We are the first licensed and regulated life insurance carrier that operates in Bitcoin. If you took the most basic limited pay whole life insurance policy that you could conceive of and change the word dollars to Bitcoin, that's what we have. The people buying this product want a tax advantaged vehicle to hold their Bitcoin in the long term because they believe the price of Bitcoin will be significantly higher in the future than it is today. You guys have a limit of how many Bitcoin you'll insure someone? We actually have a hard cap. Everything we do is online. We don't require anyone to go see a doc. We don't do any blood work or urine. Bitcoin policy with no blood, urine? Correct. Is there a lot of declines? Yeah. Let's talk about the actual contract because that's what life insurance is. It's a contract. Life insurance policies that we usually set up have 60 to 90% first year liquidity. Our goal is to break even within four to six years. And the death benefit is far greater than the ratio I'm seeing here. The pressure I would have is that in the last five years, the purchasing power of the dollar has dropped 20%. Okay. And the purchasing power of Bitcoin has gone up 800%. In this calculation, it takes 26 years to have more than a Bitcoin available to loan against. The policy value breaks even at year 19. Man, these terms are rocky. There's a reason that Bitcoin is the acronym HODL. Hold on for dear life. None of them want to ever sell. And this is the most tax efficient way for people to HODL their Bitcoin. Danny Bear, welcome to the Better Wealth Show. It's good to be here. It's fun. This has been a highly requested episode. but I actually have a bunch of people in our... in our community have sent me emails and questions. So we might get to some of those, but you represent meanwhile, life insurance company, the first Bitcoin back life and whole life carrier. Yep. First Bitcoin denominated life insurance carrier. And we got questions, man. You're actually here in Nashville, Tennessee. You're going to be speaking at our event, uh, Tuesday. And I told you you're walking into the lion's den because I want to be super open-minded and I'm excited, but you also have some of the most traditional whole life, you know, people that work with companies that have been around for a hundred plus years and they're very skeptical of anything and I and I can only imagine new company raising money in Bermuda like all these things are going to have questions but we've been chatting even pre pre being filmed and you you're like you had all the answers so I'm excited so before we before we jump in why don't you just give a little context of like who you are how in the world did you start like you're number four at this company. And so like, I would love to get a little bit of context before we dive in. Yeah, like I said, great, great to be here. Thank you for having me. I'm thrilled to escape Minnesota for a couple of days to be down here in Nashville. But yeah, so like you said, right at the jump, we are the first licensed and regulated life insurance carrier that operates in Bitcoin. That just means we simply are a normal life insurance carrier that's fully licensed, regulated And we use a different currency, but we do everything else the same. Solvency ratios, reserve requirements, everything is done like a traditional life insurance carrier. How did I end up here? I have some gray hairs on my head as a result of working for a few years in crypto and Bitcoin specifically, but my background is traditional finance. I was a wealth advisor for family offices and ultra high net worth individuals in New York out of college. And then about three years ago in early 2022, I got recruited over to Digital Currency Group to build out a wealth management arm underneath the venture fund, who at the time was the largest venture fund in the crypto space. That was, I thought, a good idea until it wasn't because in 2022, a bunch of crypto companies blew up and it was a rocky time in the industry. And so we actually wound that business down in. January 2023. And then I joined Meanwhile. So I've been with Meanwhile for about two and a half years now. At this point, like you said, I'm the fourth most tenured employee there. I help run basically everything that touches revenue. So sales, partnerships, distribution, things like that. And we provide normal life insurance products that use Bitcoin as their currency. So you get the tax advantages of the product or chassis with the relative strength or the price appreciation potential. Bitcoin as the currency. So happy to dive in and answer any questions you have. We'll get to the details, but big picture, if we take a step back, life insurance is a contract between you, an insurance company, it's a unilateral contract, meaning if you keep up your end of the bargain, the insurance company will keep up theirs. That promise is only as strong as the insurance company, which will be a question that we ask in a second. But overall, these contracts, a person's funding in Bitcoin over 10 years, and some people can fund it all in year one. So that is something that can happen. There's a death benefit that's attached to it. And it's usually a two to one ratio from like the full premium over 10 years. Yeah. So that will depend on the age. The age, the sex, the smoker status, the health underwriting of the insured individual. But the general ballpark I like to give people is that a healthy 30-year-old gets a two-to-one death benefit to premium ratio. A 45-year-old might get something like one and a half to one. So it'll depend on their underrating. But it is a very normal, limited pay, whole life contract that just uses Bitcoin as its currency. So we'll just make numbers really simple. We'll round up to, let's say someone pays one Bitcoin for 10 years. So they're putting in 10 Bitcoins and let's say they're a healthy 30 year old. And so that person would have a death benefit of 20. Correct. 20 from day one. And you fund that over time. We'll talk about being able to borrow again. It's not cash value, it's Bitcoin value. The cash is the C word we can't use. And so you have the tax benefits of your Bitcoin value growing, you can borrow against it, which we'll talk about. And then when this person dies, meanwhile, we'll send them a death benefit. Send their beneficiaries the claim, income tax free. Income tax free. And then obviously, you still have to do proper trust. planning for estate plan tax purposes. Okay. Anything that I missed big picture is if we zoom out. That is spot on. Okay. I would say for the insurance savvy people that are listening, this is a non-participating limited pay whole life policy that is internal revenue code 7702 compliant. It is literally just whole life insurance. Great. If you took the most basic whole life insurance, limited pay whole life insurance policy that you could conceive of. and change the word dollars to Bitcoin, that's what we have. Yeah. And I will say the innovation here is because of Bitcoin story, because if these numbers were in real dollars, you wouldn't be sitting here. I'd be like, I don't know if there's any, we'll talk about the illustration in a second. But okay. So now if we zoom back, we have the contract that we can talk about and the company. Let's first talk about the company and a couple questions that I have. Meanwhile is in Bermuda? The carrier is in Bermuda. Okay. So that's the question mark. It's a stock company, meaning it's not mutual and it's a new company backed by what some people think is very volatile. Is that fair to say? Like in the crypto space, it's a volatile space. Well, so where I would push back on the volatility piece here and- Please do. Yeah, yeah. Yeah. So we'll dive into Bermuda. Maybe I'll tackle Bermuda first. So Bermuda is a global insurance and reinsurance hub. Main Street, Hamilton, Bermuda has Chubb International's office, AIG's office, our office, Swiss Reinsurance, Munich Reinsurance, Athene from Apollo is in Bermuda. So Bermuda, it gets maybe confused with the Bahamas because they're both islands that start with B. But from a global insurance reputation perspective, Bermuda is like top tier insurance regulator. The Bermuda Monetary Authority is the regulator there. So that's Bermuda. The point of the volatility, the reason that I push back is by denominating our entire company in Bitcoin, there actually is no volatility. I understand. You're not hedging dollars to Bitcoin. The price of Bitcoin when we started this company or when the two co-founders started this company was $16,000. It's now $108,000. It could be a million dollars. none of that actually matters because We do all of our solvency and reserves. Our entire balance sheet is denominated in Bitcoin. Actually, about a month ago, we became the first company, to our knowledge, in the world. We actually stated our 2024 externally audited financials fully in Bitcoin. There's not a single dollar on the balance sheet. You guys get paid payroll on Bitcoin? No, so the carrier is in Bermuda. That's all Bitcoin. There's a holding company. That's a Delaware Inc. Our investors invest in dollars. Okay, I'm just curious. I'm like, man, that's hardcore to be an employee of Meanwhile. My whole career is like a levered bet on Bitcoin kind of. And I have like a dollar mortgage and things like that. But we've talked about ways maybe like year-end bonuses will be Bitcoin. But the W-2 income will be dollars. but so yes just the reason that i'd push back on the word volatility is that When all you do is work in Bitcoin, there is no volatility. Because one Bitcoin just equals one Bitcoin. It's the same way that Northwestern Mutual doesn't care about the dollar to euro exchange rate if all of their guarantees, assets, and liabilities are in dollars. We don't care about the Bitcoin to dollar exchange rate. And we call it the exchange rate because we think about Bitcoin as a currency. We don't care about that exchange rate because all of our assets, liabilities, and guarantees are in Bitcoin. Okay. What would you say, though, to the volatility of a new company? And it's very fair. Bermuda, even though it's not like, I can't even point where it is on the map. I like from a standpoint, there could be some unease there. But like any if someone started a life insurance company in U.S. dollars and they just like started and they raised money. That's cool that they're raising money and there's probably innovation there. But like a big pushback in our community would be like, OK. They're trying to make a profit. And what happens if things go south? Like, talk to me about like, what if worst case scenario, like a bunch of people die, you guys, I believe, are holding the risk on your balance sheet. That sounds great until it's not. What are some of the, like, talk to me about some of those things about you guys just being a new company. Yeah, great question. And the one thing that you can do, you can raise as much money in the world as you want. The one thing you can't do is speed up your track record. So we are... Three and a half years old. We've raised a little over $60 million across two tranches of seed capital and a Series A from what we think of as the best investors kind of across insurance, AI, and Bitcoin, or the broader digital asset ecosystem. But the question that you're asking is actually the main reason we chose Bermuda as a regulator. And don't get me wrong, we tried 13 different states. Oh, yeah. In the U.S.? And shockingly, back in 2022, none of them bit at the idea of regulating a Bitcoin life insurance company? It would be kind of a disaster because wouldn't it have to be, if you get one state, wouldn't every state then have to get in line? Insurance is regulated state by state. State by state. So it's like we tried multiple, our chief insurance officer spent 21 years at New York Life. He ran their entire individual life business. We tried. Okay. And when it became a... very clear that no state was going to bite, even the most progressive states. Bermuda was the top choice. And the reason Bermuda is the top choice is they have deep historical expertise in the insurance and reinsurance space. I already touched on a lot of the names that they already regulate, like Chubb and AIG. But they also actually have been building out their regulatory framework for digital asset companies. So Coinbase International is in Bermuda. Jack Dorsey's The Block is in Bermuda. And so for us, it was a perfect combination of deep historical insurance expertise with a willingness to be innovative and work with digital asset companies. But to the core question of what are the protections or what are the guarantees we'll be around over the long term, Bermuda has actually never had a life insurance company default. And it's not because every life insurance company in Bermuda has always been perfect. It's because there is a strict regulatory capital reserve requirement. placed on all life insurance carriers in Bermuda. And if a life insurance company in Bermuda ever loses any money for any reason, so this could be premature claims, this could be operational losses, it could be credit losses or investment losses. If we lose money for any reason, you lose your reserve capital, all of it, before you ever lose any customer deposited premium capital. Okay, so there's a lot of skin in the game that you guys have. Well, it's just a buffer. And so if we get to a point where we are losing money and we fall below a threshold of reserve capital requirement, the regulator in Bermuda just shuts the business down and repays the customers their premiums back. So the risk is obviously all of our policyholders are taking counterparty risk with us, but the risk is backstopped by the regulator. So their true counterparty risk in some way is the Bermuda Monetary Authority. Okay. Is there any other questions that people bring up in talking to you or your team about skepticism as it relates to the company? We're not going to talk about the contract quite yet. How much time do you have? I mean, hey. So we're the first people doing this in the world. Lots of arrows in the back. Yes, everything that we do is going, and it should be, due to skepticism and questions. and really my job. is to make sure that people's questions all get answered. And so there are questions around capital requirements. What's nice is that our externally audited financials from 2024 are public online. People can literally look at our balance sheet and go through it and see that we are overly reserved for the risk that we have based on the business that we've written so far. And so we've done everything that we can to build out this. This company and this first product that we'll talk about to be as conservative as legally possible to still qualify as life insurance. Yeah, I think, and I just want to back this up, is when I first heard about this company and did the reaction video, part of me, and I think even you mentioned in the video some numbers, some round numbers, and I was thinking, man, they're potentially taking on risk. I wonder what their underwriting looks like, which I want to ask you in a second. But then when I actually look at the illustration, it's very plain vanilla. It's like, okay, I don't think this company has any problem like And the skepticism or the critical mind would be like the policy itself is not that attractive. But like we can't we can't kill all birds this one time. Like let's get let's get approved. Let's get established. Let's start building a track record and then let's start making more competitive products. I would imagine that's the mindset. Yeah, I think that's the mindset. But I think that what you well, before we started filming this, I told you I'm not a Bitcoin salesman. So the people buying this product want a tax-advantaged vehicle to hold their Bitcoin in the long term because they believe the price of Bitcoin will be significantly higher in the future than it is today. So on paper, the numbers don't look attractive if you held it up to a traditional life insurance policy. But if you believe that Bitcoin will appreciate 3% year over year going forward, and keep in mind over the last 15 years, it's like a 65% kegger. If you believe that Bitcoin will appreciate 3% or more going forward, this will be the most performant whole life insurance policy in the world. That's fair. That's fair. Because instead of your dollars getting less valuable every year, you have it in Bitcoin, which the value is growing. Plus, the policy is also giving you a little bit of interest as well. Well, so, yeah. So, the remove, and we can talk a lot about the debasement of the dollar or the depreciation of the purchase power of the dollar. But remove that even, and if an average 10 pay a whole life, I think right now is like guarantees a four and a half percent interest return year over year compounding tax-free in dollars, if you went to Northwestern Mutual or New York Life, we are guaranteeing a 2% Bitcoin return. So it's like 10 Bitcoins becomes 10.2 Bitcoins becomes 10.4 Bitcoins. And then if you believe that the price of Bitcoin itself appreciates 3% per year, You're getting 2% Bitcoin growth times a 3% Bitcoin appreciation, which if that compounds over time is actually an exponential curve, not linear. And so you're growing much faster than 4.5% per year, year over year. And the opportunity cost, if someone's already holding Bitcoin and they want life insurance, they would have to sell that Bitcoin, which would incur capital gains tax, either short-term, long-term, and then they put it into dollars that are getting less valuable. And so if you're already sitting on Bitcoin and you see the value of life insurance, You're saying this could be the perfect storm. Now, do you guys have a limit of how many Bitcoin you'll insure someone? Yeah, so part of the reason that we have this limit is because we... You're the only... Our risk is on the balance sheet, or it's all on our balance sheet. So we actually have a hard cap at 50 Bitcoins of death benefit for one individual life. And then it's even just 75 Bitcoins for a married couple. Okay. The likelihood that a married couple is in the same car accident. Yeah, that's still a lot of... Money. It's not that, I mean, if you, at today's price, 50 bitcoins, $5 million, which is, I'm not saying that's not a lot of money, but in life insurance terms, it's not. Right now, but you guys are holding the, you guys are holding the risk. And I think knowing that, that's still, that still can be a lot if you guys are holding all, I mean, that's a bad day. Some of your top people die prematurely. So our, our chief insurance officer, Jim loves to say that life insurance is a, um is a game about projections and forecasting. Annuities is a game about spreads. And so the whole point about life insurance is you have to have a large enough pool of capital. So it's like really cheerful to work in this line of work because we talk a lot of time about, or we spend a lot of time talking about like mortality pools and people dying and things like that. But the whole point is as our balance sheet grows, our cap will also grow. so When we first started out, I think it was a 40 or 45 Bitcoin maximum. It's now 50 Bitcoins maximum. And as we get bigger and bigger, the maximum will grow. But to your point, it's a bad day if one of our larger policyholders passes away. Bad day for a lot of reasons. But a lot of our reserve requirements under our regulator are actually tied to our individual largest liability on a single life. And raising money, a lot of that just going straight up to... reserves or is it going to innovate like all of that? Cause you guys underwrite virtually as well. I would love to know your underwriting process, how people get approved for that. Yeah. So a couple of questions there. The first is capital raised. Most of it goes to reserving. So the thing about life insurance or just running a life insurance company is every time we bring a product to market, we have to hold reserves for that product. So we have the whole life right now in the next couple of months, we'll launch an annuity product. We'll have a single premium whole life product. So each new product that rolls out has to have its own reserves. So that's capital intensive. And then in terms of underrating, everything we do is online. We don't require anyone to go see a doctor. We don't do any blood work or urine. Part of that is because it's capped at 50 Bitcoin. $5 million today is higher than maybe the more streamlined underwriting for traditional insurers. But we use the same underwriting manuals as every other life insurance carrier. And as a fully licensed and regulated carrier, we actually get access to medical records. So each applicant applies through our online portal. There is no physical paper or anything like that. The process itself from first point of contact to bound and enforced policy can be as little as two days. And you'll do a 50 Bitcoin policy with no blood, urine? Correct. So what we'll do is they will go through the application, which includes a health attestation form. So they'll make a bunch of comments about their current health. We then can pull medical records and doctor's notes and things like that to cross compare. And for us at this point, that is satisfactory for us to make a full underwriting. And are you declining? Is there a lot of declines? Yeah, I don't know the number specifically, but my guess would be 30% of our applicants. And it's actually, we go through a pre-qualification form before we do the full application. So people aren't actually getting denied life insurance. They're just not getting moved to the application for life insurance. But probably about 30% of people don't pass our pre-qualification screen because we're not doing any substandard risk class right now. And what's the youngest you'll do? 18 to 65. Okay. So what if a 21-year-old doesn't have many medical records? Is it one of those, like, you're just straight up taking their answers? So, well, so today we're available in the U.S. and in Canada. We have not, I don't think, run into any situation where an 18- or 21-year-old has, like, no medical records. Right, but very limited. But if they have limited, then we will likely take... their health attestation form. And then if there is a blatant lie, if there's a mortality event and they clearly knew that there was something going on that they didn't provide on the attestation form, then that would be subject to void that policy. Is that a two-year in the United States? There's like a two-year? Yeah. So typically, what is typical is like, as an example, suicide. There's a two-year period where that would void the policy. But we haven't really run into many situations where someone has no medical record. And if they have some medical record, then it's probably fairly up to date. And so we'll take that. That's actually why we're in the U.S. and Canada right now is because there's more reliable medical record. And we're working on rolling out this product globally. We just have to rethink through some of these underwriting questions where we may not have access to reliable medical information. This is you're probably a lot of podcasts you've been on or more Bitcoin people that know very little about life insurance I'm the exact opposite I know very little about Bitcoin, but I know a little bit more than the average person about life insurance when it comes to Underwriting in the United States a lot of times You'll get like approved up into a certain dollar amount and then they'll do hard underwriting for for bigger And maybe that's something that you guys do in the future is like hey, well We'll get 20 Bitcoin without anything and then maybe... And that's even in practice a little bit today. Okay. So our underwriting team has the ability to make those decisions. Yeah, a call. So we've had individuals limited to a 10 Bitcoin policy. I understand. Or something like that based on either medical record or lack of medical record. Okay. So our underwriting team can make those calls. Cool. Any other questions when it comes to the company? I want to talk about the contract next, but anything company-wise that... is like, I didn't ask or you didn't mention that you think is important. I think that people like to understand who's on the cap table. Yes, I think, and there's some big names. So we, I like to brag about it because there are some big names, but I think that it also is a confidence boost for people that like these big names are backing us. So we've raised, like I said, a little over $20 million of seed capital that was from investors like Sam Altman was one of our first two checks in the door, CEO of OpenAI. Lockie Groom was the other first check. He was like the sixth employee at Stripe and is now a solo capitalist. But then there was like a who's who of Silicon Valley angel investors like Parker Conrad, Dylan Field, people like that. And then the second tranche of seed capital was much more institutional. So that was Northwestern Mutual, largest life insurance company in the U.S., Hudson Structured Capital Management, Santander's venture arm called Moro Capital. um So much more institutional in the second tranche. And then we just raised a $40 million Series A, and that came from only three checks. We had two co-leads, which were both crypto investors. Folger Ventures is a Bitcoin and stablecoin only fund. And then Framework Ventures is one of the top crypto investors in the space. And then the round was rounded out by Wences Casares, who founded Zappobank, which is the largest Bitcoin bank in the world. Before we talked, I guess before the cameras were on, you were telling me like the business model is you guys pay 2% to policyholders. So under the Internal Revenue Code, the legal requirement for a product to qualify as whole life insurance is the life insurance contract has to guarantee at least 2%. Okay, guarantee 2%. So we price it at the legal minimum because we view the risk-free rate of return of Bitcoin returns as 0%. So anyone that tells you they can get you risk-free yield in Bitcoin is lying to you. So we price it at the legal minimum. We target 3%. Bitcoin returns. Because you're lending to Coinbase? So we'll lend to institutional borrowers. There are people in the world that actually need to spend Bitcoin to turn it into more Bitcoin. These could be traders or Bitcoin miners or things like that. And we can structure as a life insurance company, we can structure a financial product where we essentially swap Bitcoin with them. And the Bitcoin that they receive as part of that swap is new cost basis of Bitcoin so they can get rid of it tax free. And then we get the full collateral upfront. So like you would send me 100 Bitcoin and I'd send you 97 back. So it's actually a credit risk free transaction for us, which is great. But so we get 3% Bitcoin returns. So we're never taking dollar risk. We're never taking any currency or exchange risk because we pass 2% on to our policyholders. And the 1% is how we, that's our spread. That's how we make money. Here's a dumb question. Dumb question incoming. Ready for this? What's in it for the investors to put all this money for something that doesn't feel like that crazy high upside in a world of AI and other crypto projects? Well, like, why are they investing? There are a lot of people investing in Bitcoin treasury companies that have no profitable business model, but they're just levering their balance sheet to buy Bitcoin. Hey, it's Caleb Williams here. I'm just interrupting this video quickly to invite you to check out our and asset vault. you may have been there. We've actually revamping it. And if you are somebody that wants to learn more about is life insurance the right fit for me? Does this and asset make sense? Like, does this actually help me be more efficient? We've put together a 10 minute documentary style video that I think does a really, really good job giving the history, why the and asset, different setups and designs that we use. And then we have an and asset vault that gives like case studies, calculators, handbooks, and so much more. We are here to serve you, whether it's a conversation, whether it's education or the video. So make sure to go check out andasset.com slash vault. Learn more. And if you think about like, so MicroStrategy, Sembler Scientific, MetaPlanet in Japan, Nakamoto, the last year, the big theme in Bitcoin is these Bitcoin treasury companies that literally are just trying to pile as much Bitcoin under their balance sheet as possible. Now, if you think about what we are, what... is different about us is that we actually are a machine that turns Bitcoin into more Bitcoin, which is different than them. They're selling 0% convertible bonds to buy more Bitcoin. We're actually generating Bitcoin yields. And so the return for investors is not 2% returns. They're investing dollars. And if you think that Bitcoin will continue at a 65% kegger, or if that's going to come down to 50% or 40% or 30%. 40%. Then you're basically taking a levered bet on Bitcoin without taking the risk of true leverage. Or I guess there is leverage within our business because we're lending Bitcoin out. But they're making a bet that Bitcoin is going to be higher in the future and that we're going to make more and more Bitcoin as a company because our profitability is in Bitcoin. Okay. And I would imagine the bigger you guys get, maybe the better deals you'll be able to get long term. Of course. It's usually how it goes. So the... What I think people get really excited about is there's like one or two stories that people, I think, can really grasp onto is one is we could be the Berkshire Hathaway of the Bitcoin space, a financial institution that's a giant that churns out conservative returns. The other is similar, but if you're a big Bitcoin or crypto company, we could be the Athene to your Apollo. I think the reason that people get excited about us is that we are uniquely positioned in the Bitcoin space. The crypto space generally, and I like to separate there's Bitcoin and there's crypto, they're different things, but I'll just speak broadly. The digital asset space... Generally is one of like the hair, if we're talking like tortoise and hare, where everything is like fast returns, high volatility, super liquid. There's no like long term capital provider who's just clipping along at conservative steady returns. And so we are the first company that's really doing that. And there's a reason that every skyscraper in Manhattan is owned by a life insurance company. is because they're all permanent capital providers that are seeking long duration, conservative returns. There's nobody doing that in Bitcoin except for us. So we are actually seeking to build out the yield curve beyond like two or three years. We would love for there to be a third year yield curve in Bitcoin. And we actually negotiate against ourselves in many cases from a rate perspective for duration and capital or principal protective covenants in those loans. So we'll say, you don't have to pay us 4% interest on this year loan, pay us 3% interest on this year loan, but we wanna be the most senior debt in your debt stack. And we want a parental guarantee, whatever the other covenants are that would protect our principal. Yeah, I love it, dude. Okay, so we talked about the insurance company, which I think you've for better or worse answered all the questions. I'm looking forward to seeing all the people that are like, hey, why didn't you ask this? I'm trying it, I got notes, I'm doing my best. All right, now let's talk about the actual contract because that's what life insurance is. It's a contract, and not all contracts are created equal. I did get a policy from somebody, and you took a look at it and said that it's definitely from your company, and we could talk about it. It's a 37-year-old who puts 0.1 Bitcoin. Per year for 10 years. For 10 years. So one Bitcoin total. For one Bitcoin total. the Bitcoin value and the policy loan value. I think I know what that means, but tell me what this means. Is one a surrender value, one's the ability to loan? Exactly right. So the Bitcoin value is analogous with cash value or surrender value. Okay, yes sir. We could use them all interchangeably. We like to say Bitcoin value because we're different. Yeah, that's right. And then the policy loan simply after two years is 90% of the Bitcoin value. the policy. So we will lend up to 90% loan to value against the cash value or the Bitcoin value. And so that column, when you look at the illustration, which I think now is a good time to say like, we provide normal illustrations. People can come to our website, they can apply, like all very normal life insurance things. So you'll know because every value in the contract is guaranteed. You know, year by year, exactly what every value in the contract will be. in Bitcoin terms. And because it's guaranteed, there's no guaranteed and non-guaranteed. You guys are just saying, hey, we're guaranteed. We're not going to even show you the non-guaranteed because you're not getting it right now. Exactly. Our joke is that we took a policy from the 1830s and changed the word dollars to Bitcoin. Yeah, I love it. We stripped out every complexity that has ever been baked into life insurance products, and it's as simple as possible. I will say we didn't talk about this before, but we'll... for sure have a link down below. If you want to check out this company, check out for yourself. You guys have a pretty cool process on how they can wade through that. So, okay. So the first year someone puts in one 10th of a Bitcoin and they have zero Bitcoin value, zero cash or policy loan value. Year two, you're 0.2 total. Your Bitcoin value is there, but you have no policy loans. Is that anti-money laundering reason? Correct. So right now- Is that a Bermuda thing or is that- I would, well, I'll caveat. Right now, we have a two-year period where you cannot borrow against the policy. There may be a point in the future where that gets amended, maybe cut in half or something like that, but it's an anti-money laundering protection. We put that in because we, I think, well, hopefully what you've understood so far from this conversation is we've done everything as conservatively as possible. And so it was just a very conservative approach to say, as part of our anti-money laundering practices, we're not going to make loans for two years against the policy. Yep, okay. I understand that. So year three, you have another 0.1 going in and now your policy loan value is 0.12. So you've essentially, and again, I'm going to put this in dollars, even though, forgive me. So it's like potentially we're $30,000 or more in as Bitcoin increases and you have access to 10,000 year three, essentially. Now the loan rates are very competitive. They're at 3%. So because our investment return is 3%, we just essentially charge a wash. That's great. So if you borrow... And it's consistent. It's like either you could be our creditor or... And it's great because it's credit-free or it's credit risk-free because you're just borrowing from your future self, which is our liability to you. That's right. Okay. And talk to me about the current landscape in the Bitcoin. Bitcoin world like if I had Bitcoin I could also take a loan against it. What are the going rates for for that? Yes We'll talk through the current market environment, and then I'll dive a little bit deeper on our loan product, our loan feature, just to drive home, I think, why it's attractive for most people. So in the current landscape, if you were to borrow dollars against your Bitcoin, and there are a bunch of providers out there that'll do this, they'll lend you, if you're retail, they'll lend you anywhere from 50% to 70% loan-to-value. Okay. And they'll charge today typically between like 11% and 14% interest rates. That's high. That's high. So. You get 50 to 70 percent loan value at 11 to 14 percent interest and then you're and you're kept your your Bitcoin is still collateral and your Bitcoin is collateral and you're getting dollars against it So if you wake up tomorrow and bitcoins dropped 40 percent, which it sometimes does You would be either Liquidated from a margin call or they would be calling you non-stop to get you to post more Bitcoin collateral So what's attractive about our loan feature? Yeah. Is that the collateral is the Bitcoin value of the policy, which is like the cash value. But it's in Bitcoin. So the collateral is Bitcoin. When you take out a loan, and we do 90% loan to value at a 3% interest, the loan that you take out is received as Bitcoin. Okay. So Caleb, you have, let's just use round numbers. You have a policy where at some point in the future, your Bitcoin value of your policy is at 10 Bitcoin. You could borrow up to 9 Bitcoin out. But those nine Bitcoin that you borrow are brand new Bitcoin to you with a new cost basis. So no matter what the price of Bitcoin at that time, you can sell those Bitcoin tax free. So if Bitcoin's at a million dollars in the future, you would borrow nine Bitcoin out. You'd sell them for nine million dollars cash. No capital gains tax on that sale. Right, because it's a loan. Because it's a loan. And the beauty of it is that your loan is nine Bitcoin. It's not nine million dollars. So you can rest easy at night knowing that you're never going to get margin called because your loan is nine bitcoins of loan against 10 bitcoins of collateral. You would have the $9 million tax-free to go do whatever you want with it. You either have the choice to never repay the loan because it's just whole life insurance, and when you die, the death benefit will cover the outstanding loan balance. Or if the price of Bitcoin drops 40%, instead of getting margin called, you would just take your $9 million of cash, buy cheaper Bitcoin. And use that new cheaper Bitcoin to repay your nine Bitcoin loan. Yeah. And vice versa, if Bitcoin goes up. You just never repay it. You just never repay it or yeah, because you wouldn't have to repay it because the one Bitcoin in this scenario would be, it would keep everything afloat. Correct. Okay. And then you would, and so the, let's take insurance out of it. I see obviously all the benefits of whole life insurance you guys are capitalizing on, which is. And maybe just like very quickly, three basic benefits of whole life insurance, all captured here. So you have a guaranteed death benefit no matter when you die. From the day you fund your first premium to whenever you die. It doesn't increase though. It doesn't increase in Bitcoin terms. Now if Bitcoin goes to $10 million, that's increasing a lot, but it's a flat guaranteed amount that pays out to your beneficiaries income tax free. If you buy it through an irrevocable trust or some other... estate planning, vehicles, then we can also pay out estate tax-free as well. So, but the first benefit guaranteed tax-free death benefit. The second benefit is guaranteed growth rate that compounds tax-free in the policy, 2% in Bitcoin terms. And then the third is tax-free policy loan. So we just talked through that. If I were a Northwestern Mutual sales rep, I'd be selling you the same three benefits. Ours is just in Bitcoin as opposed to Bitcoin. And so back to like if I had Bitcoin and there's no other companies that will lend me like I put my 10 Bitcoin up, they'll lend me nine Bitcoin off and keep mine as collateral. And and like I'm trying to think why, because the reason they wouldn't do that is if they but if they had my Bitcoin as as collateral, why wouldn't someone be willing to do that? And it's like, hey, if I can't pay it, they just keep the Bitcoin. Well, so I think the challenge there is it's A, it's less lucrative for them. Okay. They're better off charging you 14% interest rate in dollar terms. And then second, it's a capital intensive business for them because they can't turn around and relend you. They can't take your collateral and give you Bitcoin back. So they have to hold your collateral. That's fair. Yeah, because it's a pun. If they... If I give them 10 Bitcoin, they give me nine back. They still have they they wouldn't they couldn't give me 100 percent of. Yeah, I would have to walk through that, but I still see the value of like taking loans versus liquidating is valuable across the board. And I think like, to be fair, Elon Musk, other people use that in their own stock. Like, so I think it's anytime you can take if you can lend again, it's an asset. There's but I'm trying to figure out the difference between doing that minus the rate difference versus doing it here. You know, so, yeah. So I think what's important to note here is that. When you borrow against your life insurance policy, your life insurance policy continues to grow 2% year over year. Yeah. So when we charge you 3% interest, you're really paying yourself 2%. So it's a 1% difference. And then you're paying us 1%. Right. And so because of that growth, you are never going to get margin called until at least your 100th birthday. Your loan can never be bigger than your policy. I understand that. I think the pushback, though, is let's continue to go through this. So in year, Let's say year 10, year 10, I've already, I paid one Bitcoin. My, my policy and loan value is 0.6. Okay. 0.626. So to be fair, we could even say it's 0.7. In this calculation. Now this could be, this could be the, we could look at something else. This calculation, it takes year 26 in this, this calculation, 26 years to have more than a Bitcoin available. to loan against. The policy value breaks even at year 19. So if I wanted to surrender it, which is again, you should never set something like this up to surrender policy. So the policy loan at 26 years to have more than what I funded the first 10 years. I think that would be the pushback is you're right. It's only a 3% loan, but you could also look at that and say like, man, these terms are rocky. you know, tough. So, so like I said, I am not a Bitcoin salesperson, right? The people that are doing this believe that Bitcoin will be worth a million dollars or more in the future. So what's keeping them from not just putting it into a fund and lending against it? You're saying the 50% loan to value and 14% interest rate, because this is taking 26 years to have what I've put in originally. But what you're talking about is borrowing dollars against Bitcoin as the alternative? Maybe, I'm just trying to think, continue. Right, so what you're talking about is borrowing dollars against Bitcoin as the alternative. So your risks there are, first, there's margin call risk. Every Bitcoin bull market includes like multiple 30 to 40% drawbacks or drawdowns. So even in a bull market, highly volatile. And if you're... If you take out a loan at the wrong time, you'll get margin calls within a very short period of time. And so you're free of that fear. The second is that you never have to repay the loan if you don't want to. And then the third is that because our loan is in Bitcoin, so you're pointing out you put one Bitcoin in over 10 years. You don't have access to borrow one Bitcoin out for 26 years, which is valid per this illustration. Yeah. But if you believe that- Bitcoin right now is $108,000 and you think in five years it'll be $500,000 and in 10 years it'll be a million dollars and in 20 years it'll be $10 million, then your dollar loan value is significantly higher than the Bitcoin that you've paid in. Because I'm paying, in this example, $10,800 in year one premium. Because that's 0.1 Bitcoin right now at the time that we're having this conversation. And most of our policyholders are just pre-funding their policy to lock in today's price of Bitcoin for all 10 years worth of premium payments. So, yes, it takes a long time to be able to pull one Bitcoin out in the future. But one Bitcoin in the future could be dramatically different in dollar terms than it is today. Which is the opposite of borrowing dollars. because I know for a fact that dollars... will purchase me less and less in the future. Yeah. And so there's like two scenarios. There's a person watching that has most of their money in dollars. They could fund a life insurance policy. And you got to understand like life insurance policies that we usually set up at Better Wealth like have 60 to 90% first year liquidity. Our goal is to break even within four to six years, meaning you have more money than what you've put in. And the death benefit is far greater than, I mean, far greater than the ratio I'm seeing here. So the From a protection and efficiency standpoint, when US dollars and the life insurance chassis is more efficient, but the pushback that you would have is that's in dollars. Yeah. So the pushback, exactly. The pushback I would have is that in the last five years, the purchasing power of the dollar has dropped 20%. And the purchasing power of Bitcoin has gone up 800%. Okay. So then what would keep someone from funding a life insurance policy, taking a loan and buying Bitcoin? Not a Bitcoin life insurance, just Bitcoin. Yep. Hey guys, I just want 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. The problem would be as Bitcoin goes up, you're able to get less. You're purchasing less and less Bitcoin. But the pushback could also be if someone doesn't pre-fund, and let's say I'm going to commit to 10 Bitcoin over the year. Like, it's pretty risky for me if I'm not sitting on all those 10 Bitcoin. Yeah, I would recommend for anyone doing this. And again, like we're, Our customers are Bitcoiners that hold Bitcoin. I would not recommend anyone buy a policy if it has more Bitcoin and premiums than they already have. But then they wouldn't necessarily... So it's for people that are literally going to sit on Bitcoin and are set on sitting on Bitcoin and passing it on to the next generation. Is that fair? Yes, which if you identify as a Bitcoiner is... There's a reason that Bitcoiners say the acronym HODL, hold on for dear life. None of them want to ever sell. and this is a the most tax efficient way for people to hodl their Bitcoin. That's okay. Okay. I can, I can get behind that. I'm just trying to, I get, do you get where I'm coming from? Like, so what I think that if I had 10 Bitcoin and I put this in, yes, I'm guaranteeing, let's say if I had 10 Bitcoin, I'm guaranteeing, and the guarantee is a bad word in the insurance space, but like, let's suppose that I will have 20 billion, 20 Bitcoin on the death benefit. So immediately by putting 10 Bitcoin over 10 years, and let's just say I put it all with you guys. Cause I'm like, I don't want to mess with it. So I give you 10 Bitcoin over 10 years. It's going to fund whenever I do pass away, there's 20, 20 Bitcoin. I get that. But I'm essentially saying, see, for quite a long time before I can actually lend. I mean, lending against 3% is attractive, but it does take a while. I mean, a 26 year break even is a, is a, anyone that's like into life insurance knows that that's a, like any. stock company i can't imagine even thinking about selling a stock company like with those terms but like the big difference i need to constantly be reminding myself is that the people that are in bitcoin they're not going to sell their bitcoin so when you're and don't take this in and don't please don't take this as a in offense but uh if you're the only hot dog stand you don't have to be like you guys don't have to compete with 10 other insurance companies and say my my guarantees are better blah blah like you're the only one in town there's like We will insure you your death benefit, which is a need that everyone should at least be aware of. And you don't have to convert into dollars to do that. Yeah. So a couple of things on this. The first is you're focused on the 26 year break, which is a valid thing to be focused on. But I think what I would continue to remind you is that if the price of Bitcoin goes from $100,000 to a million dollars, then your dollar on dollar access to capital. It's much faster. The second thing is your point on why wouldn't I buy life insurance to borrow against to buy Bitcoin, not only over time if the price of Bitcoin appreciates, which is not a guarantee, but if it does, when you borrow dollars, you can purchase less and less Bitcoin. That Bitcoin that you purchase less and less of is now taxable if you ever do anything with it. And the difference is our policy is compounding 2% year over year in Bitcoin. So it doesn't matter how expensive Bitcoin gets. You're still compounding at the same rate of number of Bitcoins. Yeah. And then the last piece, which is now escaping me. What was the last thing you said? It's escaping me. But I'll watch this back and I'll comment on it. Yeah, I totally hear you. And it just goes back to the, yes, if Bitcoin goes up, but you're also talking to the person that already, it's already assumed that they have Bitcoin. So it's either. What do people do if they don't? Is it just this or putting it on cold storage? So, yeah. So what's the alternative? The challenge is that Bitcoin is an amazing asset for wealth creation. Bitcoin is like a 2.1 or 2.2 trillion dollar asset. And up until recently, almost all of that was owned by individuals. In the last year, it's become much more institutional heavy, but like a lot of wealth has been created for individuals. The problem with Bitcoin is that you can't eat a Bitcoin, you can't live in a Bitcoin. So you need to off ramp if you're going to tap into like that wealth that's been created to use in the dollar world. And so your options are... either borrow dollars at 11 to 14% interest rate, and then they have margin call risk and term risk and things like that, or sell the Bitcoin, lose the exposure to Bitcoin, which you want, and pay capital gains tax on that sale. And so the benefit here is that if Bitcoin does go to $250,000, $500,000, a million dollars, $10 million, whatever it goes to, you can at any price in the future sell Bitcoin tax-free by taking out the loan. and selling the borrowed Bitcoin, and you have the option to either ever repay it or not. So I actually totally agree with you. Horrible product for short-term liquidity on Bitcoin. If you came to me and said, hey, Danny, I have a tax bill due in April. I need liquidity. Yeah, don't do this. Yeah, this is for... But if you want to have wealth in Bitcoin that you want to be able to live off of, this is the best medium to long-term strategy. commend you because a couple things. Number one, when you're the first to anything, there's... Okay, you can say it. This is it. Okay. This is it. I'm going to remember what I said. The last thing that you had said was... All you need is me is to be encouraging. No, no, this is perfect. The last thing that you had said was we're the only game in town, so we can price it however we want. Totally true. But the benefit to our policyholders is that we've been able to strip out so much margin that insurance companies bake into their products. So if you think about the life insurance world today, I don't know how many life insurance carriers there are in the United States, but if they all have a 10 pay whole life products, by and large, it's the exact same thing, right? Well, let's continue. The answer is no, but let's say on the mutual, yes. A lot of the mutual companies, their 10 pay is going to be somewhat competitive. So, so. The difference is that they all need to incentivize agents to sell their products. And they do that by baking in more margin to be able to pay higher commission. So we pay, like, people on Zoom calls try to spit in my face because when I tell them our referral compensation program. Rather than paying 130% first-year premium, we pay like 8% first-year premium because this is a razor-thin margin product. Yeah, and you don't have to. That's the beautiful thing. Well, it's not that we don't have to. It's that we can't. We literally don't have enough margin baked in to compensate because we've just stripped out all of the complexity of the products that normal life insurance carriers bake in to justify higher margins to then be able to pay higher commissions. It's funny that you say that because you're totally right, but insurance companies are getting a greater yield. than what you guys are getting. So they're able to pay more commissions. They're also able to get a more competitive product and stay profitable. Because one of the things that I look at in any insurance carrier is just the IRR. Let me see like the death benefit ratio between premium and death benefit and the interim rate of return. And that's after commissions and all that stuff. And this IRR, I think would be, you know, in the less than two for a while, because you're after building cost of insurance. But what I was saying is you guys are the first. You guys are paving the way. And I see from an estate planning standpoint, when people are like sitting on a ton of Bitcoin, they want to transfer that. This is, I mean, you guys are the only ones in town right now that can do this. You're giving, it's tremendous value. And you're totally right. If it's a short-term liquidity play, the infinite banking world, like there's, like if you come in looking at like that, not the greatest. And if you're like, when I first. heard this, I literally thought, I was like, this is brilliant. This is like a way to arbitrage. It's almost like private placement. It's like, let me get 10 Bitcoin, give me a nine. It's like the death benefit is making it life insurance, but we don't care about the death benefit. We're doing all these other things. And so I definitely am with you here. My whole question would be if we had person A who did this and then person B did proper trust planning, didn't do this and like invested their Bitcoin very, very conservatively, what the difference would be. And they would still get some of the same tax benefits when they pass it on because of special trust. And so the argument would be, if I don't care about liquidity, I can set up some aggressive, you know, irrevocable trust, have the Bitcoin be able to set into that, you know what I'm saying? And so that would be like a maybe a part two when we could do like Look at this because I am a huge fan of life insurance. Like you're literally at a life insurance summit that I'm hosting, which is like is incredibly lame when you tell people that are not in the insurance space. They're like, what are you, what event are you doing? It's a life insurance summit. And they're like, you see their energy drain on their face. And you're like, okay, we're time to change the subject. So it's like, I'm a big, big fan of insurance and I'm... The reason this caught my eyes is like, this is super innovative. And so I don't know. Yeah. Yeah. I just like the last thought that I have here is I revisit the fact that if you think that Bitcoin is going to appreciate 3% or more going forward, then with the 2% guarantee, which is the most conservative guarantee you'll see in any life insurance, then this will be the most performant whole life policy on a dollar basis. Okay. So that would be one thing. And then the second thing is to your point about. If you had an irrevocable trust and you could invest Bitcoin for Bitcoin yield, like you get some benefits. The biggest piece here is that the Bitcoin, so not only is the death benefit higher than the premiums that you pay, so the payout of the policy is more than what you pay in. But if you have a irrevocable trust by the life insurance policy, so the death benefit pays out more Bitcoin than it pays. But those Bitcoin that pay out are brand new cost space is Bitcoin. So that's really important. if your alternative to your point is just funding an irrevocable trust with Bitcoin and then maybe investing that Bitcoin for Bitcoin yield, A, that generates short-term capital gains or income tax on the yield of the Bitcoin itself. But then that Bitcoin cost basis remains at its, whatever the cost basis is, even after you die. It doesn't get stepped up basis. So now your heirs are inheriting really low cost basis Bitcoin. And then they have tax implications if they ever do anything with it. So that would be the... the feedback on the trust planning piece. And there's questions here that what if Bitcoin drops a lot, but it doesn't matter because you guys are all backed by Bitcoin, which makes sense. Yeah. I mean, it matters to the policyholder because their policy is worth less than dollar terms, but it has no impact on like the solvency of our company. I think a legitimate risk is if people do, I think what you're going to see, and I don't want to speak this over you, but as people do do this, especially if they're Bitcoin people and they're committing to one Bitcoin a year. And then... Bitcoin goes up or like it'll be interesting to see if people see through it. Like what happens if they don't if they only pay five years and there's a policy. It's a lapse. It's a lapse and considered a surrender. So, yeah, it'll be interesting to see if if Bitcoin goes up a lot, there could be an opportunity cost of funding that you see. And if Bitcoin drops a lot, it'll just be interesting to see the people that don't pre fund see through it. And that's like anything. by the way. It's, but I think if you, If you think about Bitcoin as a currency, it's the same conversation as you would never advise anyone to buy life insurance with monthly premiums that's greater than their income. That's correct. They can't afford it. Yeah, yeah, yeah. So I wouldn't recommend anyone would buy this with Bitcoin or that's total premium payments more than the Bitcoin that they already own because it might be too expensive. They can't afford it. So we don't want to see anyone lapse because they can't afford the premium payments. and That's actually a big part of why most of our policyholders are pre-funding it up front. And just use me as an example. I own a policy. I bought the policy 15 or 16 months ago. I think Bitcoin was like $40,000. I pre-funded it all. And now I don't owe the insurance company anything else for the rest of my life. My life insurance policy will be enforced for the rest of my life. And I basically locked in like $40,000 per Bitcoin for all my premium payments. I love it. You want to get some questions from there? audience? Let's do it. Okay. So question number one is if the goal is sovereignty, wouldn't it be better to own Bitcoin outright and use a mutual whole life to finance Bitcoin purchases rather than using the two? I think we already addressed that. Yeah. Listen, we wouldn't necessarily try to convince anyone to put all of their Bitcoin into this. Okay. If the goal is sovereignty, but this is a way for you to use your Bitcoin wealth tax efficiently in a plan as opposed to just burying it in your backyard or putting it on your map. Makes sense. Okay, next question. Normally, life insurance death benefits are income tax-free, but Bitcoin is property, not currency, under the IRS. Has the IRS ruled that Bitcoin payout from life insurance contracts is income tax-free, or will their heirs be hit with capital gains or other issues? So this is very, for the insurance nerds, very interesting point. The entire insurance code under the IRS is written in reference to value instead of currency or dollars. Interesting. So you could create a, we created a life insurance company in Bitcoin. You could create a life insurance company in any commodity, in any security, because the entire tax code is written in reference to value instead of. cash or dollars. Next question, does Meanwhile offer a PUA mechanism where I can build additional Bitcoin through the policy? I think the answer is no, not yet. The answer is no. Okay, when you guys get there, let's hop on. I think I have a lot of people that will get on when we get some more competitive cash value. Are there any liquidation provisions or only loan provisions? I would imagine you could surrender your policy at any time and get the cash surrender value. You can surrender and we also provide what we call a surrender value enhancement rider. which is essentially a return of premium rider. So for people that want that lever to be able to exit the contract, they can get their premiums back. Are the Bitcoin reserves fully collateralized one-to-one with client liabilities? It's not one-to-one. We are subject to the same exact regulatory requirements as any other life insurance company in Bermuda. So every time we put capital at risk, we have to take some of our own Bitcoin and hold it as reserves. So that includes... Writing policies, making investments, anything like that. So it's not a perfect one-to-one, but it's like pretty complicated insurance math that smarter people than me do. That's right. And me, by the way. Any other questions that I didn't ask that you're like, I mean. I think, you know, the people can find us pretty easily. Our website is meanwhile.bm. There's a big button that says get started. If all you do is leave your name and email address. I I will actually individually reach out and I'm happy to spend 30 minutes with anyone that has questions on a Zoom call or something like that. So I'm happy to chat with anyone that has questions, but really appreciate you having me on here. And would you be down if this does well to come back on and answer other questions? And I also, we have this thing called the exchange where I am the middle person and I try to bring two people. And maybe if some of you guys are passionate around for meanwhile or against it we may be able to have part two and I think what you guys are doing is great. I appreciate last minute you come into this event, you speaking, supporting, being on the podcast. And guys, I just want you to know, like, it's only possible because we have an audience. And so thank you for making this interaction possible. And Danny, I really appreciate you showing up. And besides you being a Minnesota Vikings fan, I really like you. Yeah, you know, I would say that your audience, the questions, part of the reason I reached out to you is just there were great questions. And I thought that it'd be fun to be able to talk through some of them. Really glad that we were able to do that. And hopefully if there are more, we can do it again. All right. Thank you.
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