to keep in

48:48
mind

48:49
in fact i've been at the industry events

48:51
just like you have stan

48:52
and i've had some of these guys say oh

48:54
yeah the client will take 50 000

48:55
more than the value of the policy and

48:57
think they've got to gain and we're

48:59
you know and i thought to myself you

49:01
know that's just

49:02
not good business but you know so

49:04
there's some things like that that are

49:06
going on behind the scenes that you want

49:07
to be real careful about

49:09
and uh like anything else we bid it out

49:12
to everybody

49:13
to get the highest and best value so

49:16
sounds familiar to my clients because i

49:18
always say i shop all carriers for the

49:19
highest contractual guarantee

49:21
bill does the same thing i think uh in

49:23
conclusion

49:25
my listeners have just found their life

49:26
insurance agent his name is

49:28
his name is bill black and i encourage

49:30
you to contact him he is a straight

49:32
shooter and he's a true

49:34
true professional if there ever was one

49:36
but i appreciate everybody joining us

49:38
for this

49:39
episode and i'll see everybody next week

49:43
on fun with annuities

49:50
thanks for listening to fun with

49:52
annuities please hit the subscribe

49:54
button and make sure to go to my site

49:56
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49:59
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50:00
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50:07
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50:10
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50:13
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50:15
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50:16
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50:18
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50:21
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50:23
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50:24
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50:26
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50:27
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50:30
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