Why do these American entrepreneurs configure life insurance policy accounts? What characteristics do they look for in US cash value life insurance? In other words, what are the advantages and functions of American life insurance? In order to answer these questions, American Life Insurance Guide© conducted an analysis and interpretation in 3 parts.
Flexible mobility
For an entrepreneur, our business may start to grow rapidly at any time, and maintaining this growth requires a lot of financial support. Anyone who does business, whether it is an individual or private owner, a start-up technology company team, or a listed company CEO, VC or PE institution, pays special attention to the liquidity of funds and the degree of control and domination of funds. Most entrepreneurial teams, businessmen, or business owners usually follow the traditional practice of placing the company’s liquidity in a U.S. bank account. The advantage of this is that it can be deposited and withdrawn instantly, but the disadvantage is that U.S. banks The rate of return on deposit interest rates is extremely low.
Especially for Chinese companies or entrepreneurs dealing with business between China and the United States, we still face the following problems in the process of dealing with American banks:
- Age Restrictions
- Credit Check
- Financial Certification Audit
- Anti-money laundering investigation
The story of “How Famous American Entrepreneurs Use Life Insurance Policy Accounts” shared by American Life Insurance Guide© tells us that the assets placed in the lifetime cash value life insurance policy account can avoid the above problems and can be withdrawn from the policy account at any time. Come out and provide liquidity funds for the company’s operations.
In addition to “borrowing” money from our policy account, we can also choose to “draw” only the deposited principal. These two methods have their own advantages and disadvantages. In a good market environment, “borrowing” at a reasonable interest rate can provide better financial returns. The column of American Life Insurance Guide Network© explains this in detail.
It can be said that the life insurance loan terms stipulated by law are the most flexible and friendly loan terms we can find in the market.
The core point is that some excellent American insurance policy products will provide a lifetime fixed loan interest rate of 5%-6% at the time of application. If we go to a commercial bank and ask for a 5%-6% loan interest rate for SMEs…
Security growth
As an entrepreneur or business owner though our main source of income is the business of the company. But there is no need for us to pile up idle cash in bank accounts with low interest rates, and let the bank take our money to help the bank make money for itself. This is not an either-or choice, but a better asset allocation solution.
Certain brands of life insurance accounts allow the assets within your policy to:
• Provides fixed growth between 4%-5% per annum in today’s low interest rate market environment
There are also some brands of life insurance accounts that can also provide us with the opportunity to earn:
• 10%-15% annual income in a bull market environment, 0% guarantee in a bear market environment, against the risk of loss caused by market decline.
No matter what kind of whole life policy insurance, it needs to be professionally designed and configured according to our actual situation. Under reasonable use, even if we have borrowed money from our own policy to inject a liquidity into the business, the cash value of the policy account can still be capitalized in a specific way.
We know that the liquidity of capital is the lifeblood of almost every entrepreneur or entrepreneur. Whether it’s an urgent need for cash between receivables or to fund your company’s next growth plan, our Cash Value Life Policy Account can come to the rescue.
Favourable tax conditions *
The United States is a country with thousands of taxes and tens of thousands of taxes. Ordinary income tax and capital gains tax will take away 15%-55% of the asset appreciation. If we reasonably avoid these situations, it is equivalent to increasing the same benefits.
If we save money in tax-advantaged government plans, such as IRAs, 401(k)s, profit-sharing plans, or retirement plans, then we can reasonably avoid or delay paying these taxes until after retirement. However, if we need to use this fund to provide emergency liquidity before the age of 59.5, we will face a 10% withdrawal penalty.
For an entrepreneur or entrepreneur, locking up the liquidity of his funds before the age of 59.5 may not be a good choice.
If the policy is properly designed, our life insurance policy account is more like an enhanced version of the Roth account, which is not subject to the 59.5-year-old age limit. We cannot use a Roth account if our 2019 household income exceeds $193,000. However, there is no income limit for opening a policy account and depositing and withdrawing from our whole life policy account. In fact, the opposite is true, and we can put more into life insurance policy accounts than the IRS-mandated 2019 contribution limits of $6,000 or $7,500.
At the same time, today is the period when the tax rate in the history of the United States is the lowest. After more than a decade, do we still think that the tax rate will remain so low? If we all agree that future tax rates will definitely return to higher rates, then we need a long-term account that offers the following tax advantages:
- Provides tax-advantaged asset appreciation
- Provide tax-free withdrawal methods, no age restrictions
- Provide tax-free death benefits
The American cash value life insurance policy account is the choice of these well-known entrepreneurs.
Article summary
Doing business and starting a business is a very risky thing for us. Therefore, it is very important to have a safe and reliable asset allocation category and asset liquidity. Although banks have always claimed to be a safe haven for funds, this is not the only option. From the stories shared by the American Life Insurance Guide Network, we can learn from these great entrepreneurs that life insurance, as a better asset allocation The method does exist and is applicable.
*The information in this section does not constitute professional tax advice and should not be used for such purposes. Figures related to taxation are sourced from the IRS website and related information websites. If you have any questions about the contents of this section, please contact your tax, legal or other professional advisors.
