In today's video, we're going to be answering the question, does it make sense to have more policies versus just one policy? Does it make sense to fund a policy for five to seven years overfunded or max funding and then drop it down to the base and then start another policy versus have one policy and give yourself the ability to fund long term with different writers? I know this is going to be a very great video. We're going to look at six policies. We're going to look at Google Sheets. When I first got into the space, I learned from amazing people that the best way to overfund a policy was for the first. five years or seven years, you max fund with PUAs and base, and then you drop the PUA and you just pay the base. And you look at the policy and you see how efficient it is. And then the idea is if you fund another policy, and then you do that and you do that. And so you start building a system of policies. And when you look at that in a vacuum, it can look incredible. But then you have to ask the question, is this the most efficient way? There's been a lot of people have come to us that have had policies like that. We've gotten a lot of questions. And this is the first video that we're doing to really break that down. And not only are you going to be answering that question, but you're going to be comparing would someone be better off if they just kept one policy with certain riders versus if they did multiple policies with those same assumptions. And so the one, the man, the myth, the legend himself, Justin, the freak in the sheets when it comes to Google Sheets, we appreciate you being on here and excited to dive in. I think because what you told me is there's been a lot of people that have come to us that have been told this or have policies. that have their PUA dropping off. And I want to be in full disclosure, my very first policy that I've ever set up for somebody was set up that way because that was how I was trained. And so I have a soft part of my heart, but the moment I learned that that may not be the better way, we pivoted and it doesn't seem like everyone has made that pivot. Yeah. Yeah. I think it's something that it's definitely can work in certain situations and for the right people. Absolutely. It's the way to go. We can really get the most efficiency, but. What I'm going to be looking at today was someone came to me, they're young, nearly 30 years old. They want to fund for a very long time. They're already doing well and want to continue to be able to fund. And so they went, they talked to another agent, just doing their due diligence. All right, here's what Justin and Better Wealth say. They want to go to somewhere else. And they had this option where they can fund for a short time. The other agent said it's more efficient. And so we can look at how maybe it is in certain ways, but over the long term may not be. So excited to dive in. We have six policies we'll look at. We're not going to spend a lot of time on them. So don't think this is going to be a long video. The people love the numbers. We're giving the people what they want. We're doing more case studies, more videos like this. And please, if you're watching this and you're like, hey, this is a question I have, or please make a video on that. We read all the comments and we're very much going to take our content to the next level, but it's only possible through you. And I also just want to say, if you're watching this and you want us to review your policy, we have a link down. for you below for policy reviews. And if you want us to just have a conversation to see if something, a strategy like this would make sense, we also have a link down below. So with that, Justin, handing it over to you. Yeah. So this, in this example here, again, this is not the person who came to talk to me, change the name, change some of the numbers, but I will go with Johnny Smith, male, age 29. So young, ideally wants to fund this for as long as what he can, wants to start putting in $50,000 a year. This is one example of what he was told is more efficient to do. So we put the smallest amount of term rider on there. And so at Lafayette Life, that's the level term rider. It will drop off. So it's only on here for seven years, which is great. There's no really much extra cost for doing that. The disadvantage that we're going to see as we come down here and we get to year eight and after year eight, we can no longer fund up to that amount. So that's really what we're going to be looking at is yes, we know 50,000, we get a lot of cash value, 45,000, typical max cash value design. For that instance, it's done great. You can do that. We have cash value. You look at our breakeven point, going to be in year four. So very well done for that. No issues with the policy there. The problem is we can only fund for eight years. We can still fund in. year eight get almost to fifty thousand and then after that you can only go up to just over six thousand dollars and what they were told and which is true we pay in six thousand six hundred forty three dollars and this column right here shows our increase in cash value so the deal is you fund six thousand dollars into the policy but look how much your policy grows which is true you fund six thousand it grows by 28 and so you don't need the pua on there you open up a new policy and start over so that now you have two policies going for you. Now you have another one over here. funding at somewhere around 44,000. If you wanted to keep it the same, you could obviously do more, but it is much more efficient here. You put in 50,000, it grows by about 67. Next year you put in 6,000, it grows by 28. So it's a much bigger percentage wise of the growth there. But to me, that can be a little bit misleading. I don't know about you, Caleb, but where is that growth coming from that 6,000 or where is that growth all coming from? Yeah, it's, it's coming from the overall efficiency of the policy. And even if you didn't fund anything over time, you would see the policy would grow. And that is because of the cash value, the dividends and all. Yeah. Yeah. It's been, you put in at that point, $400,000. Most of that growth, the dividends, everything are coming from the $400,000 that you have put in. So you don't see the growth till later on. That's why we always say it's something that's going to get better and better with time, which is true because it's building, it's compounding, it's uninterrupted. So. That's the strategy that they have. I'll make a comment on that. They're putting $50,000 in, have a death benefit just under a million upfront, and it seems to grow. Early cash value breaks even in year four. Term rider drops off and you're only able to put $6,643. No one's arguing that obviously you'd want to fund that and it's a quote unquote efficient, but the scenario is, and this is the pitch, is like, hey, after this, start a new policy. And then, you know, you're funding the six or seven thousand in that policy. And then with the other dollars, you're starting a new policy, which, again, it's not bad to start new policies. But if the goal is to fund ongoing, why do we think starting a policy in year eight or nine when you're older may or may not be insurable? And it's like, are you really thinking that that is when you when you're actually comparing apples to apples of two? Like, you really think that's going to outperform the. giving yourself the ability to fund longer in one policy that's already seven, eight years in the making. So like that, that logic, I can already tell that if they continue, if they were had the ability to continue to fund in this policy, long period of time is going to give them a better result. I would imagine in death benefit and in cash value. Yeah, absolutely. It's, and you hit on some of the risks there of even if everything goes perfectly, you start a new policy, but you hit on the risks of one, you may not be. insurable at that point. That's always a risk. We hope that's not the case. Two, you're going to be older and your new minimum premium is going to have to be a little bit higher. All of those things play into it. And then you have a new policy with a new minimum. And so your overall minimum that you continue to have to pay is going to be higher. And so made another policy identical. Now this person is 38. They're years older. It's the same timeframe that they would start. So it adds up to about the same amount of premium. So we can. compare apples to apples there. And as well as now one showing you, this just has a 20 year term rider. You could do longer. You could do 30 and just put a 20 year on to make it a little bit more comparable and to make it where we don't have to really look at all of the numbers on there, compare them here. So this is a combination adding up the two numbers here. And so you see here, we're doing almost the same total amount of premium, $700,000 a premium over 15 years, 700 or almost 700 over 15 years. And you see just purely from a mathematical standpoint, if you ran the numbers exactly as it is, we get out here to this age 44 and we have one point, a little over $1 million, $1,024,000 over here. We're $10,000 short of if we had just kept the same policy. So again, that's not a huge... difference, definitely not a lot there as well as about a hundred thousand dollars of death benefit difference. But we also have to factor in one, this policy on the left here is going to continue to get even better because at this point they would have to now start another policy. So if they did that same strategy fund for seven years, new policy fund for seven years, new policy, and be able to go from there. I, if you want to do this, I absolutely say, come to me. because I would love to every seven years you now need to get a new policy so you can come to me and I'd love to sell you another policy. Yeah, it's great because it's like, yeah, like set up. I mean, I've seen as low as like four years. Let's fund this thing over four years, drop it down to base and then start another policy. And again, if you're just looking at it in a vacuum. you could justify anything. You're like, oh, this is amazing. But when you compare that to the marketplace, you're like, oh, maybe why would there be this incentive? You just got to ask questions. So the point, I just want to summarize what you're saying. So you have the same company, $50,000 for 20 years, but we're stopping at 15. Just keep it apples to apples. Correct. Yeah. Okay. Apples to apples, 15 years, 15 year mark. It's a $10,000 difference on the cash value side and about $100,000 difference on the... Death benefit side, what is the minimum? premium on the left like the if you just have one policy what's the minimum on that yeah so if you just have this one your minimum is going to be about five thousand dollars at that point there would be a little term left as it was for 20 years so you're going to be looking around up and say five thousand five hundred that's super conservative okay so then the minimum on the first policy is higher than that yeah the minimum is going to be second policy is also higher yeah because they're looking at you have $5,000 minimum on. The first policy here that you did, you were able to pay a little more here. And then on this one, the minimum at that point would be about $4,300. So now you need to pay about $9,000 versus that just over $5,000. So you're having to pay extra just to hit the minimum. If you just kept one policy with the ability to continue to fund, you're creating more flexibility. So the person that's saying, well, there's less. No, you're wrong. Like there's more flexibility in that policy. They give you options to continue to fund when dollars are getting more efficient. and then props to you for making it as apples to apples, but really over the next 30 years, the difference is going to be that much bigger, but we wanted to keep apples to apples and show. So it'd be curious if we could zoom out 30 years on an example and really see, because that would be maybe part two, we do that or over 40 years, and that might sound crazy, but I think that's when you're going to really see a difference. And what we want is if we can get you a plan that's more flexible, gives you more options, gives you more death benefit, has better growth. why wouldn't you do that deal? You know? Hey guys, I just wanted to interrupt real quick. If you're watching this and have an index 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. Certain people, it makes sense. If you're 60 and you know you only want to fund for seven years, absolutely. Let's make it that way. But for the person that says, I know a lot of times I see that term writer, all it does is create a drag on the policy. You want everything. going to the paid up additions that you can have, which is true. We want that to happen, but a whole new policy with a new base of $4,000 plus a new term rider on that creates much more drag than if you just, I like to say, let's build it right the first time so that you don't need to get another policy. Obviously you can come back, always get another policy if you want. A lot of people look at, they see people talking on YouTube and kind of look at collecting policies. Oh, I have 10 policies. I have 15 policies, which It's great if you outgrow this policy because you're doing so well and you need a new place to put money. Yeah, come back, start a new policy. And that's the way to go about it, but not continue funding at the same amount, just adding policies to add policies because it hurts you in the long run. I agree on all fronts. And if you're watching this and you disagree with us, we'd love to have you on and hear a different perspective because I'm trying to understand the different perspective around why someone would set this up. I'm not opposed at all by having multiple. multiple policies. That's just like, it's a, if you have new dollars that want to put towards life insurance, great. But to set it up with the idea, I'm trying to think of a world where I wouldn't do the, give myself the ability to fund 50,000, like let's play devil's advocate. Do you have less cash value in the first year or two in the policy where you're funding over 20 plus years? You do. But to me, it's a minimum. What's the difference? I think it's, I think it's important No. So the first, yeah. it's about a hundred dollars it's just okay that term rider there now if you're older that difference is going to be bigger because that term rider is going to cost more but still maybe a thousand bucks at most is what you're going to be looking at yep so you're you're saying you're saying okay there's a world where if you're in your late 50s 60s maybe 70s and the goal is like hey i got money i want to fund it over six seven years it's kind of going to be the last dance meaning like i'm not going to fund more life insurance there's an argument to be made to be like okay Maybe term insurance could be pretty expensive. And so we could make the argument to not have a term writer fund over a certain period of time. Like that is an argument that could be made. But if the idea is to be like, no, I see the value of life insurance and I want to fund over time. Why wouldn't you do that? And the term writer ultimately gives yourself the ability to have a smaller base, which also gives yourself more flexibility. And so I would love also to run a scenario just like in your 60s to see like. here's doing this with the term rider here's not and seeing the difference and i think it may be it would be an interesting to look at so i'll stop i'll stop talking and let you get to the next scenario yeah i think there's definitely a right situation i think that could be part two let's look long term and also look at Would this be right for, but I also wanted to look at that was at Lafayette life. Maybe that only works at Lafayette life. It makes sense to do it at another company. We'll see here. It's going to be about the same. So at pin mutual, this, this person wanted to do about $72,000. Same strategy fund for seven years. We drop that term rider is now gone. Our minimum be about 7,400. So same concept, same idea here. See the $60,000 cash value again for the first seven years. This is a great policy. That's. I want to hit on that and say this is high cash value. That's what you want. That's how we would design it. Just the difference in the long-term funding is really what we're looking at there. So do that for the first seven years, then start a new policy. Now it's $65,000. And here, our minimums are actually going to be quite a bit higher. So we're going to have $7,000 plus the original $7,000 together. You're going to have a minimum of about $14,000 that you're going to have to continue to pay. into the policy. And so I know we always talk about options and we do like options. And if you just had one policy, would you have the ability to go ahead and stop funding that, drop it down to the minimum and get another policy? Yes. But this is creating the need to have to do that if you want to continue funding. And so that's really where I don't like that necessarily. And so then again, just to show here, we will have a slight difference in cash value early on with this so This one at Penn Mutual, it's slightly, I'll not say more complicated, but we use a different term writer and we also drop off the actual or a different, sorry, PUA writer and we drop off the term writer there. So I'd say if you are confused on how the companies work, watch the video that dives into the term writers, but we'll come over here. I guess first, do you have any questions on Penn Mutual? No, no, no. We're doing the exact same thing you're doing. You're comparing person one has policy one after seven years. Judd. starts policy number two, and then versus the person that just continues to be able to fund over time. And the cash value early on is like a little bit different, but very minuscule. And then let's see what the outcome is over time. Yeah, so here, we end up and it's going to be even a little bit more different. So we come down here, same concept up here, policy on the left, we're funding one policy policy over here we're funding two You see, we put about 116 more dollars in because it didn't work out exactly apples to apples. But overall the difference here, we have about $20,000 difference of cash value. So 1.4 million, 1.38, and our death benefit actually is quite a bit different as well. So, and that has to do with one at Penn Mutual, it works different. That's a blended term writer. So it's actually helping your cash value over time, as well as continuing to build up that death benefit even a little bit more and so Here, it's even worse. You can make the argument, it's not that big of a difference at Lafayette Life. Here, it's even worse, and it's going to continue to grow that gap over time as they now would need to get another policy if they wanted to continue funding at the same amount. Again, you could stop funding, but you could also stop funding in this one, and you're already ahead in that situation there. Yeah, and I would imagine Penn is the same way that the minimums are on the on the if you just did one policy is a way smaller than if you did two. Correct. Yeah. So both of these, your actual base amount is going to be about 10% of what you want to put in. So about 7,000 over here, where here we combine it and it's going to be about 14,000. So that's double your minimum there that you would have to keep paying if you wanted to keep that. The fact that the death benefit is like a $600,000 difference, the cash value is only 20-ish. Again, this is only over 15 years. It's going to continue to grow differently there. Yeah, no. And I just want to point out the first year cash value difference is less than 100 bucks. Yeah, yeah. Less than 100 bucks. Yeah. The death benefit difference, though, is on you just had one policy. You actually have a higher death benefit. It's very interesting. And I really appreciate you breaking this down. I do think that there are so many people that have questions and we want to if you're you have a policy and you want us to review your policy or you want to have a conversation or maybe you're talking to someone, you're like, I want to get a second. pair of eyes on what I'm doing. We got links down below for you and we would love to help you. Justin, do you have any final words in this? Did you know that this was going to be the conclusion because of what you do day in and day out? Why were you inspired to make a video like this? I was working with someone and they wanted to see a comparison because they had gone to another agent. I had showed them it really was this policy right here, which is why it's not perfect numbers of 50,000. It was the 72,300. they wanted to compare it so i made this for them to show and thought we could easily make a video around that because it does make a difference and again it really comes down to what the goals are if this person knew they only wanted to fund for 10 years And yeah, this makes more sense. Let's go with this one and we can get a little bit higher cash value and we drop it off. And yeah, that would make sense. But over here, you can essentially do the same thing. We just design it a little different and give you one, the option to continue. Not that you have to, but it's the option that could be misleading here saying, yeah, let's fund for 50 years, but it's really not that you have to. It's the option that you can do that. And we, we like options here. So I would say let's build it with the most options, lots of flexibility, and the best way for your goals the first time so that you don't need to come back to me. But you can come back to me whenever you're now more successful and want to put double this in, but there's no room in the policy. Let's do it that way rather than just building up a lot of policies so you can say you have multiple, which can be a good thing, but only, I think, for the right people. I also want to know in the comments, would you buy a t-shirt if we had more options t-shirt? on better wealth on the back. So more options. I like that. Optionality is a key thing. And Justin, I appreciate you as always. Wouldn't be a Justin video if it wasn't for the Google Sheets. So that's right. We appreciate the coach that's a freak in the sheets, making things happen. And Justin, as always, appreciate you and look forward to more videos. All right. Thanks, Caleb.
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