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Life Insurance Windbags

Finishing Well / Hans Scheil
The Truth Network Radio
November 30, 2019 8:30 am

Life Insurance Windbags

Finishing Well / Hans Scheil

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November 30, 2019 8:30 am

Ever meet someone who has so much knowledge that they end up sounding like a windbag? Hans and Robby discuss how some consumer activists in the financial industry talk about life insurance and what they get wrong this week on Finishing Well. Life insurance sometimes gets a bad rap - it is too expensive, or a bad investment, or you don’t need it once you retire. Hans goes over where he agrees with these people, like about term insurance, and where he disagrees. People need life insurance in retirement. What is your family going to do when you die? This life insurance money provides immediate cash when needed most - and it is tax free!  

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on CardinalGuide.com for free!

You can contact Hans and Cardinal by emailing hans@cardinalguide.com or calling 919-535-8261. Learn more at CardinalGuide.com.  

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You're listening to the network and TruthNetwork.com welcome to finishing well brought you by Cardinal Certified financial planner belonged to child best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well welcome to finishing well with certified financial planner Hans Schild today. Sort of a fun show calling it life insurance windbags wonder where we get that well you might be familiar in first Corinthians chapter 8 verse three. It actually says that knowledge puffs up, but love builds up and it kinda comes from no there was this moment in the garden of Eden were actually you know we've had a choice to eat from the tree of life to eat from the tree of knowledge. And so you may have known some people like this that have eaten from the tree of knowledge and it doesn't take long, and they begin to sound a bit like a windbag right.well I should say yeah we really don't really want to call out any certain people were this comes into my business is there's there's many people on the radio when imprinted in the news media that are so-called consumer activists are consumer friendly people, and there really many times: life insurance really a bad proposition and calling the people that sell life insurance. You know bad people. Clowns actually yeah and some cases but yet you have the fascinating thing to me is that and I hear something that obviously in I can think of to three people in my life that all my goodness, I wish that they had listened to a good somebody that was offering them life insurance. Interesting that you know the tree of life insurance for Esther Beck but had they actually eaten from that tree to some extent and and and and planned for something for their family. Yet, you know, it would've made a huge difference.

A huge difference.

One of really, really sad things that's going on in my life right now and you know this nonsense, I have a dear friend and he got some been he got some information from a talking head that said, you know if if you get rid of all your assets and you can get into a nursing home in on Medicaid. Just FRE E free and so know he went about. He went about making all his assets go away, so that in the course, you can buy any life insurance eaten by the long-term care insurance because he was going to get this free unfortunately Medicaid and I went to visit him two weeks ago and I wish you could've seen this free Medicaid nursing home that he was in. I mean, they'd they'd literally had him on the ground.

The cushion was on the ground but so that he would fall he was into nothing but a diaper didn't been changed and I don't how many hours and I three times I was there and try to get a nurse come back to change in an and heat you know it was just unbelievable. I called his daughter to talk to her and if you could her cry and scream about the need of the care that is in it. As a result of you know wow if somebody told him, and I knew he had the money three years ago to buy some type of a life insurance policy that would have who to give the money to her is a different bunch of kids right and she was one of them as she was one of them and some of the grandkids and another one of the daughters and letting out on all the money right. Money got gone and there is yeah me just my grandmother used to talk about the poor house right here you want to go to the poorhouse or this is going to put us in the poor house or did you did you have the same experience.

There and so I've always one wondered is the poorhouse really a place so we did a little research on that and the poorhouse used to be a place and there was a place and a lot of counties called the poorhouse and that's where people went when they were out of money and I think that the poorhouse in the modern day is the home shelter and it's a Medicaid nursing home where there is a certain minimum level and least in our society we have people in the streets. We don't have success with her some minimum level of care that's offered by all of us, which is society.

And you've gotten kind of a sad look at what that minimum level of care is a skull that he and there were people that he listened to that when when you think about it you know this person that you're listening to that supposedly has this information about the way to handle this part of your life because as we talked about before the show Hans that this is a this is your coming in for a landing.

Here we want to finish well you know it we don't want our family to be suffering because what you was one thing only I will. He's suffering but his family is really really really suffering and so I don't know that he ever that that was a thought that crossed his mind was wow if I if I go into this type of care. It is really hurt your family. So what these windbags are telling people is stairway from whole life insurance cash value life insurance and by term insurance if you got money to invest put it somewhere else because this whole life insurance is bad and its really sold by clients and you just want to stay away from and it's actually when it's not frame so negatively. As I just did. There's parts of that that are good advice and mean if you're young and in debt and you have a family and your married or even if you're single, buying some term insurance is smart buying a lot of term insurance is smart because it's inexpensive and is going to and or go way up 20 or 30 years from now, but that's the least your problems right now when you're young and in damages or something happens and you die, your family is not can be left in the lurch. So were all for me sell lots of term insurance to people when it's appropriate. Now there's another piece of that whole argument. That is just flawed, it's his. When your house is paid for in your at retirement and you you need life insurance and kids rent got a house graduate from college, which is, like describing you in a financial write it up with. It would terrify me eat enough to not because Tammy would be in a in a tough, tough, tough, tough way if I didn't have life insurance. I just can't even imagine yeah but but they're not telling you this, there telling this to your kids right you know is is that don't buy whole life insurance and for some of the can afford it I will forward but I just if you listen to the words term life versus whole life and what whole life means is it's going to be in force in there for you for your whole life term life insurance is going to be in effect for the term and if you wait to die until after the term the policies not compare right and so it's I find it fascinating that the whole this I would people talk about finances.

This is a place where it seems like windbags abound like it. Honestly, in my opinion it. Religion is where windbags abound people that you know competes Radloff chapter and verse on all sorts of things, but how much did they actually seek for the life that's inside of that and and it's the same thing in the in the financial realm that there's a lot of stuff that they can be studied and understood about that, but then you know selecting somebody to help you with it. That really has your life at hand rather than trying to show that they know a lot yeah and it is if I get back to the windbags which you know a lot of times you just listen to one part of the show or somebody else's. Listen to or maybe they're not on this subject. Every week, but generally there's a whole bunch of folks out there that just stay away from life don't buy that.

Save your money elsewhere and there's some problems in that message and there's some truth in it as well. I think it's you know it's appropriate but there's little pieces. Then in one of them is which comes right into our realm is you don't need life insurance and retirement which you may not need as much life insurance you may not be able to afford as much life insurance but just to say you not can I needed his is is is out there somewhere, but the other interesting thing I found about that when you really study some wealthy people's portfolios is sure they didn't need life insurance they were using life insurance as an investment strategy that was brilliant because they got was somebody that really know what they were doing just recently we have had a mean I think the numbers up to about 10 CPAs that I can identify that have become clients and they've come to us are coming to our world, mainly for Medicare anymore experts of Medicare and we do a lot of marketing around that marketing our expertise and sizes, natural going to bring some CPAs into our world and then we invariably start talking about the tax effect of Medicare and Social Security and so they just, come right into our whole deal and we had some of the CPAs by extremely large life insurance policies which are really designed for the investment of fact. But even though design for that. There is these policies may be paying often as husband and wife. I write have have life insurance amine. They may die sooner than they think and set so that thereby life insurance for the death benefit with the logic behind the whole thing is is were managing their money to so they decided there and use us for that and they've got large amounts of money and were helping them meet their objectives and somewhere in there they decided to to make a substantial plan, life insurance, in which it would give the CPA that seeing the wisdom in this. That's one of the reasons I'm talking about today is even though this is substantial when you bring this down to the real world, which is most of us. The just have a little bit of savings put together and a Social Security check makes just as much sense for us as it did for them to have some amount of life insurance that's going to be in effect on the day you die, which has a lot to do with actually just sitting down and planning taken a look at what to get a look like when I die for my family. What you look like if I go into long-term care needs those kind of things. But today's chapter that were talking about his life insurance. As you might've guessed which you can find in the book the complete cardinal guide to planning for living in retirement. You can go to cardinal guide.com and click on that tab and of the seven worries tab get the whole chapter on life insurance absolutely in a no charge. You just download right there from your computer or you don't email Hans and you send me an email on our website.

A Col. guide.com and my associate Tim Mackenzie will send you out a book all you do is ask for. Give us your address and will send you out the paperwork we can email you the digital book American church you know it. Again, the idea being that this is just a subject very much worth discussing today. Life insurance will be right back with our own version of when bagging Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group.

Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to cardinal guide.com and contact Tom to schedule a live recording of finishing well at your church Christian or civic group. Contact Tom to cardinal guide.com that's cardinal guide.com welcome back to finishing well, a certified financial planner Hans Schild. Today's show is life insurance windbags. The idea being again for first Corinthians chapter 8 were you know Paul pointed out that you know knowledge puffs up and in love builds up and and the idea being, or we can eat at the tree life, especially when we talk about from the Bible, we can eat at the tree of life word knowledge is something it's actually intimate. It's a beautiful thing when you think about it that to know somebody biblically is the life you have a baby so we talk about intimacy and and I think that it's it is a completely appropriate thing that true knowledge from somebody that's trying to help you is a very intimate thing and and it ended its sacred right when your underwriters learn about somebody's last days on this earth, how their families can be taken care of and all the stuff I mean this isn't something that anybody needs to look at lightly and this is this is Mike this is my family and there and they're going to need this situation and what is this can look like and doesn't this and I would just in my own mind take a priority in my life that I really need to take a long hard look at it was somebody knows what to do well and I see I don't think that these windbags have evil intent.

All they're trying to do good just like his return. And I think that they just basically don't understand all the implications of this, and insist to me. Life insurance is only good if it's in force in the day.I mean just because if it's if it's something that ended years ago because you can afford it or because it was term insurance and they would let you have it and then you die.

Later it's of no good to anybody and the flipside of that is assisted.

It's a miracle. People have this life insurance and when they die. There's this large check ins can be large to somebody even if it's just $10,000 made out to beneficiary and that money gets settled very very quickly from the life insurance company and it doesn't have anything to do with the will that completely bypasses probate and so it's a way that you can provide for necessary money for your family or your spouse, your kids, even with simple things like burying you and paying for a funeral and paying the attorney to settle things giving some running money I mean is that they're going to have your house is still standing and it needs to be dealt with some is go pay the bills.

There are some is going to pay the power bill in the water bill and pay somebody to mow the lawn. That kind of thing life insurance just creates that immediate sum of money for the beneficiary to do what they find is necessary now in your book points out that that's since 1926 yeah hopefully that means pretty going to put this in my book where I look for the oldest tax return I could find and I was really looking for in that how long this is been in the tax law and I think it was before this 1926 tax return that's on page 9495 my book and it has the instructions for filing your tax return are part of the tax return.

Back in 1926, of Sedona.

They should fit it all was two pages, but in a yeah that's it and and services items exempt from tax and inset amounts rendered under a life insurance contract paid by reason of the death of the insured so you know what I was looking for is. I know that in today's day and time and full time I've been in the business which is 43 years when a beneficiary gets a settlement or they get a check from a life insurance policy.

There's no taxes due on and so just about a month ago.

I'm sitting with a CPA and I'm telling in this. He's like your kidney and I'm looking at him like you're kidding me, mean you're a CPA and you been one for your whole life and you didn't know this simple basic fact that's been in the tax code for years and is just now make sense is that most people die when the real old and they're knocking to be calm and their CPA up when they get this check for $300,000 And he's not going to be sitting there at the table with them, or them coming to advice he did not know that.

Then I surveyed a couple other CPAs that I have his clients and I said I got quiet about tell me the tax effects, you know, I'm just you know when somebody gets alive. I acted like I didn't know and I'm telling you they didn't know either, so this is kind of a minimal want to know what was the Yeah will then when the second guy when it when I got in their savants want tell you there. There are exempt. I do know and it's totally exempt, and he said what's the It's gonna be a Now he flipped all way over the other side is that there is no As much life insurance policy must life insurance is the company recently.

That's the And then this gentleman just bought on he and his wife in excess of $1 million worth of whole life insurance and he bought the most expensive policy we could write on every single why would you want to do that if your CPA why wouldn't you want to shop around and get the least expensive policy well I can tell you why, because he wants to stuff as much money as he can in their into this million dollar policy and you can do that by going to the most conservative, most expensive life insurance policy you can get which we found foreign from a mutual insurance company to clarify that the listener expensive doesn't mean expensive and fees what what you're talking about is your pain these premiums in order to pump money into the policy to write, write. One of the largest premium so you know, or we certainly want to pick from among the large Chrissy was the stuff the most amount of money that he can get in there and see when you have a mutual company.

They credited back in dividends of these these real conservative assumptions of farce interest in as far as the life insurance charges were predicting the amount of people that are going to die, they can make those as conservative as they can, and that makes the premium high again CPA blindness and study and then they have this dividend history so then they credited back in dividends and so he has a safety net. There, that if he wants to get to this money he can get at it tax-free so as both a tax shelter and it's just a darn good investment data and further the average guy like me who obviously wasn't trying to stick hundred thousand authors but you know, one of the hybrid things to this is is I don't want to end up like my friend on the floor with my family does broken hearted is that you can put a writer in their right about this instead of long-term care insurance because now they both have this million dollars that their death benefit which you can access. Currently, if he needs long-term care. So if either one of them needs long-term care and that's tax-free early. By the way, so they're probably not can I need $200,000 a year to pay for long-term care but they could get $200,000 for five years under this policy, tax-free. So maybe they only need 100,000 so there can only take 100,000. But since it's so just that's another benefit of life insurance in the modern policies is youth. They can replace long-term care insurance where you can access your death benefit while you still living to pay for costs of long-term care right which gets back to this inner intimacy from my standpoint of light.

Wow, here comes this part in your life that it seems to me really is well worth the time to go. What is it gonna look like if Tammy goes down. What is it you look like if Robbie goes down. What is it looks like if Tammy dies what is it look like it probably dies what is it looks like and what what steps are in place and what forms were in place and all those things and do you want to talk about that with somebody that you know well I mean it is less pretty intimate stuff will yeah and you want somebody who's a fiduciary that has your best interests at heart. So what I want to accomplish on this show is to give you. Perhaps an alternative opinion that don't believe everything you hear in the sense that there are some very worthy causes. Important needs for life insurance and there some policies that perform extremely well and these can be brought down for the common person you know a couple hundred bucks a month stuffed into a life insurance policy is wonderful and in those people that use their minimum distributions out of their life insurance to ashes me out of their IRA to stuff it into life insurance and pay a life insurance group policy that they buy it. 65. 70 years old this great options out there, because here you got this new gonna take this money out of your IRA or the taxes are going up this huge penalty and people that say they don't need it.

They don't need the money. Well okay will then you want to save it where you save it and how do you get the return stuff it into life insurance is one option, and then that life insurance can give you both a long-term care benefit.

They can give you a death benefit to pass on to your heirs, tax-free, and it can also be cash value available to you if you want to rot withdrawn out during your lifetime. If you get in your 80s and for some reason need money and it's been accumulating tax-deferred there.

There's all kinds of options opinion if you want to call me up and talk to me. I'll be glad individually to see if one of these is suitable for you and then, perhaps, to give you some more information on the subject, but also know from my standpoint.

I mean, when you really like him to sit down with you and go in with sienna my life to look like and how can we plan this out on so it makes sense for my family that that's that's exactly what our objective is not to say a life insurance policy or annuity or to manage your money or to sell your Medicare supplement. We want to look at the whole thing and try to prepare for good outcomes of bad things happen to. That's why the name of the show is finishing well but if you become over that that when the idea is that oh wow. There's also simplification implications to the kingdom for these things and and and and what is that look like for your church and and what is it look like for the ministries which are involved in, or that you supported over the years so again were so excited you turned in today. All this information to courses available in Hans's book the complete cardinal guide to planning for and living in retirement. If they are cardinal guide.com don't forget the guide after the Cardinal and then put.com and then you'll see the cemetery stabbing that the PDF absently free or the book email Hans to find a way to get connected.

Because this would be time and and and and things that that that really will help you know if actually for your posterity for generations to our website look around. Cardinal guide.com you can even listen to the show through the website. So if you're listen to it on your own time you go back to iTunes and subscribe now to the finishing well podcasts, was the past episodes all that information's out there, absently free, because again it is. It is your heart. It has been ever since I've known you to to get this information out there, because we just don't want to see somebody else lime on the floor with it than that, you know that that poor family suffering. You know, as a result of that start.

Thank you for listen. Thanks. We hope you enjoyed finishing well brought you by Cardinal guide.com visit cardinal guide.com for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as constant best-selling book, the complete cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows what to get Hans book go to Cardinal guide.com if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word. Once again that's Cardinal guide.com Cardinal guide.com


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