1 How to Become the Beneficiary of Your Life Insurance: A Key Strategy in Reaching Your Maximum Financial Potential Authored by Scott Jarred
2 According to Walt Disney, he could never convince the financiers that Disneyland was feasible, because dreams offer too little collateral. After failing to go about financing the creation of Disneyland in a traditional way, Disney decided that he would have to provide his own financing. Thankfully, he had an essential financial tool within his portfolio, without which Disneyland would not exist today: Whole life insurance 1 Walt Disney and his brother Roy quickly realized that they were never going to receive traditional financing for Disneyland; an immaculate amusement park with a family oriented theme and imaginative attractions. Being told time and time again by sources of traditional financing that Disneyland would be a financial disaster, sure to be closed and forgotten in the first year, Walt came to the realization that they would have to provide their own financing. Even after mortgaging nearly everything they owned and selling some of it, Disney still found himself falling financially short of starting Disneyland. So, he borrowed money from the cash value of his whole life insurance policy, which ended up being the largest source of funding for the creation of the world renowned theme park. 1 Walt Disney Wasn t the Only One Aside from Disneyland, there are a handful of other infamous brands that exist today which probably wouldn t have been possible if their creators hadn t owned whole life insurance. McDonald s While working as a milkshake machine distributor, Roy Kroc attempted to sell mixing machines to brothers Dick and Mac McDonald for them to use in their successful hamburger stand in San Bernadino, California. Once he learned that the McDonald brothers were interested in an international franchising operation, Kroc decided to partner with the brothers, opening his own McDonald s in Getting started proved to be a tough road, but luckily, Kroc had two whole life insurance policies which he borrowed from in order to overcome constant cash flow problems during the first eight years of attempting to take the franchise national. He also used the money from his policies to pay employees, as well as to help fund the advertising campaign around the infamous Ronald McDonald mascot. By 1961, Kroc was able to buy out the McDonald brothers. 1 JC Penny In 1898 James Cash Penny was working in a dry goods store that was part of a small chain. The partners who owned the chain approached Penny with a one-third partnership in the new store that would soon be opened. After opening two more stores, the original partners dissolved their business relationship, and Penny bought full stake in the stores. After operating 34 stores, he moved the company to Salt Lake City in 1913, and incorporated it as the JC Penny Company. By 1929, there were 1,400 stores across the country. The stock market crash of 1929 and the Great Depression that followed hit Penny s company hard. In order to offset the substantial financial set-backs, Penny borrowed from his whole life insurance policy and used the cash to meet payroll and operational needs. Using the cash value of his policy allowed for the JC Penny Company to stay afloat and to bounce back after the depression ended. Imagine if all of his money had been in the stock market
3 Pampered Chef The True Purpose of a Financial Plan Robert Castiglione, founder and chief executive of LEAP Systems and creator of the Lifetime Economic Acceleration Process (LEAP), gave a speech at the Million Dollar Round Table (MDRT) in 1987 titled Life Insurance: The Heart of Financial Consulting. Since then, the speech has turned into one of MDRT s best-sellers, and has been dubbed a must-listen for all people. 2 Doris Christopher started Pampered Chef in her Chicago home in 1980 by using $3,000 that she took out of her whole life insurance policy. By 2002, this seed money from the cash value of her policy had turned into a $700 million company. Warren Buffet s Berkshire Hathaway Corporation acquired Pampered Chef soon after for $1.5 billion, and today the company possess more than 12 million customers. 1 One of the major components of Castiglione s speech includes him discussing what the true purpose of a financial plan is; something that you probably think you know the answer to. However, most people, including financial advisors don t know the real answer to this question. For example, you may be thinking in your head that the main purpose of a financial plan is to increase your wealth, and ensure that you will have enough wealth in the future to comfortably live. This is probably what your financial advisor built your current plan around as well, because this is what tends to define traditional financial thinking today. Shouldn t your financial plan be capable of doing much more than this? The answer is yes. Beginning to get the point? What you should be taking away from this isn t a history lesson, but the realization that life insurance whole life insurance in particular is an essential part of a financial portfolio. This is because it isn t bound by market forces, but rather operates separate from it; almost against it. It can help offset the sometimes tumultuous market conditions that can restrict your other assets, allowing you to have the ability to still enjoy the financial independence you desire. Think of your financial portfolio as a movie cast: life insurance should be the main character, while the other elements play the supporting roles. Casting life insurance as the lead role can help you achieve something more than just your needs, goals, and even your dreams today. Owning a proper amount of whole life insurance along with your other assets can help you achieve your maximum financial potential. Castiglione offers a different definition for what your financial plan should seek to accomplish: The true purpose and sole objective of any financial plan is to maximize benefits and money supply simultaneously, without giving up one for the other, thereby allowing the individual to achieve their maximum financial potential Bob Castiglione. Life Insurance: The Heart of Financial Consulting. The Million Dollar Round Table
4 In other words, the core concept of any financial plan should be rooted in maximization. The driving force behind your financial plan should be you; the you that you want to become, the lifestyle you want to live, the business you want to start, the protection you want for your family. In order for these things to happen, your financial plan should be designed around the maximum potential formula. This provides a balanced foundation from which you can then build upon in order to reach your maximum financial potential: Maximum Potential = Maximum Benefits + Money Supply (MP = MB + MS) 2 Castiglione defines the components of this formula as follows: Maximum Potential becoming your optimal self, which is the sole objective of any financial plan Maximum Benefits the maximum amount of protection needed to protect your acquired wealth, income stream, loved ones, and your life Money Supply the amount of capital that you can potentially attain 2 More than likely, your current financial plan wasn t built from this balanced formula, because the majority of financial strategies being implemented today focus solely on either maximum benefits or money supply. But, how can you reach your maximum financial potential without an equal balance of both components? Unfortunately, violating this simple formula can significantly lower your chances of not only reaching your maximum financial potential, but achieving overall financial success. There s good news in all of this however, because there is a financial tool that offers the potential to maximize your benefits and money supply simultaneously. This specific financial tool can serve as the balanced foundation for which you can build the other elements of your financial portfolio around. What is this revolutionary foundation, capable of increasing your chances of reaching your maximum financial potential, you ask? Whole life insurance. The 9 Essential Elements of an Ideal Financial Plan 2 Think about your current financial plan for a moment. Is it operating under a balanced formula? What strategies are you implementing? What kinds of savings vehicles are you using? How s your rate of return doing? Do you have to hold your breath every time the stock market fluctuates? Is your current plan going to allow you to reach your maximum financial potential? Most of the time, these aren t questions that people frequently stop and ask themselves regarding their current financial plan. Like most people, the designing process of your financial plan may have played out similar to this: Cash Flow Guaranteed Return on Investment Liquidity Minimum Taxes Minimum Taxes on Wealth Distribution Ease of Wealth Distribution Maximum Protection from the Unknown Minimize Risk Flexibility Your advisor asked you how much money you will need for future financial occurrences, such as retirement or your child s college education. You then give him some answers based on what you think will be sufficient. Your advisor then does some mathematical calculations based on what you think you ll need in the future, how much money you have now, a rate of return based on your risk tolerance today, and how much money will need to be put into the plan to make up the deficiency. And there you have it; your yellow-brick road that leads to your future, which is sure to be an enchanting oasis of tranquility, peace of mind, and financial success. Unfortunately, what you may possibly find at the end of your journey from following this kind of a financial thinking can be a less than ideal future. This is because traditional financial planning techniques are meant to design plans around what 2. Bob Castiglione. Life Insurance: The Heart of Financial Consulting. The Million Dollar Round Table Bob Castiglione. Life Insurance: The Heart of Financial Consulting. The Million Dollar Round Table
5 you think you will need. They aren t designed around what you want from a financial plan. Through his research, Castiglione came up with nine elements that would comprise the ideal financial plan. 2 The elements that everyone would want in their plan, and sets this scenario: Suppose it was legislated by law that only one product can be used in your financial plan. Which one would you choose? Mutual funds? How about stocks or bonds? Maybe precious natural resources? Diamonds perhaps? Simply put, what would you choose to operate as your sole investment or savings vehicle? 2 While hypothetical, if you could only choose one financial tool to grow your wealth, let s see what elements comprise an ideal financial plan, and then find the one that satisfies all of them. CASH FLOW In any financial plan, there must be a mechanism in place that will allow for a systematic flow of money into the plan on a regular basis in order for it to be successful. GUARANTEED RETURN ON INVESTMENT Aside from simply depositing money into the vehicle that you choose, that money should produce a guaranteed and favorable return. MINIMUM TAXES As you are growing and acquiring your wealth, you should be able to avoid taxes as much as possible. Who doesn t want their money to grow tax-exempt or tax-deferred? MINIMUM TAXES ON WEALTH DISTRIBUTION Not only should you be able to avoid taxes on your money while it is accumulating, but you should also be able to avoid taxes on that money when you withdraw or distribute it. EASE OF WEALTH DISTRIBUTION Pulling money out of your 401(k) before you re told you can do so will cost you taxes and penalty fees. However, there shouldn t be any sort of hassle or penalty when trying to withdraw your money. It should end up in your hands, or your family s, relatively easy. MAXIMUM PROTECTION FROM THE UNKNOWN The only thing we know about the future is that it s unknown. Your financial plan should always contain the ability to react to any number of unforeseen life events, including death and disability. MINIMIZE RISK While it s not possible to avoid all risk completely, a skillful financial plan will seek to minimize risk as much as possible while still generating financial success. LIQUIDITY Your money should be available to you at any time, precisely when you need it. There are always going to be things that you need in the future that you are unaware of today. Therefore, your money shouldn t be locked up in things such as a 401(k). 2. Bob Castiglione. Life Insurance: The Heart of Financial Consulting. The Million Dollar Round Table FLEXIBILITY Any financial plan put in place for you should be able to change. Just as your life can change daily, your financial plan should be able to do so as well in order to successfully address these changes as they happen. Now, ask yourself these questions: Do you agree that these are characteristics that you would want in your financial plan? Would you also agree that a plan lacking one or more of these features would be less than ideal, if it s possible to have all of them?
6 Assuming your answer to both of these questions is yes (and why wouldn t it be?), find a financial tool that satisfies all of them. Having trouble? Here is a hint: Mutual funds, stocks, bonds, IRAs, and 401(k)s crumble when placed next to these features. The truth is, there is only one financial tool that exists today which, when placed next to these features, is capable of satisfying all of these elements. That tool is whole life insurance. 2 Why You Should Ignore the Financial Hype According to Castiglione, this is largely due to the fact that life insurance has been tainted by misguided and illogical selling systems. The traditional selling systems of the financial industry have caused you to view life insurance as a product, rather than a key player in your financial portfolio. Today, life insurance is being presented to you in a number of uncoordinated ways, those of which have been heavily perpetuated by the emergence of the financial personalities that adorn our televisions, radio stations, and book shelves today. Two of the most widely known financial personalities today include Suze Orman and Dave Ramsey, who both claim to be offering the latest and greatest in financial planning and consulting, including voicing their expertise on life insurance. But, there is still a major problem that exists when you listen to the financial gurus: The majority of them don t understand the formula needed for reaching your maximum financial potential, and therefore aren t providing you with the proper foundation for your financial plan. For example, Dave Ramsey is a huge supporter of buying term life insurance and investing the difference, 3 basing the foundation of his financial plans solely around seeking to increase money supply. Suze Orman recommends term life insurance because you only need life insurance in the event of your premature death, 4 basing the foundation of her financial plans solely around seeking to increase benefits. What Ramsey and Orman aren t telling you however, is that these strategies they perpetuate will more than likely never allow you to reach your full financial potential, because they are ignoring one side of the formula in both cases. Without seeking to maximize both sides of the formula, maximum financial potential cannot be achieved. What Owning Whole Life Insurance Can Do for Your Financial Well-Being Whole life insurance is probably one of the most complex and least understood financial tools in our world today. This lack of education doesn t just exist among you or your neighbor, but even the majority of today s financial advisors don t fully comprehend the numerous strengths it possesses and the economic benefits it s capable of producing. The problem with Dave Ramsey, Suze Orman, and traditional financial planning techniques in general, is that they are simply referring to life insurance as a product. None of the strategies being told to you by the traditional financial industry are properly educating you on what an important financial tool whole life insurance actually is. 2. Bob Castiglione. Life Insurance: The Heart of Financial Consulting. The Million Dollar Round Table
7 Say there are two people, who we ll refer to as Person A and Person B. Person A chooses to purchase a 20 year term life insurance policy, and when the guarantee period expires, they will then rely on a $1 million investment to help serve as cash flow (MP = MS + MB). Person B also has $1 million to invest, but chooses to have some of the money being saved into a whole life insurance policy that comes with a $1 million death benefit (MP = MS + MB). ASSUMPTIONS Study Period (in years): 20 Present Value Discount Rate: 0% SCENARIO #1 Asset Value: Rate of Return: 5% Tax Rate %: 25% SCENARIO #2 Asset Value: Rate of Return: 5% Tax Rate %: 25% Death Benefit: SCENARIO 2 YEAR ASSET VALUE $969,757 $938,002 $904,659 $869,649 $832,888 $794,289 $753,760 $711,205 $666,522 $619,605 $570,342 $518,616 $464,304 $407,276 $347,397 $284,524 $218,507 $149,189 $76,405 GROSS CASH FLOW 1 $80,225 TAX $12,500 $12,122 $11,725 $11,308 $10,871 $10,411 $9,929 $9,422 $8,890 $8,332 $7,745 $7,129 $6,483 $5,804 $5,091 $4,343 $3,557 $2,731 $1,865 $955 NET CASH FLOW 2 $67,743 $68,121 $68,518 $68,935 $69,372 $69,832 $70,314 $70,821 $71,353 $71,911 $72,498 $73,114 $73,760 $74,439 $75,152 $75,900 $76,686 $77,512 $78,378 $79,270 TOTALS $1,604,842 $151,213 $1,453,629 FINAL ASSET VALUE $969,757 $938,002 $904,659 $869,649 $832,888 $794,289 $753,760 $711,205 $666,522 $619,605 $570,342 $518,616 $464,304 $407,276 $347,397 $284,524 $218,507 $149,189 $76,405 $0 DEATH BENEFIT 3 LEGACY VALUE $1,969,757 $1,938,002 $1,904,659 $1,869,649 $1,832,888 $1,794,289 $1,753,760 $1,711,205 $1,666,522 $1,619,605 $1,570,342 $1,518,616 $1,464,304 $1,407,276 $1,347,397 $1,284,524 $1,218,507 $1,149,189 $1,076,405 SCENARIO 1 YEAR ASSET VALUE GROSS CASH FLOW TAX NET CASH FLOW LEGACY VALUE Summary CUM. DISTRIBUTION CASH FLOW Scenario #1: Scenario #2: Present Value to replace original capital would be FINAL LEGACY VALUES Scenario #1: Scenario #2: $750,000 $1,453,629 1 Gross Cash Flow assumes full amortization for entire study period. 2 Net Cash Flow assumes full basis for all assets. 3 Scenario 2 does not reflect premium costs (if any) that may be required to support the life insurance policy. TOTALS $250,000 $750,000 Values shown are not guaranteed to reflect values as of the date shown. Please carefully review the Disclosure page for important information concerning valuation and other matters. The Guardian Life Insurance Company of America (Guardian), New York, NY.
8 Wealth Distribution Scenarios involve hypothetical analysis of the impact upon cash flow when withdrawing funds from assets when the portfolio also includes permanent life insurance. It is intended to demonstrate the potential, hypothetical impact of permanent life insurance during retirement while an insured considers how and when to withdraw funds from assets other than permanent life insurance. The "Asset Value" can be adjusted up or down based on your own estimate as of the future value of those other assets at retirement. Cash flow values are end-of-year values. No general or specific investment advice, or tax or legal advice, is intended. Any rate of return entered into the calculator to project future values should be a reasonable average return for the period. Rates of return will vary over time, and generally the higher the rate of return the higher degree of risk. The analysis is a result of the information you have provided. Values are illustrative only and do not reflect actual taxes, expenses or costs. Dividends on insurance policies are neither estimated nor guaranteed. Actual dividends and returns on investment may be higher or lower than the results depicted in the hypothetical calculations. The Guardian Life Insurance Company of America, and its affiliates and subsidiaries (including Guardian Insurance & Annuity Company, Inc. and Park Avenue Securities LLC) are not responsible for the consequences of any decisions or actions taken in reliance upon or as a result of the information provided by these calculators. need the $1 million to remain in the investment, they can never enjoy spending down the principle of the asset. Because of this, their investment may not keep up with the world around them, unless they take unnecessarily high risk, the effects of which can be devastating. For Person B, let s refer to Scenario 2 in Figure 1 to see how their decision will play out. The Living Balance Sheet and the Living Balance Sheet Logo are registered service marks of the Guardian Life Insurance Company of America (Guardian), New York, NY. The graphics and text used herein are the exculsive property of Guardian and protected under U.S. and International copyright laws. Copyright The Guardian Life Insurance Company of America. According to Figure 1, you can see that both people are experiencing the same market conditions a 5% rate of return, and a 25% tax rate and that both have set a goal of having a $1 million legacy value at the end of 20 years. Annual Gross Cash Flow: Annual Tax Cost: Annual Net Cash Flow: $12,500 1 $67,743 2 For Person A, let s refer to Scenario 1 in Figure 1 to see how their decision will play out. Annual Gross Cash Flow: Legacy Value: 1 in year one, and then decreases every year after 2 in year one, and then increases every year after 3 in year one, and eventually decreases to $1,969,757 3 Annual Tax Cost: Annual Net Cash Flow: $12,500 $37,500 At the end of the 20 year period, Person B will have accrued the following: Legacy Value: Total Net Cash Flow: $1,453,629 At the end of the 20 year period, Person A will have accrued the following: Total Tax Cost: $151,213 Total Net Cash Flow: $750,000 Legacy Value: Total Tax Cost: Legacy Value: $250,000 There are two major problems here. First, Person A actually lost $1 million when their life insurance expired. Second, these values only hold true under the assumption that market conditions stay the same for 20 years; quite unlikely. Aside from that, their income is remaining stationary, so what happens when everything around them increases? What about inflation, an increase in taxes, fluctuations in return rates, and other numerous market conditions? Since they From this, we can see that Person B s investment is almost operating against the market. They are paying less in taxes, have the ability to offset inflation since their net cash flow increases annually, and don t have to rely on standard, market return rates in order to produce a high gross cash flow. Since they have the death benefit in conjunction with the value of the asset, they essentially have a legacy value of almost $2 million in the beginning. With their goal being to have $1 million in legacy value at the end of 20 years, this allows them to freely spend down the value of the asset, while also taking comfort in knowing that they, as well as their family, will always be protected.
9 Having the ability to spend down the asset causes a combination of things to occur: A higher gross cash flow: seeking to spend down the asset in 20 years means Person B can generate up annually in gross cash flow A decrease in annual tax cost: since the value of the asset dwindles every year, the value being produced by the rate of return also shrinks, resulting in Person B paying less in tax An increase in net cash flow: since their tax cost is decreasing every year, Person B will experience an annual increase in net cash flow, which at the end, almost equals the gross cash flow In comparison to Person A, Person B almost doubled their net cash flow, spent $100,000 less in tax, was able to freely enjoy the value of the asset, and still had $1 million in the end. Let s go back to the formula for maximum financial potential: Cash Value & Dividends = Money Supply. Death & Disability Benefits = Maximize Benefits. See how this unique combination, that only whole life insurance provides, satisfies the formula for reaching your maximum financial potential? The death benefit and cash value enjoy tax benefits. By Person B utilizing whole life insurance as a savings vehicle, their cash value grows tax-free, and even after the cash value exceeds the premiums that have been paid, their money still grows on a tax-deferred basis. Upon Person B s death, the total cash value of their policy no matter how much over the amount of total premiums paid and the death benefit will be inherited by their pre-selected beneficiaries on an income tax-free basis. 5 Refer back to the nine essential elements of the ideal financial plan. This first handful of characteristics just satisfied elements 1, 3, 4, 5, 6, and 7. And we re not even finished yet. While Person B is guaranteed the $1 million death benefit, their whole life policy includes a handful of other benefits capable of increasing that guaranteed legacy value exponentially: Whole life insurance provides cash value and a death benefit. Unlike term insurance, the death benefit associated with Person B s whole life policy will never disappear or dwindle. On top of that, their policy will also accrue cash value exempt from creditors providing the convenience of a liquid asset. This unique combination allows them to feel secure in knowing their loved ones will always be taken care of no matter what, and also allows them to experience living benefits. Aside from simply addressing their premature death, what if they become disabled (which is actually more likely to happen)? If Person B becomes disabled, their policy will continue to grow, retain the death benefit and cash value, and pay dividends Clifford P. Kitchen. The Whole Story of Whole Life. The Guardian Life Insurance Company of America. Copyright Clifford P. Kitchen. The Whole Story of Whole Life. The Guardian Life Insurance Company of America. Copyright
10 It functions as a revolving door. Person B s whole life policy contains the ability to pay them in the form of dividends, which they can then choose how to utilize. Most commonly, dividends are used to purchase Paid-Up Additions (PUAs), which at their most basic levels, function like mini whole life insurance policies. Every PUA purchased accrues a cash value and comes with a death benefit, which both enjoy the same tax benefits as the original whole life policy. Not only that, but these PUAs also earn their own dividends, which are paid to Person B. And here is the revolving door; a constant rotation of Person B putting money into the policy, the policy generating money, and then putting that money back into their hands, at which point they can either put it back into the policy, or liquidate the value and enjoy it. Since this effect allows for an increase in the cash value of the policy, it may eventually exceed their premiums. 5 What other kind of investment or savings vehicle not only pays you, but can actually pay for itself? Investment return rates struggle to keep up. Let s say that out of their $1 million, Person B was saving $11,290 annually into a whole life policy, and again was guaranteed a $1 million death benefit. Based on the current dividend scale, and including PUAs and the guaranteed cash value, that annual investment of $11,290 can grow into a combined death benefit of $3.2 million by the time they reach life expectancy. 6 Not only is this possible because of the revolving door effect that accompanies whole life, but also because inflation is the only factor that affects the cash value and the death benefit, which overtime, can actually be offset by the accumulation of PUAs. Since Person A used a traditional financial tool that is impacted by numerous uncontrollable economic forces, their investment comes with no guarantees, and more than likely will never achieve return rates high enough to match the return of Person B s whole life policy. For instance, if Person A were to invest the cost of the whole life premium ($11,290) annually, they would need a guaranteed before-tax return of 10.7% (7.49% after tax) throughout their lifetime, in order to produce the same amount of wealth that is capable of being produced from Person B s whole life policy. 6 Remember, the largest source of financial funding for Disneyland came from Walt Disney s whole life insurance policy. Imagine what the rate of return on his policy was. 5. Clifford P. Kitchen. The Whole Story of Whole Life. The Guardian Life Insurance Company of America. Copyright Buy Term and Invest The Difference: 3 Different Views. The Guardian Life Insurance Company of America. Copyright
11 Understanding the Role Life Insurance Plays in the Maximum Potential Formula Disney, Kroc, Penney and Christopher all had one thing in common: they wanted their success to be defined by them, and not something or someone else. They wanted to achieve more than what the traditional financial industry told them was possible; to be all that they could be. In order to do this, they had to implement a tool free of market constraint at the heart of their financial portfolio. It s not just successful people who understand the value of whole life either. You would be surprised to find out which segment of our economy understands the high economic value and multiple benefits of whole life insurance: Banks. Easily classified as one of the strongest, most compelling forces in the American economy today, they control everything; from how much you pay for a mortgage, credit cards, and even a car. Over the last 20 years, banks have begun buying whole life insurance aggressively, with most investing more in these policies than hard assets. In fact, it s common that up to 30% of a bank s Tier 1 capital the core measure of the bank s financial strength may be held in high cash value life insurance policies. 7 Five of the six largest banks in the world own significant amounts of whole life insurance: 7 Citigroup JP Morgan Chase Bank of America Royal Bank of Scotland American banks with substantial amounts of whole life insurance (to name a few): 7 Wells Fargo Bank of New York Fifth Third Bank PNC Bank Owning cash value life insurance policies allows banks to fund pension plans, supplement healthcare and other employee benefits, the ability to improve income statements, enjoy tax benefits, and to strengthen the overall financial stability of the bank. 7 So, if the strongest economic force in America is investing in whole life insurance, why then are you not being taught to store 30% of your Tier 1 capital in a protected, guaranteed financial tool? 7. Barry James Dyke. The Pirates of Manhattan: Systematically Plundering The American Consumer & How To Protect Against It. 555 Publishing Incorporated
12 Don t Fall Short of Your Maximum Potential: Be the Beneficiary of Your Life Insurance In his speech, Robert Castiglione makes the following statement: I didn t buy whole life insurance because I needed it. I bought it based on the maximum financial potential formula, because I want to be all that I can be in my lifetime. And if I don t make it, I want my family to be all they can be, even at my death. I would never want my family to remain at a standard of living of which they have become accustomed too, thereby foregoing the opportunity to grow and live life to the fullest like I want too. 2 This powerful statement perfectly highlights how implementing whole life insurance at the heart of your financial plan can help to ensure financial happiness, success, and most importantly, to help you and your family achieve more than just your needs, goals, and even what you dream is possible today. Instead of being shown in this light however, Castiglione recognizes that it s shown in the complete opposite way. He compares life insurance to how medicine is sold, stating that it s presented as a cure for a problem rather than a success tool. More specifically, traditional financial techniques position life insurance as a product that is solely meant to cure deficiencies, with the main deficiency being your premature death. 2 The ability to grow money that enjoys tax benefits Not worrying about market fluctuation Not having to take high risk in order to attain a high reward In other words, it will be more likely that you can enjoy a life of financial happiness, without the frustrations and surprises that you can find when relying on other investment vehicles. The world that we live in doesn t remain stationary, and even after you have left this life, the world won t remain stationary for your family. More than likely, the future will hold an increase in the cost of almost everything, meaning that your dollar today won t go as far tomorrow. We are entering an age of unlimited technological growth, with new gadgets, goods, and services being invented almost daily. Inventions you can t even fathom today are sure to be a part of your future. And it s safe to say that you as well as your family will want them. Aside from acquiring the things we want, the break-down of everyday objects is a guarantee, and we will have a need to replace them. Isn t there a better alternative? What if you stopped buying life insurance because you re going to die someday, and rather bought life insurance because you expect to live. Buying whole life insurance because you expect to live can do so much more for you financially, including: Protecting your loved ones Leaving behind a monetary legacy for your family Providing a permanent income stream Available funds to meet unknown future needs 2. Bob Castiglione. Life Insurance: The Heart of Financial Consulting. The Million Dollar Round Table Buy Term and Invest The Difference: 3 Different Views. The Guardian Life Insurance Company of America. Copyright
13 So, where will the money for these unknown occurrences come from? An unsecure, volatile investment vehicle? Or a protected, guaranteed investment vehicle? It s simple; there s no way to reach your maximum financial potential without rooting your financial strategy in a tool that is capable of both financial balance and maximum protection, while also allowing you to react to the changing world around you. The tool that is the most capable of not only laying the foundation for the ideal financial plan, but for also helping to ensure that you are capable of being all that you can be, is whole life insurance. The point of all of this is not to say that your financial portfolio can successfully operate with whole life insurance as its sole component. There are multiple financial products and tools available to you today, and you are not limited to employing just one in order to create a successful financial plan. The point of this is to say that even though there are multiple options for how to distribute your finances, this should not minimize or make life insurance a secondary option. It should no longer operate as an after thought like it tends to today, but rather should be one of the first financial tools you consider, acting as the foundation for your financial plan. It is from this unique synergy that is created by owning whole life insurance, in conjunction with your other assets, that the ability to reach your maximum financial potential is increased. Meet Scott Jarred Scott Jarred, CFP, is the CEO of Jarred Bunch Consulting, a personal and business consulting firm helping clients with risk management, investments, and asset protection. His mission is simple; to identify what his clients want, and provide them with the tools to achieve financial independence. Scott built Jarred Bunch with a client first philosophy, putting the dreams, goals, and values of the client at the heart of the financial models that he creates for them. Scott is also the creator of the My CFO Series. He designed this process to help empower clients by allowing them to understand what is being done on their behalf, and to provide them with the proper guidance in order for them to make the critical financial decisions in their own interest. By having this process focus on the strategic positioning and placement of his client s money, he has created an efficient, verifiable management process, rooted in helping people realize their full financial potential. Currently, Scott teaches a financial curriculum to resident doctors to help them succeed financially during and after their residency. Scott also works closely with medical professionals of all fields, business owners, professional athletes, and corporate executives. He currently lives in Indianapolis with his wife and three children, and splits his work between Jarred Bunch s Indianapolis and Tampa office locations Keystone Crossing Suite 450 Indianapolis, IN One Urban Centre, 4830 W Kennedy Blvd. Suite 450 Tampa, FL If you re ready to learn how employing whole life insurance as part of your financial strategy can help you reach your maximum financial potential, contact Jarred Bunch today. Scott Jarred is a Financial Advisor and Registered Representative of Park Avenue Securities LLC (PAS), 9000 Keystone Crossing, Ste 300, Indianapolis IN Securities products/services and advisory services offered through PAS, a Registered Broker-Dealer and Investment Advisor. Financial Representative, the Guardian Life Insurance Company of America, New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. Jarred Bunch Consulting LLS is not an affiliate or subsidiary or PAS or Guardian. PAS is a member of FINRA, SIPC. Scott Jarred is securities licensed, advisory licensed and insurance licensed in Indiana, Florida and other states. To find out if Scott is licensed in your state, please contact Kelley Roberts at *Neither Guardian or any of its subsidiaries, employees or agents provides tax or legal advice. Clients should consult with their own professional(s) to evaluate their individual circumstances.
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W hy do people buy annuities? It's a fundamental question every salesperson asks. In this chapter we'll explore various types of clients, their needs, financial objectives and other factors that go into
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Understanding Annuities Annuities issued by Pruco Life Insurance Company (in New York, issued by Pruco Life Insurance Company of New Jersey) and The Prudential Insurance Company of America. 0160994-00006-00
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The ABC s of Annuity Investing www.uiece.com 8213 352 nd Street East Eatonville, WA 98328 (253) 846-1155 2015 Introduction Introduction Welcome to the course This course is designed to provide information
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Life or Health Agents Only Annuity 4-Hour Course Online Study Book You Are On Page 1 Use Your Page Down Button To Start Reading The Book Click to Search or Ctrl + F Save This Book Exam / Submit Answers
PLAIN TALK about LIFE INSURANCE Having the right life insurance protection can have an enormous effect on your life and the lives of those you love. A proper financial security plan can mean the difference
Understanding Annuities Annuities ARE NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE IFS-A092313 Ed. 01/2005 Letter