Archive for the ‘Net Zero Cost’ Category

One Tax Free Wealth Strategy Every Should Own

Background: Every family wants to help the next generation. Some will even go so far as to help financially and some cannot or will not. The bottom line, it does not matter as you can create tax-free wealth and transfer it to you and your siblings either way.

Let’s look at what a normal family with mom, who is 73, and 3 siblings are contemplating:

Mary Smith Age 73

Tax-Free Wealth Creation & Transfer Legacy Plan

Background Facts: up to 80% of the wealthiest families transfer assets tax-free from one generation to the next via properly owned and structured life insurance policies.

Taxable Versus Tax-Free: If the policy is owned outside of Mary’s estate and premiums are paid  by the Smith children who are also the beneficiaries the proceeds from the policy at completion are tax-free.

For example: In the 40% tax bracket you would need the following taxable returns every single year to equal the life insurance tax-free return:

Life Insurance Tax Free Return________________Taxable Equivalent Return Needed

5.00%_________________________________________ 8.33%




Life insurance tax benefits and returns act as a alternative to the stock market volatility we have witnessed in the last 15 years. That includes the 2001-2003 Internet crash and the 2008 worldwide crash.

Possible Gifts From Mary Smith: If Mary decides to help offset premium costs she could gift up to $14,000 per year per person, (spouses could be included) tax free using the annual gift exclusion. The siblings would then turn around and pay premiums.

Health Rating and Premiums: Health rating determine premium pricing and are not guaranteed until the policy is issued and paid for. You buy life insurance with your good health. When your health changes you may not be able to buy a policy at any price.

I have run pricing based on a standard health rating for discussion purposes:

_____Benefit                    Premium               IRR at age 87       _ Pre-Tax Equivalent*

  1. $500,000                    $18,157                       7.28%                          12.13%
  2. $750,000                    $27,235                       7.28%                          12.13%
  3. $1 million                    $36,314                       7.28%                          12.13%
  4. $1.5 million                 $54,471                       7.28%                          12.13%


  1. Pick a number you/siblings feel is comfortable and not a burden and buy it.

* pre-tax equivalent return you would need to receive in a taxable account for 15 years in a row to equal the tax-free internal rate of return (IRR) with life insurance at completion age 87. Completion could be earlier or later. For discussion purposes only.

Case Study #8: Non-Reportable Tax FREE Money

Help me please…Consider 2 methods of Creating $5 Million Tax-Free…

…Which 1 method Would You choose?

Proposition: Do you have grandparents, parents, children or children planned for the future?
Question: Would you like to create and transfer $1 million to $25 million tax-free at your parents or grandparents generation to yourself or your children?

Explanation: This is a real case I am working on for a couple of healthy 50 year old couple who would never buy life insurance unless the premiums and potential where this motivating.

This is so simple….this is a strategy they brought to my office to get a second opinion:

  1. Pay a $21,575 premium per year into a life insurance policy* with a $5 million tax free death benefit.   .
  2. The Internal Rate of Return (IRR-that means the number is compounded back to year 1) at life expectancy at age 90 is 7.03% tax free or if it was a taxable investment they would need an equivalent of 11.71% to net 7.03%.

That is a very good return! Who has compounded taxable money for 40 years at 11.71%? Not many people we know.

But wait….Here is what I proposed for the same $5 million*:

  1. Pay a $44,750 premium for year 1 & 2.
  2. Pay NO premiums years 3-10.
  3. Pay $385 premium year 11
  4. Pay $1,620 premium year 12
  5. Pay $1,757 premium year 13
  6. Pay $1,946 premium year 14
  7. Continue to pay minimum premiums years 15 through the life of the policy

The Internal Rate of Return at life expectancy at age 90 is 9.64% tax free or 37% higher than the 7.03%.

If it was a taxable investment they would need an equivalent of 16.06% to net the 9.64%.

Minimum out-of-pocket cash and 37% higher tax free returns with moderate risk.

Which way would you fund the premiums…option 1 or option 2?
*This is an index life policy with a 6.5% annual crediting rate based on the performance of the S&P 500. The policy has a 12% annual cap cap on the crediting rate and a 0% annual floor. Be sure to consult with a financial advisor and see all illustrations for details.

Do you own the “OLD” or the “NEW” Type of life insurance policies?

What’s The BIG


Trade your “OLD’ policy in for a “NEW” policy

that gives you access to the death benefit TAX FREE

during your lifetime*!

You understand that severe illnesses can happen at any time, to anyone. Fortunately, families can help protect themselves financially in their time of need.

Did you know you can buy or even convert or transfer your current term or permanent life insurance policy for a policy with living benefits tax-free during your lifetime, if you qualify?

It offers early access to the policy’s death benefit tax free to help pay for expenses brought on by a qualifying critical, chronic or terminal illness.

I recently read that up to 70% of people over age 65 will suffer

a chronic illness during their lifetime.

It’s time to THINK about protecting your money so your family

doesn’t have to pay taxes and drain your retirement funds

in the event you become chronically ill.

Start now by letting us show you how to buy a new policy or even convert

or exchange your current term or permanent life insurance policy

for a policy with tax-free living benefits.

Need help? Just call for a quick conversion analysis.

Tax-Free Strategy Alert #1 of 7

This is a strategy that could work for almost anyone…if you qualify.
Watch this short video and ask yourself, “How come no-one ever told me about this?”
Look closely at the “internal rates of return” (IRR), in short that means compounded every year back to year 1.

Do you know anyone else making these types of returns? (Go back and read the first 21 pages from my latest book.


Click this link to watch my short video clip and then contact me for numbers that could help you and your family.

What return numbers would you need to see to get excited?