Repaying the insurance policy back.
When you are a Participating Owner you are part owner in that company and so there are some additional benefits. You participate in the overall profitability of that large money pool that’s being managed on your behalf, and on the behalf of all par owners. You get to participate in the divisible surplus on an annual basis. Over time these dividends when put back towards your policy as s paid up insurance can create a perfect uninterrupted compounding effect and the dividends can become enormous. THey help you accumulate an ever growing pool of cash value to use while you are alive.
Unfortunately…sooner or later somebody dies. In which case the death benefit comes in and it pays off any outstanding policy loan. This means that lien is actually placed on the death benefit. So if there’s a death claim, the money comes out tax free, it pays off any outstanding indebtedness to the insurance company plus any outstanding interest that has accrued goes back to the life company for the benefit of each and every Participating Owner. These policy loans and the interest earnings are one of the investments that the money pool makes on behalf of all owners. It can help to stabilize long term dividends to each owner. The remainder of the death benefit goes tax free to the beneficiaries that the policy owner chooses.
It’s a very seamless method of allowing you to live your life insurance. So you can actually utilize it while you’re alive to accumulate other assets and have financial peace of mind. It's an extremely liberating way of incorporating a lifetime financing mechanism by using this cash value. Then also being able to leave a true legacy behind thanks to the tax free payout.You had access to acquire every major purchase you were planning to make during life and a tax free windfall that comes in to solve many of the financial and even emotional problems that arise when someone passes away. This method of using your cash value savings as a self financing option provides the most amount of control, and for many provides the best growth potential on your existing capital.
This borrowing from life insurance is a very efficient way for you to practice the concept of becoming your own banker. In essence, it is how we choose to go out and purchase and finance the things that we do in life already. Nelson Nash clearly isolates in his teachings is that by paying cash, you’re still making a financing decision.You’re borrowing from your future growth potential. So when we utilize the policy cash value asset instead for this purpose, we are creating an environment where you never give up the compound potential of your money ever again.