Wednesday, January 15, 2014

Good Evening, Here's What To Think Today...

Excerpts from the article linked below.

"Many of the products containing the highest levels of contamination turn out to be "USDA certified organic" products, by the way. So the idea that "organic" always means "clean" is utterly false.

Apply your skepticism everywhere: Don't trust politicians who make promises. Don't trust advertising. Nearly all TV advertising is blatantly false and misleading. Nearly all drug advertising is fraudulent. Vaccine promotions are wildly fraudulent and deceptive.

Don't trust conventional doctors. They know almost nothing about nutrition. They are experts in diseases and pharmaceuticals... and little else.

Don't trust any new power grab by any government entity. All government entities seek to expand their power at the expense of your liberty. If you surrender your liberties to them, you will never get those liberties back. Governments routinely conspire to use fear tactics to usurp power from the People."

Thursday, January 9, 2014

Which Life Insurance Company Pays The Highest Dividend Rate?

On the surface, it seems like such a simple and important question.  The dividend rate is a percentage so that must mean you can use it to calculate the rate of return in a policy, right?

Well, not exactly

I've been teaching people about life insurance long enough to fully appreciate that the answer should be as straightforward as the term dividend rate implies.

Not only does every company calculate their "dividend rate" differently but the rate only refers to all dividends that are being paid out to all the policy holders in total. It does not refer to any one policy getting a percentage of premium or cash value or any other measure.  

Furthermore, older policies get larger dividends and newer policies get lower, certain ages get larger dividends and others get lower.  For any one policyholder it is an almost meaningless number. 

Dividends are composed of an investment component, a mortality component, and an expense component.  

To complicate things further, some companies quote gross rates.  Others quote rates that are net of investment expenses only while others quote rates that take additional items into consideration.  

For these reasons, dividend rates should not be the sole reason for comparing life insurance companies or policy performance.  There are other factors I deem more important which I will elaborate on in a future article.

One of the reasons I advise my clients to think long-term when opening an Infinite Banking policy is because it takes time for the dividends to increase in the policy.  The Infinite Banking Concept is not a get rich quick scheme by any means but you can rest assured knowing that the dividend component is just one of many factors that will help you increase your wealth over time.  

To sum up, the dividend rate is not the rate of return on the policy but you will find comfort in knowing that if history is a good indicator for future results, as a policyholder you will continue to receive your dividends without any luck, skill, or guesswork and don't forget,  those dividends will get larger and larger over time.

So if you still wondering who pays the highest dividend rate, please allow me to share with you what Nelson Nash, bestselling author of Becoming Your Own Banker, told me back in 2007 when I asked him what I thought at the time to be a significant question regarding whole life policies.  

He said,"Son, you're majoring in the minors."

With a little explanation I found out just how right he was.  Thank you Nelson.

John A. Montoya
JLM Wealth Strategies, Inc.
(925) 386-6639 Office
Bank On Yourself® Authorized Advisor
IBC® Authorized Practitioner