IBC Global https://old.ibcglobalinc.com Infinite Banking Specialists Mon, 18 Jul 2022 18:59:52 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 https://old.ibcglobalinc.com/wp-content/uploads/2020/06/websitefavicon.png IBC Global https://old.ibcglobalinc.com 32 32 Policy Design -Knowledge Vault https://old.ibcglobalinc.com/policy-design-knowledge-vault/ https://old.ibcglobalinc.com/policy-design-knowledge-vault/#respond Thu, 14 Jul 2022 17:52:06 +0000 https://old.ibcglobalinc.com/?p=503004

Policy Design -Knowledge Vault

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Every individual is going to have different needs and abilities when it comes to a cash value policy. What many are not aware of is that one can choose where your money goes in a life insurance policy. You may direct dollars toward base premium (insurance expense) or a PUA Rider (cash dump-in). Money that is directed toward Base Premium first satisfies the Death Benefit and eventually builds cash value. Money that is directed toward the PUA Rider is allocated toward cash value and is available immediately. This also purchases us additional life insurance as well and is still classified as a “Premium” from the insurance industry standards
]]> https://old.ibcglobalinc.com/policy-design-knowledge-vault/feed/ 0 Direct vs Non-Direct Recognition https://old.ibcglobalinc.com/direct-vs-non-direct-recognition/ https://old.ibcglobalinc.com/direct-vs-non-direct-recognition/#respond Thu, 14 Jul 2022 16:00:43 +0000 https://old.ibcglobalinc.com/?p=502960

Non-Direct Recognition companies operate this way:

  • A Non-Direct Recognition company does not recognize that a loan has been taken and will credit the current dividend rate to any money that is in a policy’s cash value AND outstanding in loans (amazing, but true). Here is an example:
  1. Cash Value: $100,000
  2. Dividend: 6.00%
  3. Loan Rate: 5%
  4. Cash Value: $50,000
  5. Dividend Credit to unborrowed funds: 6.00%
  6. Loan Balance: $50,000
  7. Dividend Credited to borrowed funds: 6.00%

Direct Recognition companies operate this way:

Direct Recognition companies operate this way:

    • A Direct Recognition company will recognize that you have pulled a loan and adjust the dividend credited to borrowed funds. This is often labeled as “bad” by many agents that prefer Non-Direct Recognition companies. It is important to study the individual insurance company’s loan treatment. It is not uncommon for an insurance company to lower, or raise, the dividend rate on borrowed funds. This functions very similarly to a Non-Direct Recognition company/policy. Here is an example:
  1. Cash Value: $100,000
  2. Dividend: 5.65%
  3. Loan Rate: 6%
  4. Cash Value: $50,000
  5. Dividend Credit to unborrowed funds: 5.65%
  6. Loan Balance: $50,000
  7. Dividend Credited to borrowed funds: 5.65%
]]> https://old.ibcglobalinc.com/direct-vs-non-direct-recognition/feed/ 0 Current Policy Update https://old.ibcglobalinc.com/current-policy-update/ https://old.ibcglobalinc.com/current-policy-update/#respond Thu, 14 Jul 2022 15:14:58 +0000 https://old.ibcglobalinc.com/?p=503000

Current Policy Update

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Let our expert designers analyze your existing policy to see if you are set up for maximum cash value growth!

  • Upload pages of your policy
  • Our Innovative Life Insurance Specialists will carefully analyze and rate the cash producing power of your policy
  • You will receive a detailed analysis confirming that you are on the right track, or we will give you our expert recommendations on improvements needed to fully maximize your cash growth.

HERE IS HOW IT WORKS: SIMPLY UPLOAD THE MAIN PAGES OF YOUR POLICY, AND ONE OF OUR INNOVATIVE LIFE INSURANCE SPECIALISTS WILL OPTIMIZE IT FOR MAXIMUM CASH GROWTH AND THEN EXPLAIN ALL THE IMPROVEMENTS TO YOU – AT NO COST!

]]> https://old.ibcglobalinc.com/current-policy-update/feed/ 0 Can it be completely tax free? https://old.ibcglobalinc.com/can-it-be-completely-tax-free/ https://old.ibcglobalinc.com/can-it-be-completely-tax-free/#respond Thu, 14 Jul 2022 14:57:27 +0000 https://old.ibcglobalinc.com/?p=502957

It definitely CAN be! As long as the policy is set up correctly and everything is done properly, you can absolutely avoid paying any taxes. However, it is possible to trigger a taxable event.

There are 2 taxable events to avoid:

  • Triggering a MEC / exceeding the IRS’s limit on the total amount you can put into a policy annually
  • If this does occur, the policy will act very similarly to a 401K. The cash grows tax-deferred, but if you take any cash out, you will have to pay income tax and a penalty tax of 10% if you are under 59-½ years old, on any dividends you’ve earned.
  • Having a policy lapse or cashing out
  • If you loan out too much of the cash and the policy lapses, or you are done with the policy and you take out 100% of the cash value, you would receive a 1099 and the amount of interest earned throughout the policy will be taxed as regular income.
]]> https://old.ibcglobalinc.com/can-it-be-completely-tax-free/feed/ 0 All About The MEC https://old.ibcglobalinc.com/all-about-the-mec/ Wed, 13 Jul 2022 20:04:41 +0000 https://old.ibcglobalinc.com/?p=502956

MEC Limit: The MEC Limit is the maximum amount of money you may deposit to a policy per year. This is an IRS limit. If we exceed this limit, our policy becomes classified as a MEC, and we have to deal with taxes. Did you know that you can set the MEC limit wherever you want? Below are a few bullet points that you may find helpful:

– The MEC Limit directly relates to your Age, Death Benefit, Gender, and Guaranteed Rate on a policy.

– Another name for the MEC Limit is the “7-Pay Premium test”. This has to do with the first seven years of a life insurance policy. If you have a $10,000 MEC limit policy, the maximum amount you can pay each year is $10,000 for the first seven years. Beginning year 8, the MEC limit will reset. The limit resets based on your age, death benefit, and cash value at the time.

– If you don’t use it, you don’t lose it. Any unused MEC space will roll over year-to-year. For example, if you have a $10,000 MEC Limit, you can pay $10,000 per year. If you pay $5,000 in year 1, you can pay $15,000 in year 2 to make up for the $5,000 you did not pay in the first year. Unused MEC space will continue to roll over as the years pass.

– What if you exceed your MEC limit? Not to worry. If you exceed your MEC limit, it is straightforward to reverse. Insurance companies will notify us, and we quickly reverse it.

  • Definition:

A MEC, or Modified Endowment Contract, is a policy in which the premiums paid have exceeded the amount allowed to keep the full tax treatment of a cash value life insurance policy. Distributions of cash value are taken from taxable gains first, as compared to distributions taken from non-taxable contribution. In other words, withdrawals will typically be taxed as ordinary income (typically the highest rates for investments), instead of treated as non-taxable income.

  • History of the MEC:

Modified endowments were created in the Technical Corrections Act of 1988 in response to single-premium life (endowments) being used as tax shelters. This established the 7-Pay Test, which is a stipulated premium that would create a guaranteed paid-up policy within 7 years from policy inception. If premiums paid to the contract go beyond the premium amount stipulated, then the contract has failed the 7-Pay Test and is reclassified as a Modified Endowment Contract.

  • Tax rules:

Distributions will switch from a First-In, First-Out (FIFO) basis to a Last-In, First-Out (LIFO) basis. For example, if you contribute $100,000 into a policy and have $150,000 in cash value, you will be taxed on the $50,000 gain first.

Policy loans will be realized as ordinary income to the policy owner and could be subject to income taxes in the year the loan is made. Distributions (either withdrawals or loans) that go beyond the policy basis will be subject to a 10% penalty tax for policy owners under the age of 59-1/2.

Transferring funds from a Modified Endowment Contract to a new life insurance policy via the 1035 exchange privilege will render the newly issued contract as a Modified Endowment Contract as well.

Source: https://en.wikipedia.org/wiki/Modified_endowment_contract

CLICK HERE for More Videos on the MEC Limit
]]> Why doesn’t everyone do this? https://old.ibcglobalinc.com/why-doesnt-everyone-do-this/ Wed, 13 Jul 2022 18:35:51 +0000 https://old.ibcglobalinc.com/?p=502978
  • Most of the time, it is probably because people just don’t know about it!
  • Life insurance agents need to know how to properly set up a policy to make the IBC work most effectively.
  • Agents also need to be willing to set the policies up properly. High cash value life insurance policies will end up having more money going into cash and less going into insurance premiums. Agents get much higher commissions on money going into the premiums. So agents need to be willing to “give up” a higher initial commission in order to design a policy that will give the client more cash upfront.
  • This might not initially sound lucrative to agents who think they have to do some more work explaining how this concept works to clients and then get a significantly smaller commission from each case. However, putting the needs and interests of clients first is not only doing the right thing but also generating quality business and clients who will be more willing to trust the agent and stay with them for the life of the policies.
  • Similar to many people simply not knowing about the concept, there are those who do, but have not been educated on it and how to use it properly and effectively.
     
]]> Whole Life Insurance vs. Stock Market https://old.ibcglobalinc.com/whole-life-insurance-vs-stock-market/ Wed, 13 Jul 2022 18:35:51 +0000 https://old.ibcglobalinc.com/?p=502976
]]> Where can I get 3%-6% without risk? https://old.ibcglobalinc.com/where-can-i-get-3-6-without-risk/ Wed, 13 Jul 2022 18:35:51 +0000 https://old.ibcglobalinc.com/?p=502975
  • A properly designed cash value life insurance policy with one of the 4 Major Mutual companies! It’s safe, tax-free, liquid, and a fixed asset. Of course, this is not the only place you can get this kind of return. We don’t believe this is the only place you should put your money!
  • Owning a business
  • Dividend-paying stocks
  • Real estate investing
  • Roth account or 401K
]]> When can I take out a loan? https://old.ibcglobalinc.com/when-can-i-take-out-a-loan/ Wed, 13 Jul 2022 18:35:51 +0000 https://old.ibcglobalinc.com/?p=502974
]]> What is a PUA, or paid up additions rider? https://old.ibcglobalinc.com/what-is-a-pua/ Wed, 13 Jul 2022 18:35:51 +0000 https://old.ibcglobalinc.com/?p=502972

First, it’s the most important piece of making a High Cash Value Life Insurance actually work!

Any money that goes into this Paid-Up Additions Rider is money that is going into cash, not an insurance expense. These are the dollars that will begin earning interest immediately and that you have access to any time. That’s why corporations stuff as much money as they can into the PUA rider!

Why is it called “Paid-Up Additions?” It is additional in that, as a policyholder, you are billed for your insurance premium per year, but you are not billed for a PUA contribution. It is optional to pay into, and you can adjust how much you contribute to it. Technically, money put into this rider also buys you some life insurance as well. That extra life insurance is “paid-up” because there is no recurring premium for that particular amount of insurance.

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