Starting a second policy with IBC
You may have heard me mention “starting your second policy” or “taking out multiple policies over the years.” And you’re probably wondering what that’s all about, right?
“Why would I need a second policy?”
“Are there any advantages/disadvantages to starting a second policy?”
“When should I start thinking about starting a second policy?”
These are all great questions, and I’m happy you’re asking them to the right source. As the proud owner of 19 policies (and counting), it’s safe to say I know a thing or two about what starting a second policy requires and why you would want to do it.
To start off let me just say that you should always start your first policy as if it will be your only one. Yet, you should still make sure you’re comfortable with what you’re depositing. Put the maximum you can comfortably deposit into it from the start. (There are a few factors that dictate how much you can put into your policy, and each situation is different from the next.)
If you don’t put the maximum you can into the policy, then there are two things that will happen:
- Your policy won’t work as efficiently as it would have had you put more money into it.
- You’ll be wishing you put more in almost immediately after you start your policy. The more time that passes, the more severe your regret will become.
Trust me, I’ve been around long enough to see BOTH of these things happen to those who were considering putting more into their policy, but didn’t. That’s not to say you can’t put what you want into the policy. You’re in control. That’s kind of the reason we’re doing this at all, right? So start where you’re comfortable, too.
But if you can put more in, then do so right from the start.
You’re probably wondering why there would be a need to start a second policy if you fund your first well. As life goes on, you may come into a windfall of money, or you may get a promotion and a raise. Your first policy will mature, and your premium amount will naturally drop. This is to avoid your policy becoming a MEC.
Either way, you’re left with more money you need to start cycling through a policy. If your first policy is unable to hold more cash, then starting a new one is the next best option. (To find out how to max out your policy, reach out to your tools team. They will be able to tell you if it’s possible and how much you can get in without making the policy a MEC.)
There are no disadvantages to having a second, third or fourth policy.
There aren’t any disadvantages to having 50 policies! Especially if you’ve maxed out each one before starting a new one and also started each policy at the maximum allowable amount for you at that time.
The point of starting new policies is to get control of your money, remember? Starting new policies is the best way to do that.
If you’re happy with your first and only policy, good for you! You call the shots. There’s absolutely no pressure to start a second if you don’t want to. But if you follow what we do and what we teach, you’re not going to want to pass up the opportunity to start more policies in the future.
The idea is to flow the money you make as income through your policy, then take loans to buy the things you were going to buy anyway. Anything can be bought this way…vacations, houses, cars, groceries, utilities, etc. You want as many of these policies you can get and grow them as long as possible. The older they get the more efficient they become. In year 10 of my policy, when I put in a dollar I immediately get a dollar and fifty four cents back. How cool is that?
There’s no limit to the amount of policies you can start in a specific time frame.
Obviously, if you took my advice before and you funded your first policy at the maximum allowable amount, there probably won’t be an immediate need to start a second one a month or two down the line. But if there was, you would absolutely be able to do so.
With all these reasons to start more policies and get control of more of your money, you can see why it was a no-brainer for me to build up to 19 policies over the years, adding at least 1 new policy each year. I was able to recapture and recycle more of my dollars, keep my money in my family, and build a legacy my children’s children’s children will benefit from decades from now.
When you’re ready to get started on creating your financial legacy or if you have more questions, most questions can be answered by watching this video. Start there and then schedule a consult with my team when you’re ready to begin.
