https://youtu.be/FtpKs0X1SFs

Considering a 10/90 premium split (Base/PUA) policy design with a Blended Term PUA Rider for an IBC policy over a design truer to Nelson Nash's original 33/67 split?  Was it because someone showed you that you can get more cash value in Year 1? Or an earlier break-even point, and still outperform the cash value by Year 30? 

Unfortunately, this newest fad design hurts clients who want the best place to store cash and build investible capital. When you're looking for answers, it can be really hard to sort through what's best. And to separate what’s marketing vs. what’s true education.

We strive for simplicity but accuracy, disclosing without being confusing, breaking down without misleading. That's because our ultimate goal is empowering you to make decisions. 

It's tough to make decisions through all this marketing noise. Because it takes your attention off of what really matters: control.

Today, Bruce and I are talking with MassMutual Brokerage Manager, Rodney Mogen about the risks of a stripped-down 10/90 premium split design.

10/90 Premium Split & Blended Term PUA Rider

We’ll discuss IBC policy design, the blended Term PUA rider, base/PUA premium split, and ideal whole life policy structure and answer:

What are the risks of a policy with too much PUA premium?

What is a MEC, and why do you want to avoid it?

Why is a Blended Term PUA Rider used with a 10/90 premium split design and how does it increase your risk as a policy owner?

Why and how do you give up long-term dividend growth when you have minimal base design?

Policy illustrations and marketing vs. actual policy performance.

The difference between long-term policy performance vs. short-term cash value.

The trend of companies that kept their dividends high over the last decade, now lowering dividends.

So, if you want to get the best Infinite Banking policy, maximize early access to cash value, and get the most guarantees and growth so you can maximize the use of every dollar towards creating time and money freedom, tune in now!

Where The Infinite Banking Concept Fits In The Bigger Picture

The Infinite Banking Concept is just one step in the greater Cash Flow System.

It’s the peanut butter to your cash flow sandwich.

While it’s nestled into Stage 2, Protection, it also improves everything else around it.  Infinite Banking helps you keep more of the money you make in Stage 1, amplify your cash-flowing asset strategy in Stage 3, and accelerate your time and money freedom.

The Bottom Line About IBC and Premium Split

Nelson Nash, the Father of the Infinite Banking Concept, warned against people using the concept as a sales tool with improper policy design. No one should be nervous about IBC; they should be worried about policies that stray off course and take on risk.

Insurance is a risk transfer product.

The entire reason for using Whole Life Insurance over UL, IUL, VUL, EIUL, etc. is the safety and guarantees. So why would you add a rider that lacks guarantees?

Policies with too little base and Blended Term PUA riders are taking on more risk than is necessary. If you go the route of 10/90 premium split and Blended Term PUA’s, you are sacrificing safety and guarantees for a few extra thousand dollars in cash value today.

Stick with a ‘Pure’ PUA rider and a proper amount of base premium, and you can sleep well at night.

The safer approach will provide more certainty over a much longer time horizon and wider range of possibilities. Your cash value is supposed to be your safe tank to store cash in between the deals/investments you make outside your policy.

In general, the ideal funding ratio for a specially designed life insurance policy (IBC approved) is 33% base premium, to 67% PUA. This design gives you access to cash early, without compromising the ability for the policy to grow.

About Rodney Mogen