[Week 7] Ask Me Anything: What Is Permanent Life Insurance?

Curtis Ray's Podcast

Send any of your financial questions to my email: [email protected]
Today’s question is "What is Permanent Life Insurance?"
MPI® is a permanent life insurance contract, meaning it has no expiration date. Unlike term insurance, it is 100% guaranteed to pay out to your spouse, kids, or whomever you choose as a beneficiary when you pass away if the policy remains in force.
This guarantees, that no matter your age at death, generational wealth is achieved. Various financial influencers suggest permanent insurance is ‘expensive’ and advise to “buy term, invest the rest” as a more cost-effective strategy. However, that limited philosophy is also falsely premised that by the time we are 65 (retirement age), we are self-insured. Of the people I know, few fall into a category of financial prosperity at death, much less during life. Add to this that few actually buy term insurance and invest the difference. Therefore, it is a short-sighted, linear approach to financial security. Though the cost of insurance does increase over time, the compounding mechanism outpaces the natural effect of inflation. It’s never about how much you pay alone, but how much you grow – meaning the value you receive. Many financial influencers suggest by the time you get to your 60s and 70s your cost of insurance will diminish your cash value significantly, but this is just not true. The math doesn’t support this statement.
Inside of the MPI® system, the cost of insurance is built on a concept called Annual Renewable Term (ART). This type of insurance varies in cost every year according to your age. As you get older, the cost traditionally increases. Many people look at this as a drawback however MPI® provides a solution to this increase in cost of insurance. Through the exclusive RELOC™ feature of the MPI® system, you can earn an additional 2-4% interest on average. This additional Compound Interest can offset the increase in insurance cost while also increasing your Compound Interest potential. This feature can minimize the risk of insurance becoming too expensive as we get older.
As an example, here is the projected cost of insurance for a 35-year-old, healthy male, contributing $500/month into the MPI® account until retirement and passing away at age 85. MPI® is a max-funded Option B contract, which means your MPI® plan will purchase the lowest amount of insurance required by the IRS tax code section 7702(a) to keep your costs as low as legally possible and still receive all the features and benefits available. The insurance amount in this example is around $213,000 for the $500/month contribution. Insurance contracts are proportional, meaning if this same person doubles their contribution, the required insurance also doubles ($1,000/month requires around $426,000 insurance). Half the contributions or $250/month would require half the life insurance or around $106,500). Age and health impact the amount of insurance required; furthermore, your ongoing health effects the performance of your MPI® Plan.
I'm Curtis Ray, Always Be Compounding™!
Website: https://mympi.com/
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