The BEST Life Insurance to Get Rich

what's up everybody Jamal Gibbs your family oriented entrepreneur in today's video what we're GNA do is talk to my man DeAndre Clayton about the different types of life insurance policies and what's going to benefit you the most when it comes to the HELOC strategy and your real estate investing business let's get into it so what's going on bro oh man not much just cooling you know how it go absolutely man so I wanted to talk a little bit about the different types of um he the different types of insurance policies and how they can be beneficial to people what's not going to be benefici you and then kind of tie that into the HELOC and which one is going to be the best one to use so this is a topic that a lot of people have questions about so why don't we get into it bro absolutely absolutely so um first off uh cuz sometimes I get this on a call oh you don't like term insurance I get that sometimes right and so it's not that I don't like term insurance really what it is is that you know um a hammer has a different job than a wrench right now can it can it do some functions that a wrench possibly can do yeah but will it fully accomplish it no right or will it be efficient will it save time so on and so forth uh not quite and so uh this is a really really good topic because sometimes people don't know when they should position which product for which job right and so obviously you have term life insurance you have universal life insurance which is broken up into uh three different groups you got index universal life you have uh regular universal life you have guaranteed universal life actually and you also have variable universal life so that's four different types and then uh you also have the whole life uh Journey right um and so each of them has their purposes and the reasons why you would use them for whatever circumstance important make sure that you're covered regardless of what right and so term is usually the most common form of coverage because most people think about life insurance just from a cost standpoint and not necessarily a value standpoint are there valuable terms absolutely right um but most of the time when it's sold it's not sold from that platform so case in point um you could have a term it's just like a level term and it pays out if you die and it's you know 10 20 30 years what or what have you right most of the time when people are buying terms they're buying it to fit a specific problem right so if I get a decreasing term which means that the death benefit drops and my premium drops as time goes um I might be getting that because I put a 30-year term on my house and I'm expecting that as I'm paying off my house I don't need as much to cover it right um if I get an increasing term I'm expecting that maybe my income will go up over time so on and so forth but I really don't want to pay that much money for the insurance right um but the re reality is is the important part to understand about insurance in general is two principles one is alator which means that you should always get out more than what you put in um and two uh there is human life value I think a lot of like if you go on the internet a lot of people go away from human life value selling right they they they try to sell it only for oh income replacement oh you know house replacement and and they forget that human life value is the most important part of what insurance is about so in essence you should be striving to be covered for your maximum human life value now this is very different than like car insurance right so like car insurance uh has this actual cash value so like if you crash your car total it so when you say some when you say uh be covered for your maximum human life yes give me an example about that right so so your human life is not based on what you have on you at the time right right it it's not how much can you generate how much can you generate in the future right so you're really striving to say hey let let's look at what am I capable of doing what do I believe I'm going to do in the next 10 or 20 years or whatnot and I want to get insured for that right because if your family loses you obviously they're not just losing you for a year they losing you forever they're losing you forever right and it's going to take time for them to even gain some type of firm footing economically um from the loss of anybody in the family right and so so it's important to kind of put that into perspective and say okay maybe I shouldn't just be getting insured for the house and that's it right I should be insured for what should I be capable of doing for my family in this time period in this 10year time period or whatever right so the best way to get insured in that standpoint is usually going to be a convertible Term Policy right and this is something that I've kind of moved into um because of like infinite banking infinite banking that concept is cash value Focus it's not death benefit Focus right and so if you're going to be so cash value Focus to utilize infinite banking we don't want to get away from which a lot of insurance agents get away from it's still insurance we want to make sure that your family is taken care of if something happens to you so that's where the convertible comes into play that's where the convertible term comes into play now this is a very unique product because what a convertible term does is let's say you got a $3 million convertible Term Policy right so now this3 million doll convertible Term Policy comes about and you say hey Deandre I want to do infinite banking right and as I'm looking and designing a policies maybe the opening death benefit is a million dollar we could actually convert a million from the $3 million term right that's where the convert the term convertible comes that's what that's what convertible comes in and the reason why that's so beneficial is because when we are doing a conversion there is no underwriting MH so a lot of people may need to really understand that what I'm saying is a convertible term has the ability to protect your insurability your insurability is an asset most people don't look at it that way but I want you to imagine that you know you and your family are going through different things maybe you bought an insurance policy when you were 20 and it was a convertible term and the and the term is almost out and all of a sudden you're sick mhm you're you got cancer right would you like for your insurance to lapse or be done away with in that time no absolutely not right nobody would want that but would you like to say you know what I know this thing is lapsing next next year but I'm in remission right now now let me convert this over into a whole life policy without having to be underwritten and still being treated so you can move it around you can move it around and still being treated as a person who was preferred plus right even though you're undergoing dialysis even though you're undergoing chemo whatever you could be undergoing you can convert with no questions asked and then can you convert back no you can't convert back to a term which I mean really there would be no reason to come back to the term um because the term goes up as time you know goes on as well so um so that's a really really important thing now there's some different structures and different things that also happen so every insurance policy also has writers right um well not every one of them but many of them have the ability to add writers so uh for instance you might have critical illness writers you might have chronic illness writers you might have um uh what is it critical injury writers and different things like that so normally when you're looking at a term for instance if you're looking at a term and it has no writers don't buy it why would you say that though yeah well the reason why I would say that is because life insurance is supposed to be used throughout life MH um if you get a term policy and all that it can do is pay out at death that's death insurance right got you now I'm not against term life insurance I'm against term death insurance for the CLE for the crowd right so I'm against term death insurance so in essence I would much prefer you to have the ability to say hey man I had a stroke I was insured through my term company and I was able to dig in and accelerate and take some of the death benefit to rehabilitate myself right because now you've done it with the cheaper dollar with the term dollar so a lot of insurance agents aren't selling term policies that way they they don't address it that way and there's a there's tons of companies that do it and I will shout out one company that I love to death Foresters so Foresters Financial um they are basically an insurance company that actually is like very similar to your credit union they're 501c3 so on and so forth but one thing that they do very well is every policy including their term policies comes with every writer right and you don't add money to pay for the writer but then the other portion they do is they give member benefits so you think about how cheap a premium is on many term policies one of their member benefits is that if you have like an emergency assistance situation like maybe your house floods or something like that they'll pay for you to go to a a hotel for an extended period of time now if I'm only spending $100 a month on it that's worth it that that could pay back my premium there's been clients who've received checks for $1,200 $1,700 multiple times throughout the year for emergencies that happened they broke their bone they were able to go to the insurance company and it paay that's life insurance right case in point with the property insurance yeah situation you know I had hell damage on my roof right mm they replaced the whole roof it was a $112,000 expense exactly you know what I mean so something like that exactly yeah that's where insurance is beneficial that's where insurance is beneficial now if you had Foresters at the same time they would have paid for the hotel while the roof was getting done yeah exactly which is kind of cool exactly um but they and that's the case with rental properties as well you know what I mean absolutely and so so you think about also like um they have an orphan benefit so like if both parents were to pass Foresters actually will pay child support to whoever would be taking care of your kids $900 per month mhm right so when I sell a Term Policy with them I think I'm doing the best thing for the client right because there's so much value that they're given so so how much would something like this run the average person man it's people who can get these policies for $15 $50 $100 20 I mean it it it's a whole Gambit of things ter depends on situation depends on how much they want to be insured um now of course as I mentioned and this is one thing about also convertible terms you want to make sure that whatever company that you're getting a convertible term with they have a policy that you actually want to convert into so this is really good for people who call me and want to do infinite banking well if we do a convertible term first I would do a convertible term possibly with the same company I would design the infinite policy with so that you can naturally go over and not have to deal with the underwriting right um but there's you know and of course that company would still have all those Riders as well um you know they just wouldn't have orphan benefit and different things like that so using policies is very important just to be clear the orphan benefit is that 900 a month he was talking about that goes to your kids per child got you per child would go to the Guardian to take care of your kids got and then your death benefit will still pay out okay so that's that's insane right um especially if you passed early on and your kids had to go an extended period of time without you um also provide scholarships and different things like that does it matter how long you're on an insurance policy before that insurance kicks in so let's say something like oh good question let's say if somebody's on an insurance policy for a year to and then they you know something they in a car accident and they die good question you know how how does that work good question so in the insurance industry you got you got two different basical terms you have the contestability period and you have the elimination period so I'll I'll discuss the contestability period first so for the first two years of any policy that you form what happens is you can be paid out from day one if something happens to you however they will do do further underwriting on the situation to make sure that maybe the surface level underwriting that they did earlier on um that they didn't miss anything right and so yeah but how can you contest it if it it's a it's a pure accident if it's a pure accident obviously you're or if you catch cancer two years later you know something like that obviously right so so obviously the insurance policy would pay out in those situations now an elimination period is different so an elimination period what happens is and normally I will say this you only see elimination periods on policies of uh what they call guarantee issue so guarantee issue is I have cancer I have uh endstage renal disease I have all these different problems and I need insurance right because most of the time most of you only want insurance when you have your problem that's a fact and that's the worst time to try to get insurance because now not only are rates going to be higher all these different things but you won't even be able to qualify for as high as amount of insurance if you already have these these situations going on but I digress that's just one thing I always deal with it's like that with everything I just deal with that thing so much right so so when you're when you're dealing with guaranteed issue policies they have elimination period so for the first two years the pay can't fully come out right and so what will happen is it'll kind of have a stair step and this also happens with modified like if you're if you're underwritten and your health is bad and they're like okay well we'll modify it where maybe you know a year in we'll give you 25% then after the next year then you'll get this much and then now you'll be fully insured for the amount that's there but in the meantime what they'll do is they'll always refund the premiums and at least 7 to 10% interest they'll give you for you know how much you have been contributing if you were in an elimination period got you man quick question man you know there's there's a ton of different insurance policies it seems like the convertible one is the one that you're interested in the most right now you feel like that's going to be the most beneficial for our listeners so I think I think the convertible is always the best choice if you're think about like something like infinite banking right and you're like oh you know you're kind of on the fence with it I'm on the fence I want to learn more I want to take my time to get as much information in as possible well let's go ahead and get you insured to the best of your ability and then once we've gotten you insured to the best of our ability then you have more time to make this decision right and you don't have to worry about what if I'm at least you're insured and you've protected your insurability and the benefit of of that is if we protected it to your max degree then you can start multiple policies throughout your life you you don't have to convert all of the term over at one time right so you can say all right well I'm getting a million of whole life over here I'm going to go ahead and convert it from this term I'm getting another million you know so on and so forth so you know you you buy the time to always protect the most valuable thing in the picture which is you right uh and that's the kind of that's the Nuance of the difference in life insurance when it comes to life insurance the valuable thing is the person now people sell life insurance based on other things they base it on your assets Mar all that kind of stuff that's the marketing piece right and they only do that to try to make you uh bite right so you think okay well I just bought a I just bought a300 ,000 house well if something happened to me I don't want you know I don't want my kids to have to not live in this house so on and so forth so then they come up with mortgage protection right the reality is if if if you focused on your human life value you wouldn't need mortgage protection cuz your mortgage protection your mortgage should be worth less than you right um and and a lot of people don't really kind of understand that um that the value is the person on life insurance because life is what's insured if you're talking about a car the value on auto insurance is the car right the car is not releasing a death benefit to your family what it does is if you total the car then it says hey what was the actual cash value of the car before total right and they give you like 75% so life insurance has a future Viewpoint it doesn't do well what's your value right now because if you if you you got ensure for what your value is right now your family would be done for that's a fact they would be done for right for a lot of people for a lot of people right you know most people don't have a positive net worth that's right man right so so you you have to understand that oh man now I understand why protecting my insurability is so important especially if you're talking about uh generational wealth right I I I can't understand how people talk about generational wealth and leave Insurance out of it right um now there is a Nuance though that I also want to that's a great that's a great Point man you can't talk about generation wealth without being insured no no not possible not possible you're taking the long way right I if you're talking about generational wealth in essence what the insurance company's job is is to add money to your pot to protect your generational wealth whether it be to protect the taxes that can come up if you've really generated a lot uh like I've I've said in the past a person who subscribes to BU ter and invest the difference already tells you they'll never be worth more than 12 million MH because because now the inheritance tax comes in all these different things come in so if you actually believe that you're saying you're putting a ceiling on what you will produce in life and what your net worth will be to that point got you man so how does all this tie in with the helck bro like how can the convertible uh life insurance policy how can that be beneficial when it comes to a HELOC and how can we all tie this in to the infinite banking policy right so so I will say the HELOC what I love about concept not policy yeah the the yeah the the hilock concept the infinite banking concept but really important when we talk about the hilock concept what it allows you to do is to get out of your mind the concept of everything is not on sale for me right so this is a concept and if anybody has set an appointment with me I go on and on about this concept but basically what we've done is it's natural for us to feel like certain things that we beem very expensive we block it right so right now and I I I'll tell the truth right so there is a jet that might be on sale for 16 million right um and it used to be 20 mhm well audience I'm going to tell you the truth man I'm not like these regular gurus who try to you know blow smoke up that's not on sale for me right that's not on sale for me right 14 million ain't on sale it's not on sale for me right so it doesn't hit my radar right it it doesn't hit my radar I'm not thinking man you know what yeah I'm okay that one over there 14 that one 16 all right which features it never happens my mind doesn't even go there the problem is that most people do that also with things that they actually can afford they just don't know they can afford it right so rather it be life insurance which you know uh or even saving for retirement or any of those different things they can't afford it they just don't believe it right and uh there's a there's a uh there's a site called bankrate.com that gives statistics about life insurance and it says that 50% of Americans believe that whole life insurance is 300% more than it really is that's crazy right so in essence why why do you think people believe that then well they've been sold that concept of by term invested difference so much that they've only focused on cost and said you know what I'm not even going to delve into it right but what they haven't focused on is most terms will be out of of place they will not be active by the time you have a life event I remember you telling me one time uh like like what you just said to to that particular point you said most term insurance policies don't pay out oh yeah yeah most people don't get the use 99% of just to be clear why is that the case it's because the actuaries at the insurance company are brilliant they're very smart that's why people and just so just to be clear not to cut you off that's why people don't trust it yeah they feel like they're just giving money to the insurance company but that's because they're buying term there you go right and so so the actuaries what they do is they say okay I'm going to run your health history oh you pretty healthy right I don't expect you to die in 30 years now you could be very healthy and you could be 70 mhm you're not going to get no 30-year ter on no 70 year old let me give you an example years ago I was in my mid 20s I didn't know much about life insurance then but I got a policy anyway cuz I started growing a family you know my daughter was young I I'm married with kids you know Etc right so I'm in Pennsylvania I get a policy I'm trusting the person that's setting up the policy there plug me in with the right policy so I get a million dollar policy back then right and he's like oh it's going to cost you $100 a month perfectly fine um the policy was set up to where my oldest daughter who's 18 now she's me 19 when she turns 25 um that policy basically goes away MH you know what I mean she was the only kid at the time right all right um so basically I'm paying on it for 25 years if something would have happened during that 25 years then they would have paid out but they did the blood tests and all of that other stuff and they said okay chances are you're going to live past 25 years so we're going to give you this policy absolutely so if you're is that the right way to look at it that's the right way to look at it if you're not getting a convertible term you're at the casino and the and the actual insurance company is the house M the chances of you winning in a casino is very low it should be 50/50 I learned that it a it ain't right and so the CH I mean really and this is not conjecture 1% are paying out because the people are that smart that they say nah we not going to give you 30 years because there's a chance you might actually die in 30 years right so most term policies are accidental policies they not they're not called accidental death policies but in order for them to actually pay out it has to be an accident it's you know cuz in your in your formative years you're not really going through that right and that's the importance of hanging out with people who are smarter than you in what they do that's the importance of having friends that understand what they do yeah cuz you know you're going to get the best of it yeah yeah yeah it's it's and and this is really good information for people that when you are going to an insurance advisor go to somebody to get advised mhm don't tell them what to do tell them your situation and if they're an expert they advise based on your situation most are going with the mindset of I already know what I want to accomplish so yeah let me let me just do this and it's not really working for him I get that man there's but you know just to play Devil's Advocate with that a little bit there's a lot of people who feel that financial advisors take advantage of people so they kind of go in with the mindset that they know what they want to do with their money and I'm not going to have this person tell me you just going to do it gotcha gotcha and I completely agree with that now I'm going to say something for all look at these athletes man you know what I mean and I'm going to say something for all the doctors for all the people who have a bunch of letters and I'm going to apologize ahead of time it's not that you're not competent is that America has set up a system that bases Merit on designations and doesn't base it on is the person competent right and and a lot of endusers right so you go to the hospital obviously you just trust the doctor because he's a doctor you don't trust him because he's gained a trust you don't trust him because hey this is making sense to me and what most people do they fight against what makes sense to them so when it comes to a financial advisor where the number one problem is for the average person is they're hoping that this person will do the right thing by them without them actually checking a hand and saying does this actually make sense right right and so and I mean and I could use I've used the illustration with the market and different things leaving your money with you know uh a a money manager well would you actually let somebody in your family who's responsible borrow $5,000 now you we know you got a different kind of money so that but the average person can't afford to put four tires on their car right so giving $5,000 um to somebody who you even trust is very hard so why would you sit your money somewhere and say uh he could just do whatever he wants with it we've lost the importance of being Financial stewards in actually understanding what we're doing right um and so in essence the financial advisor he's the king and he's so smart that you could never understand what he's doing cuz he's brilliant and he has all these letters right you know and and then you get messed up because the financial adviser made you sign a whole bunch of paperwork relieving liability yep and you don't even think about why do you make me sign paperwork to relieve liability right and so when you're talking about seeking advice it's okay when I go to be advised do I understand why he came to that conclusion is the next thing you should ask right and if you're not asking that you won't get good service if you're not asking that you'll be like MC Hammer you'll be like every athlete that has been fleeced um from their money because they just trusted designation and they didn't trust I get good vibes off of the fact that this person will take as much time as possible to make sure that when I move I know what I'm doing so they trust the label not the expertise they trust the label not the expertise right and and the financial system is backwards it's it's but backwards I ain't going to lie to y'all I believe it it's but back backwards you know they they they call 401K savings you know savings accounts and I'm like I don't remember a savings account I've ever lost money not a savings account I've never lost money in a savings account I can't lose 30,000 in a savings account it's investing and it's speculating in investment and so there's a proper protocol to how you're supposed to deal with your finances one you should be protecting things first right you should have a good protection layer before you spend money anywhere M right so that's the purpose of insurance it's the first stop right then after that if you want to invest then vet your investment make sure you understand what you're doing if you need an expert like yourself to talk to then hey do that right no problem then after that now you have room for speculating speculating shouldn't be your first stop there's far more people with a whole bunch of money in a 401k that is volatile mhm and they still ain't got $1,000 in their saving account you know what man you know everybody's circumstances are different yeah and that's why even with with my coaching program I don't treat every single person the same neither do I every you know just like you you know we we talking about the insurance earlier where you know there's different types of insurances based on people's circumstances like so for me with the coaching you know somebody might want to build passive income I'm gonna gear their business toward you know building a rental port a rental portfolio somebody might need quicker cash so we goingon to wholesale or we're goingon to Fix and Flip right whatever the case may be right so there's different types of insurances as we dis we discussed absolutely um just like with anything else everybody's situation is different so the best thing that they can do is have a conversation with you and um see what fits their bill so how can people reach out to you man oh well obviously ly Clayton Financial Solutions is my website uh you can book a call there we we really appreciate everyone coming you know it's been fun for me getting to know everybody too um uh we also I also manage a firm here in in uh Greensboro actually no we're in Winston um our headquarters is in Winston it's called Pioneer Financial Group so I manag that firm we have people who can help you with long-term care which 70% of people will need in their life which is why it's important to get these writers right uh on policy so you can have some coverage if something serious happens um disability insurance uh you know obviously you know I'm the IBC guy the whole life guy who does a lot of that uh some of us write iuls um and that's one thing I also want to touch on so iul is not for infinite banking right um why do people say that so so what the iul is very easy to attach yourself to because you can have a lower premium with the potential of making more got you right um but underwriting there's two different ways that underwriting goes on policy so when you're in a universal life policy um except for a guaranteed universal life which a guaranteed universal life is for seniors who want more Insurance than final expense and they're still fairly healthy enough to get it right um but it locks in insurance and it doesn't go up and down in cost like an IL could so an I uh what it has is what we call current uh issue underwriting uh or performs similar to that so basically the mortgage and expens fees they go up over time you don't notice it initially because when you're younger your policy may be performing fairly de so you're like oh okay good that's what's up and then as you get older and the cost of insurance goes up with every year that you age the iul is doing that in the background so then what happens on the latter part of most people's lives if they're in an IL is it starts to cannibalize the cash value and can cannibalize the death benefits um Can it grow past what a whole life can do yes can it sustain the growth no it cannot right uh and that's the reason why I typically do a whole life now if you're coming to me and you're like hey I want to do IL for infinite banking it can't do it for the purpose of the cost of insurance raising that's one reason and also um iul stands for index universal life so that index comes at a cost about 2% on a policy if the market goes to zero you still pay that 2% on the policy which means was your growth infinite no right uh I want to go ahead and lay that to bed because a lot of people you know I see that all the time when you going to do my IL and it's like I have people that I can refer out to that I believe are some of the best ilul sales people that it can work for you um however you will need an exit strategy on an iul and the product has not been around that long so you're not going to know anybody in your real Circle who has had an i for 15 or 20 years and it performed well the entire time so it's not time tested yet it's not time tested yet and that you know could it be time tested in 340 years maybe got you so just to wrap all of this up man uh convertible life insurance policy is good for convertible term is good for protecting your insurability which is an asset and then you can transition into a whole life with the different uh variations that whole life has uh obviously if you have seniors you probably think of final expense and different things like that but we want to be able to transition before we get to a point of needing a policy that that pays out $5,000 got and when it comes to convertible and tying it in with your HELOC and your infinite Banking and all the other strategies that you're using you always got the money the helck so one of the one of the main problems of most term policies because they don't grow in cash value if you miss a payment they're quicker to go ahead and end the policy because there's nothing to sustain it anymore there's no backing on it right and so when you have a hel loock and you're like hey you know I hit a rough patch and your house has a ton of equity in it we can just utilize the house to make sure that it holds you over during those times which is uh what's best now of course there's also a waiver of premium that can be added to a convertible term or most term policies might have that right or that you can add which means if you face a disability that the policy will continue to be enforced throughout your disability without you having any issues got you so again there's a ton of different life insurance policies that you can tap into um the biggest takeaway that I got from this conversation was the convertable can be used as something that you know you at least you can be insured until if you're thinking about the infinite Banking and you're thinking about going that route with things the convertible insurance will ensure you until you're ready for something like that and then you can be able to scale from there so I I do like that for those who are kind of on the fence with the with the infinite banking situation and um if you want to learn more about the convertible uh term policies then be sure to reach out to DeAndre so uh Clayton Financial Clayton Financial solutions.com there we go yeah and uh we appreciate having you again brother as always my brother it's always a pleasure absolutely man so I know you guys love DeAndre uh this is my brother for real right right here and um listen uh if you want more information on how this actually works make sure you reach out to if you want us to do another episode be sure to uh leave a comment in the comment section but in the meantime be sure to subscribe to this channel click the notification Bell and uh tell all your friends about it you got something else to add I got one more thing so uh I do also have a radio show uh that you know I produce and we have conversations it's called liquid radio uh you can find it on TuneIn Radio on the WDRB uh station so it's you know it's National um so I love having these conversations and if you guys have different things that you have going on I need guests sometimes I want to hear about what you're doing in your life and being able to uh interview and and cooperate and give you a microphone for what you're trying to do as well yeah man we meet some interesting people doing what we do especially as content creators and we're not content creators this is like a secondary this is for fun we actually do what we teach people absolutely how to do you know we we do this I I really do real estate he really does insurance he really does infinite Banking and stuff like that so we're not just talking about it we're living it at the same time so again guys we appreciate you watching this video leave a comment subscribe click the notification Bell we'll see y'all in the next one take care everybody

Channel: Jamel Gibbs

Views: 4,957

Keywords: real estate investing, wholesaling real estate, wholesaling houses, jamel gibbs, flipping houses, wholesaling, wholesale real estate for beginners, creative real estate investing, real estate, jamel gibbs real estate, cash value life insurance, whole life insurance, compound interest, Become your own bank, Personal Finance, Insurance, Investing, Wealth, convertible term life insurance, term life insurance, best life insurance, how to use life insurance to get rich

Id: vpostuN62Ic

Length: 40min 23sec (2423 seconds)

Published: Mon Jan 22 2024