[00:00:00] Intro: Welcome to Private Banking Strategies Podcast with Vance Low and Seth Hicks, your secret weapon to protect your assets and never have to start over financially again. Vance and Seth help high net worth individuals, families, business owners, and investors, structure and asset protect. Tax free Fortress for their families.
[00:00:21] Intro: Learn how to keep what you earn and use the velocity of money to create your own private banking system. Join us on this journey as we explore the secret strategies of the rich and political elite and help you take total control of your financial security. Now onto the show.
[00:00:42] Eric (Host): Hello and welcome to Private Banking Strategies with Vance Low and Seth Hicks Vance. How are you?
[00:00:47] Vance Lowe: I’m doing great, Eric, how are you?
[00:00:50] Eric (Host): I am doing fantastic. I’m excited to get into content today. Before we do those, Seth, how are you doing? Doing great, Eric. Glad to be here. Yeah, I’m so glad you guys are making me a part of [00:01:00] this again, as usual, today you’re talking about how a specifically designed banking life insurance policy is constructed, and we have 10 points to cover, 10 different items that you guys are gonna cover in this.
[00:01:10] Eric (Host): And you’ve given me the role of mc, so I’m gonna present each one of these points and you’re gonna explain it to me, right? We hope so. Yes, I hope so. And I’m sure the audience hopes so as well. So let’s just get started. Let’s jump right in. So number one is the type of policy to be used. What are you using?
[00:01:28] Vance Lowe: We’re after a very special banking contract. A contract that existed actually before our country was a country. Okay. We didn’t have banking like we have now. Lloyd’s of London came over and they introduced a contract with. Their agent representatives, I don’t know what they were called back then specifically, but for quote a premium, they would be able to [00:02:00] buy a death benefit and have this agent take care of all their valuables.
[00:02:08] Vance Lowe: And this contract assured that they would get so many things or whatever, right before our country was a country. And then it evolved until the very first. Mutual life insurance came into existence or came over. A lot of these insurance companies were already in existence and they moved over to the United States, and so it’s absolutely critical that you go back to the original contract, even though we’re modernized and the strategy was eradicated out of the United States.
[00:02:48] Vance Lowe: These contracts still exist. They tweak and they change a little bit, but they are and can be put right back into [00:03:00] a banking format. And so let me tell you what that is. That is a participating, a mutual whole life insurance contract. That is what you’re looking for with an insurance carrier. That is friendly to the strategy.
[00:03:21] Vance Lowe: By being friendly. We need to move money in and out and. If they have a stock division, and many of the mutual companies have brought on stock divisions, and if the stock CFO or whatever is the president at the time, they have a reverse philosophy participating mutual whole life insurance company. The policy insureds or the policy owners are the owners of the life insurance company.
[00:03:57] Vance Lowe: Mm-hmm. And they control that company and [00:04:00] they could literally vote a no confidence and kick out the president. So the stock divisions, they have stockholders and they have to have money on hand so that they can pay stockholders, their profits. And so they want to keep as much of the cash value in store as possible.
[00:04:22] Vance Lowe: So the difference is. In philosophies, if you go to an unfriendly one, and many of us already have contracts with these New York Life, equitable, Northwestern Mutual, or all companies, fantastic companies and what they do, but they don’t want or allow the banking strategy, and you could easily be.
[00:04:47] Vance Lowe: Investigated for money laundering because we do the same thing. We put money in, we pay ourselves back, we borrow money, we pay ourselves back. We wanna stick with those friendly companies. We have a list and everybody [00:05:00] can find out about that. So we have to stay with that. It’s absolutely critical in order for you to get a pure design for a banking contract.
[00:05:11] Eric (Host): Got it. Very specific. Why can’t you use index or UL contracts?
[00:05:16] Vance Lowe: All right. And I want Seth to participate in this because he’s got some good in-depth information here. It is not a banking contract. Do banks do anything out there that isn’t quote, ironclad locked into a contract? They don’t. Okay. They have to have that guarantee and that assurance index is a.
[00:05:42] Vance Lowe: Floating number out there, oh, well, if the market does this, if this does that, you could possibly do this universal life. It’s the FA of the day. And they have term turned a [00:06:00] term contract into what they’re calling a permanent whole life insurance contract. And it is anything but. I know we would get a lot of controversy out there, but if they don’t have the ironclad guarantees that these participating mutual whole life insurance contracts do, you cannot depend that in 10 years or 20 years or at retirement, that money’s gonna be there.
[00:06:29] Vance Lowe: These contracts allow you that. Our problem is, and the reason that we’re bringing it up, is that there’s a lot of banking pornography out there according to this strategy, and a lot of folks are out there. A lot of agents are out there to sell policies saying, yes, this will qualify. This will work for a banking strategy.
[00:06:52] Vance Lowe: And oh, look at these numbers. Look how it grows, and it outperforms. Those are not guarantees. [00:07:00] The history has had nothing close to that. Seth, tell me a little bit more, tell us, uh, the audience a little bit more why they might not want to do these index stuff and the
[00:07:11] Seth Hicks Esq.: Sure. Well, I, you know, I’ll give you the answer right up front and then we will peel back the layers.
[00:07:16] Seth Hicks Esq.: It comes down to risk. With indexed and universal life contracts, the insurance companies shift the risk. To the in to you effectively. And although they may make policy illustrations, which look absolutely wonderful, those best case policy illustrations never turn out like they purport to. And so we’ve seen horror story after horror story in the industry and others.
[00:07:44] Seth Hicks Esq.: ’cause we don’t place people in universal life or index policies, but others who have come along and. Been placed in those policies have bought the best case policy illustration that is presented to them, and they think, wow, you know, [00:08:00] I’m gonna make 12% out of this. That blows participating mutual whole life out of the water, but it really doesn’t.
[00:08:05] Seth Hicks Esq.: It’s tortoise in the hare and the hare. Is actually an illusion anyway, and they have certain terms. I’ve read one tragedy where an elderly lady had been paying premiums her entire life, and then for some reason or another they were late and they canceled the policy. And they gave base effectively no value after decades of servicing the policy.
[00:08:30] Seth Hicks Esq.: And, um. So there’s, there’s multiple, various reasons of why they won’t, but it boils down to risk. Alright,
[00:08:38] Eric (Host): the third point that you have on here is the components of a banking contract. What’s that all about?
[00:08:43] Vance Lowe: A lot of thi people think that, okay, decide how much premium I wanna pay and I stick it in here, and all’s well and good.
[00:08:50] Vance Lowe: That is not the case. The contract has to be designed to be the most efficient possible for [00:09:00] we the clients. Okay? So we want to put the components together that will make that happen. There’s some laws and some rules. Back in the seventies, a strategy like this became very popular and Uncle Sam came in and shut that down.
[00:09:20] Vance Lowe: And caused what’s known as the modified endowment rule. If you turn this into a modified endowment, we’re gonna tax you on everything and track everything. But if you stay on the right side of the fence, uh, all privileges as normal. What that was, Eric, was that people were taking their retirement money.
[00:09:47] Vance Lowe: And instead of getting a pension, they took a lump sum and they would buy a single pay, whole life insurance contract in these, uh, mutual companies. And their [00:10:00] net would be higher than the annuity or the, uh, retirement plan before taxes, and theirs was tax free. Totally. And it started catching on and about 10% of the population knew about it and was gonna do it.
[00:10:20] Vance Lowe: And see 10% in America is the saturation point in most everything. They had to go in and put that rule in. Now you can still do the same thing. It takes just a little bit longer, not quite as lucrative, but here are the components. There’s the regular premium. We all hear, everybody sells against it. Oh, we hate premium insurance.
[00:10:43] Vance Lowe: It’s the most expensive thing out there. It’s really not. It works exactly like a new startup company. As a matter of fact, gauging startup companies in order to make a profit. Usually the average is five years [00:11:00] before any profits seen at all. Anywhere from three to seven. Mm-hmm. And five being the average.
[00:11:07] Vance Lowe: You know where those statistics came from? Mm-hmm. It came from li, the life insurance industry. ’cause that’s what the cash value does. So we do a minimum amount, a base premium to qualify that. We stay on the right side of the fence for the MET Law. Then we go right back in and we buy single pay, whole life insurance with pretty much the remainder of the money.
[00:11:38] Vance Lowe: And we might throw in what’s called a term writer because if we’re gonna charge ourself. Interest, we’d like to borrow money out of the policy and not only put that back, but the interest that we’re charged too might be able to fit back in there and that there’s some wiggle room there. So those [00:12:00] three components is what it takes to set up these contracts.
[00:12:06] Vance Lowe: The rest are expenses. You could do premium waivers. You could do all kinds of insurability things and maybe you could do that, but we tell people right up front, we are not going to solve any of your death benefit needs. We’re gonna set up a banking contract, and we’re gonna go after the absolute minimums we can get away with in order to increase and have the most in cash value.
[00:12:36] Vance Lowe: So that’s how we. Those are the components in that. What have I missed, Seth? There’s few, probably a few more things.
[00:12:44] Seth Hicks Esq.: No, I mean I think those are the nuts and bolts and it’s effectively, you want to have a company and a contract that that is favorable for your purposes, and that’s getting multiple touches on the same dollar.
[00:12:55] Seth Hicks Esq.: Moving money, keeping money at. In and out, no tax [00:13:00] consequences, pounds with inside that policy year after year, and at year 7, 8, 9, 10, it starts to really go parabolic as far as values and dividends that are paid. And if you’re putting your money to work in solid investments, those multiple returns on that investment will shine.
[00:13:21] Seth Hicks Esq.: Mm-hmm. Fantastic. That’s good.
[00:13:26] Midroll: Do you see yourself in that story? Do you feel like you are generating a lot of revenue but are not moving forward as fast as you would like? Are you ready for help? Please call private banking strategies at (817) 200-4777 or visit us at www.privatebankingstrategies.com.
[00:13:52] Eric (Host): All right. Number four guys is proper percentages of components.
[00:13:56] Eric (Host): What does that mean?
[00:13:58] Vance Lowe: Well, I have to put that in there, [00:14:00] Eric, because again, out there in the world, people are saying, oh, you need to do it this way. These should be the percentages, and if you’re not, you’re being ripped off. Okay. Again, and I want to discuss that there is a proper procedure, but every individual has a unique situation.
[00:14:20] Vance Lowe: Some individuals, we might go right up front with a modified endowment contract. One that’s, that would be taxed and be traceable because in their needs where in their situation they’re looking for X and that solves it perfectly. Okay? So we don’t rule. Different things out, but to try to entice people in.
[00:14:44] Vance Lowe: And one of the things that we’re hearing that is just, it’s funny, uh, is called the 90 10 rule, and we’re gonna get into that a little later. But we want to have the proper percentage of between base premium and this [00:15:00] paid up editions. Writer is the official word, which is a, the single pay part appropriate.
[00:15:05] Vance Lowe: It’s the best short term and long term. You deviate from that as the norm, then on one end it is gonna suffer a little bit. One of the benefits are, is that when we go over a hundred percent efficiency for every dollar we’re putting in, we’re creating more than a dollar in cash value. Anywhere from a dollar five, a dollar 10, a dollar 20.
[00:15:33] Vance Lowe: So we try to make these accounts. As efficient as possible for we the clients, and I say we, the clients. I have a lot of policies. I have a lot of contracts in this because. Everything I do and the companies I run are all run off of this individual strategy.
[00:15:54] Seth Hicks Esq.: We’re talking about efficiency of your premium dollars and cash value equivalent.
[00:15:59] Seth Hicks Esq.: [00:16:00] So at the beginnings of the policies, it’s a business startup. Eric, as Vance mentioned, that’s the an equivalent concept. And so you’re getting a pretty high return on the dollar that you invest in your new banking business back, and so that value. Then increases year after year, and after a year four or five, six, you’re putting in a dollar and you’re getting back a hundred plus percent.
[00:16:27] Seth Hicks Esq.: And I’ve seen some of the illustrations that are well into the 120, 130%. And that’s what Vance is describing. So you, you know, you put in a hundred thousand dollars just for round math and you’ve got a hundred. 30,000 that year, uh, in cash value. So you could effectively take the 30,000 and put that to work and have the principal still in there and never use that.
[00:16:56] Seth Hicks Esq.: And you’ve got 30,000 in play in an investment [00:17:00] for out, out of thin air, so to speak. Alright,
[00:17:03] Eric (Host): now number five, you say use caution in trying to get the CV too high in the first few years.
[00:17:11] Vance Lowe: One of the things that we mean by that. As many outfits out there try to do a much larger, either a dump in or what’s called a larger amount into the paid up editions writer in year one.
[00:17:31] Vance Lowe: And we can do that up to a point. If somebody sells a business, if someone. Inherits or gets a windfall, we call it. There are definite, uh, strategies and ways to deal with that, but to try to set the contract up so that it creates the most cash value in year one will cause that contract to suffer in later years.[00:18:00]
[00:18:02] Vance Lowe: So we wanna make sure that. We do the correct balance for the situation of each individual. I’m hearing and reading on YouTube and everything that if you’re not getting 90% in cash value in year one, you’re being ripped off. That couldn’t be further from the truth. It that one was set up that way to create year one as a really high cash value.
[00:18:34] Vance Lowe: Well, what happens in year two and in year three, in order to get to that point, we have to add a tremendous amount of expense to the contract, and that has to stay with that contract usually 20 to 30 years. So I put that in there as a caution not to fall prey. Another thing is the [00:19:00] people who do that do not, are not compensated high enough to be able to service and put and implement the services for the, uh, customer that is needed.
[00:19:18] Vance Lowe: And my analogy with that is. If your wife needs brain surgery, are you gonna go find the cheapest brain surgeon out there or the absolute best that’s probably gonna cost you the most?
[00:19:33] Eric (Host): That depends on the day. Vance. I’m just kidding. You know my wife, I’m just kidding. No, of course we’re gonna, we’re gonna get the best we possibly can for the best possible outcome,
[00:19:43] Vance Lowe: and if they’re not in business when you need them, how good is that?
[00:19:47] Vance Lowe: Yeah, true. So there’s a reason for the mix and the things that go through that. A lot of people ask us, how much do you make? How much do you pay? And we [00:20:00] show them exactly when, say, okay, this is the part we’re gonna, we’re gonna pay for our time in this right here. It’s not gonna come out of pocket. Got it.
[00:20:10] Vance Lowe: So it’s important that you do that and that there’s enough there so that the training and the complete setup will carry all the way through. But most of these guys who are out in left field doing these other things don’t set up the banking side anyway. They just sell the policies and it’s absolute horror stories out there.
[00:20:30] Eric (Host): All right. Point six that you have on your list of 10 here. I’m just gonna give a little teaser. It’s actually a question for this one. Is private banking, short term or long term? And I’m assuming you mean as a strategy. And here’s what I’m gonna say. This is what we’re gonna stop the podcast and we’ll just tease the audience with that one.
[00:20:45] Eric (Host): I think most people that have been listening to you guys for a while know the answer to that. I certainly do, but I want a longer explanation. But we don’t have time today. We’re gonna come back with part two with the next five points. Is that okay with you guys? [00:21:00] Absolutely
[00:21:00] Vance Lowe: with me. Yep.
[00:21:01] Eric (Host): Alright, guys, I, I know that you’ve given ’em a lot of food for thought already on these first five points, and folks need to investigate this for themselves.
[00:21:10] Eric (Host): You’ve got a ton of resources. We’ve talked about that on the midroll, the middle of this podcast. But one more time, can you give ’em some contact information, some places to go to get more information and maybe how they can talk to
[00:21:22] Seth Hicks Esq.: you guys. Sure you can find us@privatebankingstrategies.com. That’s private banking strategies.com.
[00:21:30] Seth Hicks Esq.: And there we’ve got tons of resources, Eric, including our free book, we like to call it Red Pill Book, how to Grow Rich with The Secret That Banks Don’t Want You to know. And we’ve got blog resources and all of our podcasts that we’ve produced together and that we’ve been guests on other folks’ shows.
[00:21:47] Seth Hicks Esq.: And you can effectively binge on content until you’re in a place where you know it’s for you and then you schedule an exploratory call with us or decide it’s not. Mm-hmm. For [00:22:00] you. But that’s where you find us and that’s where you can find a ton of resources.
[00:22:04] Eric (Host): Alright. Great stuff. Thank you guys so much for your time.
[00:22:07] Eric (Host): And of course our last thank you goes to you listening. Audience, thank you so much for tuning in and listening to the Private Banking Strategies podcast with Vance Low and Seth Hick. If you have not subscribed to the podcast yet, please click the subscribe Now button below this way. When Vance and Seth come out with a new podcast, it’ll show up directly on your listening device.
[00:22:22] Eric (Host): This makes it really easy to share these podcasts with your friends and family. Again, thanks for listening today. For everyone at Private Banking Strategies, this is Eric Johnson reminding you to live your best day. Every day, and we’ll see you next time.
[00:22:36] Midroll: Did that story feel like it was about you? Do you feel you should be making more progress toward your financial goals?
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