Banking

Seven Tips for Buying Whole Life Insurance

Seven Tips for Buying Whole Life Insurance

Are you ready to own your lifestyle? One of the key ways we discuss how to do that is by buying whole life insurance. That’s the secret to infinite banking. Before you become your own banker, though, you need to be informed. Here are seven tips to keep in mind before you make the plunge.

Tip #1: Find Out the Company’s Rating

Before you invest your money in buying whole life insurance, you need to determine if the company is reputable. Find out what the rating of the company is, whether it’s participating or non-participating, and what its rating is on Standard and Poor’s or Moody’s. It’s super important to know the company’s rating, which is kind of like going to school. You get a grade depending on the performance of the company, so you want to know those performances.

Tip #2: Find Out How Long the Company Has Been Around

For the majority of companies we work with, they were founded in the 1800s or early 1900s. That lets you know they’ve been around a while and still have their doors open, which is a good thing to know.

Tip #3: Find Out How Long the Company Has Been Paying Dividends

Most of the companies we work with have been paying dividends—and paying them consecutively—for the past 100 years. That lets you know it’s a strong company when it comes to dividends, and you know you’ll receive yours. And if the company has been consecutively paying dividends for a century, they were paying through the Great Depression when many people were struggling. That says something.

Tip #4: Find Out the Loan Structure

The key to infinite banking and buying whole life insurance is that you can take a loan against the cash value. Because of that, you need to know the loan structure: fixed or variable rate.

Tip #5: Find Out the Actual Loan Rate

How much is the company going to charge you when you get a loan? What is the fee? At Wealth Nation, we work with three companies, and the loan fees are between 4% and 5%.

Tip #6: Find Out Term Conversions

Let’s say that you already have a term life insurance policy. Is that convertible to buying whole life insurance? Or if you have a specific situation where you need to add term insurance into whole life to provide more death benefits, you need to be sure that the companies you’re working with have the ability to convert term to whole life insurance products.

Tip #7: Find Out What Their Portfolio Looks Like

The final tip for buying whole life insurance is whether or not they have a good portfolio of whole life products. There are a variety of reasons you would use one product versus another, such as age or health. You want to know if the company offers a good portfolio of life paid up until 100, 121, or 65. And you want to know if they have a 10 pay, 15 pay, or 20 pay. All of these things have different perks or benefits depending on what you want to accomplish when starting your banking policy.

The Truth about Buying Whole Life Insurance

When we share about different options for buying whole life insurance, many people think they just buy the insurance. Period. But life insurance is just the tip of the iceberg. There are so many different categories into which life insurance falls.

For instance, the 10 pay, 15 pay, or 20 pay refers to how many years you have the policy before you’re done paying for it: 10, 15, or 20 years. And life paid up to 65 or 100; that depends on the age of how long you’re covered. Although we’re talking about buying whole life insurance, you also want to make sure you’re covered for your entire life.

If you’re not paying attention when buying whole life insurance, some policies can be written for different things. You want to make sure you understand what your options are.

Why You Need to Know about Buying Whole Life Insurance

At Wealth Nation, we teach go-getters how to own their lifestyle through a concept called infinite banking. That starts with buying whole life insurance. People ask us when they’re shopping for insurance products which products are best, so these seven tips will help you get started.

Remember that these tips are specific to whole life insurance. We’re not talking about universal, index, or term. Different aspects come into play when you’re buying other products, so only apply these tips to buying whole life insurance.

If you already have an insurance policy with a mutual company, you may be all set. But it’s important to have the tools to understand exactly what type of policy you have, specifics about the company you’re working with, and what, exactly, you should be looking for. And that information is right there in your paperwork. Pull that out, read it, and see if you have any of the features we’ve discussed in your current policy. Or call your agent and ask questions.

We invite you to join us on Patreon, where we have information to take your infinite banking education to the next level. And be sure to follow us on YouTube and Facebook to stay in the conversation.

Darius & Carmen Britt

Author Darius & Carmen Britt

More posts by Darius & Carmen Britt

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