Today we’re joined again by Dave Befort, our insurance expert, to talk specifically about some of the benefits that new Delta pilots are being offered in their new contract. This show isn’t exclusive to Delta pilots so there will be information that every pilot can benefit from, but we want to focus on the Group Variable Universal Life (GVUL) insurance option being offered.
Subscribe On Your Favorite App:
More About This Episode:
The goal for the show today is to provide you with a broad picture of being offered and share some things from our research that Delta pilots should be aware of and think through. Plus, we’ll offer some alternative options to this GVUL policy for pilots looking for a safe asset. If you’re just looking for a quick cliff notes version of what we discuss, skip to the final few minutes to hear us summarize all of our thoughts.
Also, make sure you check out this sequence of returns explanation Ryan recorded to understand this risk.
0:00 – Intro
2:15 – What is this new policy and what is it replacing?
4:50 – The difference between term life and permanent life?
7:38 – 3 reasons why a Delta pilot might want to do this.
12:42 – The cons for this specific GVUL option that you need to be aware of.
21:52 – What could cause a policy like this blow up?
23:59 – Alternative options
33:02 – Structuring the policy for someone that isn’t concerned about the death benefit.
Learn more about Dave: https://maxperformancefinancial.com/about/
Listen to the Engage podcast episode explaining the Delta GVUL: https://podcasts.apple.com/us/podcast/e38-gvul-what-pilots-need-to-know-about-the-new-group/id1603494388?i=1000632594462
Retire Pilots – https://retirepilots.com
Get your FREE Retirement Toolkit – https://bit.ly/3ZmZsaX
Pilot Tax – https://pilot-tax.com/
The Pilot’s Advisor Podcast is also on video. Watch & Subscribe on YouTube: https://bit.ly/3EIEBW2
(Note, this is an automated transcription. Please forgive any errors.)
Ryan Fleming 01:11
Welcome to another edition of the pilots advisor and today’s episode, we have our resident expert insurance guy Dave Baffert from max performance. And also today’s show is for Delta pilots. We want to all our pilot clients to listen to this, but this is specifically an episode talking about some of the benefits that new delta pilots are being offered as their new contract. If you guys haven’t listened to Episode 38 on being so rude, hold on, Dave. Good morning. How are you?
Dave Befort 01:40
Good morning, man. I’m good. I’m good.
Ryan Fleming 01:43
I’m good, sir. The Air Force Academy Falcons are eight No, what
Dave Befort 01:46
do you think about that? Yeah. still undefeated? Hmm.
Ryan Fleming 01:49
Wow. Or is it seven? And oh, do I have that wrong?
Dave Befort 01:52
Yeah, I don’t know. The season moves too fast. We’re already like, what, eight weeks into the season? And? Yeah.
Ryan Fleming 01:59
All I know is we have army next week for the commander in chief trophy. So I’m probably going to go to that game. I haven’t been to a game yet this year. So I’ll probably probably had that. But not to digress on that point. But we have a very important episode today. We were going to talk about the GPU l that’s been offered at Delta. And you’ve had time to do a little research on your end, listen to the podcast that an engaged put out for Delta pilots, right?
Dave Befort 02:25
Yeah. Yeah, that was great. I’ve got a lot of Delta clients who have reached out to me in the last month or so saying, hey, Delta has got this new thing going on with Universal Life. What do you think of it? And I think all of my clients understand, you know, what part of that they’re going to use and what part they won’t. But I thought this would be really helpful for a lot of people, because this is a, it’s a very confusing topic, when you get into universal life insurance, different types of life insurance. So we’ll try to use this episode, you know, on the Delta podcast, they obviously had people from MetLife, talking about that product and promoting it, which is what they get paid to do. And they shouldn’t be doing that, we will point out some things from my research, that that delta pilots should just be aware of some things to think of, and then maybe some alternatives. So you know, I think you and I both know, in our mind a better alternative if if you’re looking for a safe asset, you know, a safe place to grow, guaranteed cash, and keep a permanent death benefit. So
Ryan Fleming 03:33
yeah, absolutely. And one of the one of the things, I think it’s going to be pretty, I’ll say, Cool, I don’t know if I’m allowed to say that. But Dave, and I have not talked about this issue specifically. So we’re actually going to talk about it with our separate research today in front of you. And we’re also going to link the podcast for the Delta Senate to Delta MEC sent out to all you guys, because of course, I have the exact same issue. I have a lot of my delta pilot clients that are asking about this. And so what we want to do is paint a, you know, a broad picture of what it is, what its benefits are, whether or not we think you should opt into it or not. And then also some alternatives. Because there’s very, there’s a lot of a lot that goes into it a lot of different issues. So what that what it is, is a variable universal life insurance contract to take the place of a simple term insurance contract that they originally had. And once again, delta is paving the way in the industry for the amount that they’re giving each one of their pilots well over $1.1 million, which far exceeds that of FedEx and other carriers at this point in time. So we’ll, we’ll put that out there. But thank you for paving the way Delta. But Dave, I think it’s important for us to talk about exactly what a variable universal life insurance contract is versus a fixed per se, and just get it out there. So people understand the difference between a term which is permanent life or excuse me term, which is a term limited life insurance and then permanent life insurance. Can you break that down for us?
Dave Befort 05:00
Yeah, it’s pretty easy. There’s two types of life insurance, there’s term insurance, and there’s permanent term being exactly what it sounds like. It’s a 10, year, 20 year, 30 year term at the end of that term, it expires, you know, the only way to win in that game is to die early, you know, so you can cash out on that term. But yeah, once you hit typically 65 years old, that term expires. And definitely when you leave a company, it’s gone. And you’re left with with no insurance. permanent insurance, on the other hand, is just that it’s designed to be to be there permanently to last one day longer than you. So universal life falls into the category of permanent insurance, although I would put an asterisk next to that. And I’ll discuss why, why it may not really be permanent.
Ryan Fleming 05:46
So you’d agree, I think when I think about insurance, having permanent life insurance is the way you want to go. Because every day that we age on this Earth, our body starts falling apart more and more. And sadly, we’re not young bucks anymore. And our ability to get insurance is less and less as we continue to go down this path. And it’s probably very prudent for an individual to get permanent life insurance to protect their family, not only for today, in their working years, but also to protect their legacy for later on. Would you agree?
Dave Befort 06:16
Yeah, absolutely. You know, we insure everything else we own, we insure our cars, our homes, we insure private property, jewelry, things like that. But we so many people neglect to insure the one thing that makes all of that possible, which is you. And the one thing you’re guaranteed to come out on top of you’re guaranteed to die. So it’s guaranteed that if you have this permanent life insurance, it’s going to pay out. So your family is going to recoup everything at a multiple of what you’ve ever put in on a tax free basis at some point in the future.
Ryan Fleming 06:55
Well, I want to give kudos to delta for actually putting this option on the table that I don’t think any other airline has at this point. And after listening to the podcast, on my own, what I’ve come up with is that I do think it’s actually beneficial, because of the portability because of the tax advantages, I would probably opt into it versus the term. However, I would do it on a limited basis because of some of the problems I see with the investment side of it. Also, I would like you to bring up and talk to me because I think I know, but you’ve been the insurance expert here. What are the problems with variable universal life versus a guaranteed universal life? So what is the variable give us the option? But what’s the problem with it?
Dave Befort 07:38
Yeah, well, let me let me back up a little bit. And I’ll definitely run through some pros and cons of this. But it might help if we, if we speak speaking to the audience that’s looking at this as hey, is this something I should do? I’d say there’s probably three reasons why a Delta pilot might want to do this or why it appeals to any delta pilot, one would be lower imputed income, which just means pay for the same amount of coverage that in life insurance, delta is going to be paying less for it. So that amount that delta pays ends up as part of your reportable income, even though you didn’t receive that cash, you receive the benefit. So you’re gonna pay less and imputed income. So I think it’s a good deal for the death benefit piece of it while you’re actively flying with Delta. The next reason a pilot might be interested is the permanent life insurance, right? You can take it with you when you leave. And then third, they promote this cash value account with the tax advantages. So those are the three reasons and we’ll go through there, like I already said, and Ryan and I already agreed the first reason for the same coverage, lower imputed income, it makes sense, do it, why wouldn’t you? Right? But let’s talk, you know, well, we’ll mention the other two reasons that I mentioned there on on maybe a different way, or some things to think about, and then maybe a better way to accomplish that. That’s the same goal is there in a safer, more guaranteed way. So universal life insurance. I think the the guy, the MetLife guy on the podcast said mentioned it was around in the 50s and 60s, that’s actually not the case. The Universal Life was invented in 1979, became popularized in the 80s by a company named EF Hutton. They used to have a commercial when EF Hutton talks, everybody listens, you have put and doesn’t even exist anymore. So there you go. But universal life insurance was created, really because that was what else came out in in 1979. The 401k So that’s when Americans are starting to realize hey, we can invest on the stock market on our own and they have 401 K’s. So, you know, which is much sexier than life insurance. So universal life insurance was kind of created as a way to you know, they were losing a lot of business to the stock market. people finding their 401 K’s. So they said, Hey, you can do a stock market over here too. So they combine life insurance with the stock market to make it sexier and more appealing, maybe more upside for people. So it was it’s touted as permanent life insurance, meaning it’ll last one day longer than you, as long as you continue making those premium payments every single day, until I think at least age 95 For this policy. So some of the pros to universal life insurance or this plan with delta is like we just mentioned the same insurance coverage for less imputed income. And then a lot of the, the benefits that they promote for this product is that you can find also a side account a cash value account, right, which you can use to either gain a small guaranteed interest on that account, or put it in the market and try to get bigger gains on there. And the benefit to that is that they get to add what they put over there, and that account to what delta pays. And that becomes their cost basis. Which means whenever they want to take money out of that cash value account, they can take withdraw that cash all the way up to the cost basis. tax free. Right. So well, we’ll talk a little bit about withdrawals versus loans, which in my opinion, loans are a much better way to grow your wealth than just withdrawing that cash value. So I guess those would be the pros. Now let’s talk some things that everybody should probably know about universal life insurance before they dive into this and start putting their own money into it. Right, so my, my first question is, why would you ever mix insurance with investing? To me? They’re two completely separate things. Insurance is, is guarantees, insurance needs to be there when you need it. Right? Not if you need it, by mixing that with investing, you’re really taken on a lot of risk in this kind of plan. Because with investing, there are no guarantees, right? We know what, you know, the way you invest the market trends upwards. Right. But at the time that you actually need that money, that cash value account to help pay your premium later in life. It may be down, right, so there’s no guarantees involved. You know, investing involves risk risk is probability of loss. That’s just the facts. There’s their savings. And there’s investing, there are two different things. And I would never combine the two personally.
Ryan Fleming 12:42
You know, we’ve talked about this at great length, in different different times different podcasts. But when I think about the insurance, I think about it as the fixed income portion of my portfolio, and I want those guarantees to lower my overall standard deviation. So when I think about MIT, you know, many of the pilots here have 401 ks Delta’s putting in B fund contributions, no matter what, they’re going to have plenty of exposure to the market. And so when I look at this plan, I wouldn’t want to have any of that variable option or that that money invested in the market, especially because of the fees that they’re being charged upfront. And also having some guarantees with insurance. Just because the cost of insurance continues to increase. And I knew I know, I threw a lot at you. But that’s why I have you to dissect this and make it all organized. For all our listeners.
Dave Befort 13:33
Yeah, well, let’s break that down what you just said. And I completely agree, you got your fixed income and you got your, you know, your your growth income, right, your fixed income, you need to be guaranteed that it’s gonna be there someday, when you need it, your growth, you’re putting some of that at risk, you know, taking a little higher risk for a higher return. Right. Now, you’d mentioned fees. So one of the big, one of the big downsides to this any money you put over into that cash value account with this plan, they take 2.25% right off the top. So you put $100 in and they don’t they don’t hide this, they expressed this on that podcast. So kudos to them. They’re not trying to hide anything there. But you put $100 over here and this account $2.25 immediately goes to them, you’re left with now investing $97.75. So does that mean you just need to make up 2.25% To get back to 100? No, it doesn’t actually you need to make up 2.3% Just get back to 100. Now. So when you do the math, let’s do bigger numbers. Say it costs 50% of a charge. So 100 minus 50 is 50. Right? So if you lose 50% Now, you have to make just 50% to get back to 100 100%. You need to make 100% Now to get back to 100 Right. So be careful with that, you know, your your. So you need to make up more than 2.25%, just to break even. And anything you make in gains is actually deferred is tax deferred. So now not only did you lose that two and a quarter percent, but the next 2.3% that you had to earn to get back to a hole to where you should have been, is all taxable at some point in the future. Right. So that that right there is a big, kind of a big con to me, is that giant chunk right off the top.
Ryan Fleming 15:34
And my understanding of this because this plan doesn’t have other options, besides what delta was paying any money that they would actually put into the cash balance plan, or the investment side of this would all be after tax income as well. Correct.
Dave Befort 15:51
So this would be Yeah, it’s all after tax income that goes into life insurance.
Ryan Fleming 15:56
Exactly. So. So it’s after tax income, where you’ve already paid on that. And then to put money into this from the investment side, you’re gonna pay a 2.25% fee to get the money in there, which you know, as an investment advisor, I would look at that and go, Wow, that’s that’s a big fee. Especially if you’re like, hey, I want this to be safe money. I’m going to take the 4% Guaranteed Well, guess what, you just ended up most of that. Just by the fee alone.
Dave Befort 16:22
Right? Yeah. And I don’t even know I want to say they said their guaranteed fun was like 1.5%. Don’t quote me on that. Go back and listen to that podcast. But so it’s a little tough to make up. You know what, for all your pain at fees, even with the guaranteed growth on that cash.
Walter Storholt 16:43
Attention aviators, when you’ve spent years in the cockpit managing the complexities of flight isn’t a time you navigated your retirement with the same precision introducing, retire pilots.com right at your touchdown zone on our homepage, there’s a beacon flashing, get my free toolkit, click and you’ll be cleared for a direct route to the pilots advisor retirement Toolkit, which is tailor made for pilots like you. Inside you’ll find two important books, the pilots advisor and pilots retire early, decipher the nine critical decisions when retiring before 65. And discover the seven lessons to help pilots land safely in retirement. But that’s not all. This free toolkit is packed with altitude high value, including extra us to get your retirement plans off the runway. When you order this free toolkit, you’ll receive crucial tax planning information. You’ll also discover ways to light the afterburners on your 401 K. And you’ll even earn a free portfolio analysis. So captains and First Officers, don’t let turbulence disrupt your golden years, start your descent to a clear, comfortable retirement vector on over to retire pilots.com to grab your free pilot’s advisor retirement toolkit. And let’s embark on this journey together. Retire pilots.com.
Ryan Fleming 18:08
So, I think what was the path we’ve gone down just to clarify, I think this is a very good thing for Delta pilots, I would absolutely take it for the reason that you the reasons that you brought up, but I don’t think I would put any money into the investment side of it. And I’d probably do it another way. Like if I really liked the idea of insurance, I would probably put it into something else doing something almost the exact same way, but take away the fees and get some guarantees. Would you agree with that?
Dave Befort 18:37
Absolutely. And and let’s get into that right after a few more cons that I want to really foot Stompers that I need Delta pilots need to be aware of before they go into this. And then yes, what you just said, there’s a better way to do that. So option number one, do it for the lower imputed income, option. Two and Three, the reasons you might want to do it for the permanent life insurance and the cash value account, there’s a better way to do that. Let me hit on a couple more notes right here. There’s their you know, they mentioned, hey, you can you can take those withdrawals up to your bases without being taxed. But you can always access cash value in any life insurance policy, completely tax free through the loan feature. And that’s how I would recommend utilizing that cash value anyways, through a loan feature and we’ll talk more about that. Be beware when you take this policy with you, at say at 65. You got to understand how universal life insurance is built. It’s built on the chassis of one year annual renewable term insurance. So term insurance cheap, right? At your age, say at 45 years old. Yeah, you can get a million bucks a term insurance for maybe 1000 bucks a year. Probably less. You know if you shop around when you’re 65 years old. How do you think the premium has changed on a million dollars of insurance? It’s, it’s gone up by a multiple. So what I’m saying is every year you get older, with these universal life policies, the insurance becomes more and more expensive. When you’re 70 years old, nobody. And I mean, nobody is writing that check to the insurance company saying, Yep, keep that million dollars in force for me, here’s your 1020 or $30,000, whatever the premium is, at that time, nobody’s writing that check. The whole premise behind this, this separate cash value account is that how your cash value should be growing enough so that when that premium increases dramatically in your later years, your cash value has enough money to just grab from that and pay your premium for you? Well, then really all you’re doing is kind of putting insurance on a layaway plan, right? You’re putting money in now, and it’s going to take it later, to pay the premium. It doesn’t make a whole lot of sense to me. So big rising cost of insurance as you get older, and probably nobody’s going to want to start paying that on their own. After they leave Delta. There is some fine print to be aware of on that website. So if delta ever cancels this plan, say you’re 45 right now, you know, do you think Delta might cancel or change this plan in the next 40 years? It’s possible, and if they do, your policy could be cancelled. So that’s right there in the fine print of Delta ever changes, then your policy is at risk of being lost? Bottom line with this stuff, it’s not a safe money asset that I know you don’t endorse Ryan and I don’t endorse either your cash value is subject to market risk. So it’s not a fixed asset, part of your portfolio.
Ryan Fleming 21:52
Dave, can I can I bring this up? So you can explain it in more detail? Because I already know what universal or variable could do because many years down the road, how it can, quote unquote, blow up? Can you explain that in detail? For our listeners, so they understand the difference between guarantees, and a variable product? And what when we talk about it blowing up because of the cost of insurance, so they truly understand.
Dave Befort 22:18
Yeah, what, anytime I’ve ever worked with a client who has or has entertain getting a, a universal life policy of any kind, the first thing that life insurance agent did was put an illustration in front of them, and said, Hey, look at these numbers, this is how your cash value is going to grow. When they show that illustration, to me, what I point out is a look at the guaranteed side. The guarantees on most of those is that if your cash value doesn’t perform, like it says you will like like, you know, they, they illustrate it to then by age 65, you could be completely out of cash value and completely out of death benefit, have nothing left to show for it after paying into it for all those years. And the reason that is is because as you get older, the cost of insurance rises every year, because it’s built on a one year annual renewable term. You know, if you live to be at five years old, do you have any idea what $1 million of life insurance costs at age 85? I mean, it’s, it’s going to be in the hundreds of 1000s of dollars, you’ll have to cut a check for 200 grand just to keep that policy in force that your family has it. If you happen to die that year. What if you live another two or three, four years? So that’s why these things blow up. I’ve had multiple clients come to me after paying on these things for 10 or 20 years and say, Man, I don’t know what to do with this. What What can I even do with this, because I don’t want to keep paying this premium. They’re really in a bad position. So what we have done is do a what’s called a 1035, you can actually move the cash value from that policy over into a properly designed whole life insurance policy, which is what we’re going to discuss as a potential solution to some of the risk to all of the risk actually proposed by these variable life insurance policies or universal life insurance if you’re drawn to this plan because of the permanent life insurance piece. Well, the solution in my opinion, is a properly designed whole life insurance policy. Whole Life Insurance has been around for hundreds of years. Now, it was the main place that Americans store their their capital, prior to the advent of Americans being able to get into the stock market and Variable universal life policies and things like that. You know, I’m an insurance guy I could write universal life if I wanted to, but I choose not to. And frankly, the number one reason I choose not to is because I would never buy universal life policy for myself, I’m not going to write something that I wouldn’t buy for myself. So people have come to me and asked, Hey, I want to do this, I want to do it through universal life policy. I say, Well, I’m not going to do it. If you truly just want a universal life, you got to go somewhere else. Well,
Ryan Fleming 25:18
I absolutely agree with that. I wouldn’t do anything with my clients, if I’m not doing it myself. Because if I’m not doing it myself, I don’t believe in it, I don’t think I should do it. And I would never allow somebody else to do it. And I think that’s the way it should be. I mean, no different than, you know, stock picking, market timing or track record investing. I mean, we don’t want to hurt our clients. Right?
Dave Befort 25:39
Right. So you know, you put your money where your mouth is, and you walk the talk. So what what I specialize in, is properly designed dividend paying whole life insurance policies, they it solves the problem one of death benefit, and a permanent death benefit. At that, that death benefit is going to rise every single year of your life until the day you die. Or the day you graduate. As we like to say, it’s a little more gentle, right. So really what you get with with properly designed whole life insurance is all the benefits of what they espouse with this variable, universal life, without any of the risk. That’s what it is all the benefits, none of the risk, all the risk in this plan in a whole life plan is transferred to the company. They’re the ones taking the risk, not you as the insured.
Ryan Fleming 26:29
So, so if you did something like that, on the outside with a guaranteed whole life insurance policy, what are the fees to invest in that.
Dave Befort 26:39
So there are no fees per se, of course, there’s always going to be a startup cost. But if you’re in this long enough, usually within the first decade of your life, every dollar you paid in premium, has created an equivalent dollar of cash value. And guess what that cash value is guaranteed, it’s guaranteed once once any of your premium becomes cash value, it’s guaranteed to never decrease, it can only go up. And it does only go up it compounds every year uninterrupted, because you never actually remove any of that cash value, it stays in there compounding uninterrupted through interest in dividends, every single year until the day you die. And every year that you pay your premium, your cash value goes up, your death benefit goes up, it doesn’t stay static. So you might start with a million dollar premium right now, by time you’re 80 or 85 Knocking on heaven’s door, that could be a $5 million death benefit. So you know, starting at a million ending at 5 million plus, with millions of cash value in the bank. That’s, that’s the way it works. It’s also got a fixed premium. So it’s guaranteed to never increase, and it actually will decrease over time. And in fact, whole life insurance is the only life insurance where you have the contractual right to stop paying a premium. And you get to keep the death benefit in force. Universal Life does not have that guarantee. So if you want to stop paying the premium and retirement and just start collecting dividend checks tax free for the rest of your life, you could do that. You don’t have to there’s there’s flexible ways to reduce your premium over time, or eliminate it altogether.
Ryan Fleming 28:26
Legacy planning is something is very, very important to me not only passing on something to my children, but also passing it on tax free. However, there are many pilots out there that are single that don’t have children. And I talked about how we can structure the policy a little bit different for them where they may not, they may not care about the death benefit as much. And can you just tell tell them how we’ve structured a little bit differently for them.
Dave Befort 28:52
When I when I designed these policies, what really we take what you typically think of life insurance and flip it on its head? We do 180 So most people are saying how much coverage can I get for the least amount of premium? Well, for people who are interested in utilizing this as a really a separate banking system, you know, they can create and control their own banking system through the use of one of these properly designed dividend paying whole life insurance policies. What we do, instead of asking that question, we say, how much premium Can I pay? How much money can I put into this thing? And get the least amount of death benefit coverage possible? That sounds like an asinine question, right? Why would I want to pay a bunch and get as little benefit as possible? Well, just like you said, maybe the death benefit is not the most important thing to you. And and maybe you know, even if it starts small the death benefit will be projected to be enough if you live to be a long, healthy life, but the reason we design it like that is because that maximizes the cash value. So you have more money going towards the cash value portion and less towards the death. benefit portion, if you will, that’s kind of the layman’s terms of explaining it not exactly how it works. But and the reason we want to accelerate that cash value growth is because now you’ve captured that money in a, in a permanent spot that’s going to compound every single year on top of itself, until the day you die. And you have access to it. So how do you have access to it, you have access to the not only what you put in but every all the growth on it completely tax free for the rest of your life. And we utilize that we access that through cash value loans. So the idea is never to withdraw that cash. Instead, take a loan against it, let it continue building and compounding in the background, while you leverage it to go do your investing over here or go buy that new car, that new boat, buy that retirement house, whatever it is you want to do. So I saw a really good video yesterday, Ryan. Senator Warren, Elizabeth Warren. You know, the self proclaimed socialist was on the news talking about how you know how evil Jeff Bezos is because he never pays taxes. And what she said, and this is legit, what she said was exactly spot on. You know why Jeff Bezos doesn’t pay taxes, it’s because he doesn’t report an income, you know why he doesn’t have to report an income or a very small income. It’s because he doesn’t cash out his Amazon stock. That’s his asset. He’s not selling his asset and taking the cash. He’s taken a loan against his asset and borrowing somebody else’s money to go fund his lifestyle, while his asset continues to build in the background. Right.
Ryan Fleming 31:48
Sounds like a prudent investor. To me, it doesn’t sound like a criminal. It sounds like a prudent investor.
Dave Befort 31:53
That’s what all those big time guys do all the CEOs of publicly traded companies. Absolutely, that’s what they do. But guess what, we can do it at our level two, we’re not CEOs of publicly traded companies. But if you have just replace Amazon stock with cash value, when you’re dividend paying whole life insurance policy, never take your cash value out, never surrender it, never withdraw it, let it continue building and compounding in the background and take a loan against that asset. That’s it. So we can be Jeff Bezos right now. At you know, at our level without being a multi billionaire.
Ryan Fleming 32:27
This This seems like the conversation we have all the time about how you know, and I present it with, why would a celebrity that has plenty of money still take out a mortgage? Why do they not pay cash for their house? And the reason is because it doesn’t make any sense. And of course, we’ve sent out the video that you’ve seen on home equity. But yeah, it’s about letting your you know, in this case, letting your money work for you in multiple places and constantly having an asset that’s continuously growing and never going down.
Dave Befort 32:56
Right. And that assets guaranteed to be there when you need it. And that death benefits never gone away.
Ryan Fleming 33:02
So Dave, let me back you up a little bit. Because I know we’ve kind of gone down this path. And we’re talking about, you know, dividend paying life insurance. But let’s back up to the Delta pilots that are listening to this podcast and for us trying to talk about episode 38. On engage in the new benefit that they have to decide to opt into or opt out of, let’s give them the cliff notes of what we think they should do.
Dave Befort 33:26
Yeah, bottom line, do if you do any other life insurance, what’s that?
Ryan Fleming 33:30
Right. And if I disagree, I will speak up, but I think we’re okay. But good.
Dave Befort 33:34
But what should they do life insurance? It’s a lower imputed income, you got the same death benefit coverage, do it, why not? And, you know, what? I’ve worked with some pilots recently who, you know, one may be coming back from, from being away for, you know, getting over cancer. You know, I worked with a guy who has been cancer free for about three years. But because of the type of cancer it was, and, you know, yatta yatta yatta, the insurance company won’t touch him still. So he’s uninsurable. So this at least along with the imputed income being reduced, it gives you the option of having a permanent life insurance policy to take with you down the road if you are uninsurable, and you still need life insurance at that time, but if you’re going to do it for anything other than the death benefit, I’d say there’s a much better option for you that puts nothing at risk and gives you all of the same benefits.
Ryan Fleming 34:30
Okay, so cliff notes version, I think that the variable universal life plan that they’re offering is definitely a step up for the reasons we discussed from the normal term, I would definitely opt into that. What I wouldn’t do is continue to invest in it because of the other things we talked about the fees, the rising cost of insurance, but if this is something that truly sounds exciting to you, we can show you a better way on the outside. I’m gonna have links to some other podcasts and a video I put together about it. What I try to build out for my clients for safe money assets for their retirement, also that, you know, obviously, taxes are a huge portion of everything we talked about to get more of that tax never money. And this is all things that we work on. This is all things that that my clients work with Dave, if you are a client, you haven’t talked to Dave, you need to start looking at the your inbox and start seeing all the stuff that we send out or listen to some of the podcasts and we can work through that. Dave, is there anything else you want to add for this this podcast today talking about the variable universal life?
Dave Befort 35:32
I mean, I could I could talk for a long time about it. You know, I think I’ve beat that horse enough. I don’t need to kick it too much more wallets down. Yeah. But yeah, let delta pay pay that premium for you. But don’t put any of your own money into it. And let’s talk about a better option for you. If, if that cash value account appealed to you. So lots, lots more options out there that are much safer. So yeah, listen to watch the videos Ryan has out there. And maybe we’ve got some more videos in here, or podcast episodes prior to this one with me and you talking about the actual concept that I use to to do this, right is the infinite banking concept. Using that concept, learning how to become a banker create your own banking system, through the use of a dividend paying whole life insurance policy.
Ryan Fleming 36:29
And we’ll do our best with this being an episode that I would imagine a lot of Delta pilots will be listening to. We’re going to do our best to link to almost every tool that you have out there. We’ll have the episode 38 from engage, we’ll have that linked. We’ll have a bunch of podcast episodes that we’ve talked about this previously in other videos that could be good tools, and also a way to reach out to us if you want to go down this path and try to find a better way to land in retirement safely.
Dave Befort 36:56
There we go. And like I always say Until next time, control your capital, or somebody else. Well.
Ryan Fleming 37:03
Thanks for listening guys. We’ll talk to you soon.