What is one of the best feelings in the world? Being debt free!
Traditionally life insurance is used to pass a tax-free legacy to heirs, but did you know that life insurance can be used for a multitude of things including getting out of debt? As we prepare for Life Insurance Awareness Month (LIAM) consider promoting life insurance as an option to pay off debt.
For many of us, it feels like an unattainable goal. How can we get out of debt when we have credit cards, car and student loans, a mortgage on the house, not to mention trying to save for retirement?
Asset has recently partnered with “Your Family Bank” (YFB) to give you access to a get-out-of-debt program that, regardless of age, gives you the opportunity to do the following for your clients:
- Shows them how to be debt-free in 10 years or less without spending any additional money.
- Creates wealth on any income level without increasing risk.
- Teaches them how to NOT outlive their money.
- Gives them the opportunity to eliminate tens of thousands of dollars of debt.
- Reveals how banks leverage money.
- Explains why investing in the stock market isn’t for everyone.
- Lays out a plan to retire wealthy with tax-free income.
To understand how YFB works you first need to understand how people spend money.
There are two types:
- Savers – If they want a car they save until they can buy it. However immediately after their purchase their savings account is back to “0”. The end result is they lose the opportunity to earn interest.
- Spenders – WANT IT NOW, so they borrow to buy the car and are now in debt which they will pay off over time. At the end they will owe no money but their savings account is also “0” and they have paid a substantial amount of interest.
One of the key elements of the YFB process is to educate people how to change their financial condition by altering their spending habits. The YFB software gives you a step-by-step process which allows you to help clients reap the multiple benefits of this program.
- STEP 1: Get dollars to do double duty by utilizing a safe financial product that can accept funds, provide a guaranteed rate of return and can be used to pay the bills. The product of choice is Whole Life Insurance.
- STEP 2: Find dollars that can be repositioned to fund the policy, such as 401(k)/IRA contributions.
- STEP 3: Find dollars that are not being used efficiently. Examples are payments in excess of minimum required interest on credit cards or an extra house payment, which seems counter intuitive, but is explained below.
- STEP 4: List all debt from smallest balance to largest.
- STEP 5: Using the YFB financial questionnaire, generate a “Debt Free Roadmap”
- STEP 6: Follow the “Debt Free Roadmap” to determine when to start paying off the various debts.
So you may be asking yourself, “Where does life insurance enter the process?”
Using a combination of Whole Life insurance and a safe, liquid savings vehicle you make minimum payments on all credit card debt and fund the insurance and savings vehicle with the repositioned dollars and amounts over the minimum payments. Using the cash value growth in the policy + the savings vehicle funds, you continue to pay off debt as outlined in your “Debt Free Roadmap” and also pay off the insurance policy loans. As each debt gets paid off, that minimum payment is added to the amount you are paying into the insurance and savings vehicles creating a “snowball effect” allowing you to pay off debt and get internal policy growth.
The beauty of this program is that ALL THE MONEY CLIENTS WOULD HAVE PAID TO BANKS IN INTEREST AND PRINCIPAL WITH NOTHING TO SHOW FOR IT IS NOW HELD BY THEM IN THEIR POLICY AND SAVINGS VEHICLE.
This phenomenal approach to debt repayment can get you in front of a demographic today that will become your retirement clients of the future.
To get more information about this concept, see detailed examples, and learn how to get enrolled, set a time to talk to Jeff Stemler, SVP Advanced Planning by calling 888-303-8755 x2126.