How Married Couples Can Maximize Overfunded Whole Life Insurance ($800k Boost!)

Today, we're going to be looking at a really cool strategy to take the same amount of dollars that you were planning on putting into life insurance and just stretching them a little bit farther. I'm calling it the spousal split. My name is Austin Williams. I'm a wealth coach here at BetterWealth. And today, we're going to be... This one's kind of for probably the crowd that might have been around the blocker time or two as far as life insurance goes and as far as... kind of overfunding infinite banking style life insurance goes. This is a really cool way to just do something you were already planning on doing just a little bit more efficiently. So what is the spousal split? It's a fantastic question. So a spousal split might be effective for you if you are serious about infinite banking. Two, you're married. Three, you have a spouse that is younger than yourself for that you're both in relatively good health. And five, you want to stretch your dollars as far as humanly possible. So I know that that's this, that all of those criteria right there might strike some people who are currently watching. So be it. And then feel free to go to the next video. But if that sounds like you, then keep watching because you might be really interested in what this looks like. And so I can hear you all saying like, Hey, like, what are you talking about? I still have no idea. Let me tell you. So let me give you a non spousal split scenario for right here. So this is an overfunded style policy. And this is actually a real policy. This is just the most recent example I had when something came across my desk asking for X style policy. I was like, dude, I could do that. But this could actually be way better if it was a spousal split, even though he did not originally call in asking for that. And I kind of explained to him what that was. So as you see here in this policy, as just with one person, no split, 500,000 is going into the first year. And you see right there is going to be the net after-tax outlay, 500, 100, 100, 100, 100, 100. And then the cumulative column is just adding that up. 500 becomes 600 becomes 700, 800. So 500 going in the first year, followed by 100,000 the next years. What it yields over on the right-hand side is $456,000 of net cash value by the end of the year and $7.25 million of death benefit. Now, if you look over on the left-hand side, the base policy annual premium, the cost for that as a minimum required cost is nearly $25,000. It's $24,989. So those are some important numbers. One more important number, there's actually a really cool long-term care rider that can be added to this policy. And since I clicked that because I wanted to do it, the maximum monthly benefit for this policy was $25,200. for a minimum of 27 months. So all in all, this is an overfunded style policy, high cash value, low base. This is actually a 1090. So this is an extremely lean policy. Except I knew as soon as I did this, I'm like, it could be even better. And this is how. So let me show you. So the spousal split is when you take this policy and you chop it in two and you say half of it is going to go to you and half of it is going to go to your spouse. Let me show you the gain of efficiencies here Okay, so here we go. Now it's going to be split. So we're just divided into it's really easy. I'm taking the exact same ratio, I'm just cutting it in half. So 250 in this policy is purchased, what is what is this purchase in the first year, it purchases 228 of cash value, and 3.65 million net death benefit. The base policy annual premium is 12,630. All right, what kind of long term care is it purchasing for It is purchasing $13,870 for 25 months. Okay, great. Oh, that just splits it in half. I understand. But now we're going to go to his wife, who's a 48-year-old female. So this is an especially strong strategy if you are the husband or the male who is searching for this. Because women are cheaper to insure. Why are they cheaper to insure? They have a lower statistical mortality rate than men. They engage in less risky behaviors. They live longer. So like there's there's just a reason why it's the same amount of dollars applied to a woman is cheaper than to a man. So putting $250,000 in the exact same policy, same health rating as the husband yields $230,000 of cash value and $4.4 million of net death benefit. And to do so only costs. $11,118 the base premium. Also, the long-term care that is going to be had here. is $16,720 for at least 25 months. And so now we're going to add both of those split policies together since we want to see what the full amount of coverage is. Hey guys, I just wanted to interrupt real quick. If you're watching this and have an indexed universal life policy, a whole life policy, have any type of insurance policy in general, and you're like, I want to know if I'm on the right track. I want to know if this is set up properly. We at Better Wealth want to help you. We want to give you a free policy analysis and show you, are you on the right track? Is there some things that you potentially could be doing better? And so we have a link down below that you will have access to. We would encourage you, if you have a policy and you want to see if you're on the right track, check that out. And if you're someone that's watching this and you're like, I want to talk to someone, maybe setting up a policy for myself or I have questions, we would love to serve you. You can also see a link to have a call with someone on our team. Back to the episode. So the differences. The funding amount, $500,000 to year one, $100,000 to year two, all in all, is identical. So there's no difference at all whatsoever there. But here's where the differences shine. The death benefit of the non-split is $7.25 million. Death benefit of both split policies combined are a combined $8.05 million. That's an extra $800,000 of death benefit. The cash value of the non-split policy is $4.56, and the split policies are a combined $4.58. So not a lot. Certainly, this one certainly is not like the biggest eye-opener here, but it is something to be aware of, at least in the first year. The long-term care rider of the non-split policy is $25,200 a month for 27 months, and the split policies are a combined $30,500 a month for 25 months, an extra $5,300 a month. The amount of underwriting necessary for any one policy drops from $7.25 million to $4.4 million for the bigger one of these two. So that's subtracting, there's $2.8 million less of underwriting, making it more affordable and more attainable for people. And actually, this is why I usually think to do a spousal split is that sometimes somebody comes in, they want to do a huge policy, but they don't actually qualify for it based on income or net worth or what have you. But they would qualify for the policy if they spread the risk out over them and their spouse. They could put the same amount of money in and actually make it more efficient at the same time. Now, you do. And I'm going to admit right here is that all of these numbers, they are combined numbers. So each individual person obviously does not have the same death. benefit as it did in the first example with the $500,000 one. However, to go back to the purpose of life insurance, the purpose of life insurance is to put the correct value on your life. And when you split the amount of premium over two different people, you're actually probably doing a better job at capturing the value that both of those people are bringing to the wider family and all the people that depend on those people. I even think it just does a better job of acknowledging the value that both people bring to a relationship. So as you see here, the husband and wife, you know, they got the better wealth symbol on their chest. They're stronger together than they are apart when it comes to life insurance. The upshot of all of this, rather than putting all of your assets into a single policy, extra efficiency and affordability can be gained by spreading the risk out over both spouses. So the main reason that we do this is to lower... the underwriting amount on a policy. And the reason why is because most carriers have a spousal reciprocity agreement is that even if you're the non-working spouse, if your working spouse qualifies for, let's say a million dollars of insurance and they have key, they have to have it or be applying for it, a million dollars of insurance, then the non-working spouse can also qualify for that number, even though they don't earn the same amount of money. And this is because, you know, ultimately, you know, wives, husbands, you know, they both bring value to a family. And so the carriers just kind of recognize that and they say, okay, if we're valuing the spouse's life at this much, we want to be able to value the other spouse's life at that much as well. Spouses, they can get a one-to-one amount of underwriting for the amount of enforced insurance at the higher earning spouse house. Now there are like cases where this might not be exactly the case. Obviously the spouse has to, it has to like, they have to qualify for insurance in the first place, right? But as long as they're qualifying for insurance, as long as their health rating is acceptable, they can have the same amount of underwriting on their policy as the higher earning spouse. This means you can qualify for a higher amount of insurance than you would otherwise qualify for just as the non-working spouse, since the risk is being spread over two people instead of one. So that's the spousal split. If you are interested in looking at seeing what that might look like for you and for your spouse, please come talk to me. Ask another one of the coaches on the team. We would love to help look at what that would look like for you guys. Once again, this should allow you to do something that you are already planning on doing, which is overfunding a policy. except it could make it even more efficient and even more desirable because it's just spreading your dollars even further. Thanks so much for listening. I had a lot of fun putting this together. See you guys later. Bye-bye.