Will you have to pay taxes on your policy? Great question, I’m glad you asked.
The Money Multiplier Method is all about growing wealth without giving up control. With policy contracts, we can kick Uncle Sam to the curb. Having money that the IRS can’t touch already makes this more valuable money. And here’s why:
First, whole life insurance is not a government plan sanctioned by the IRS.
You’ve gone into business with a life insurance company so it’s all between you and them. And the money that you’re putting into your banking system would be after-tax dollars if it comes from your income.
The income tax system as we know it in the U.S. came into place around 1913, just over 100 years ago. Whole life insurance is over 200 years old. It was in place and working like a charm a century before Uncle Sam started coming after worker’s pay on a regular basis.
Insurance, by definition, is in place to offset a potential loss. So if you wreck your car or break your phone and you have insurance, you don’t pay taxes on the settlement checks or replacement equipment. It’s not income, so there is no need to report any of that.
So here, inside your system, there are no taxes on growth inside of the policy, no taxes on dividends (which can be properly categorized as return of unearned premium), and no taxes on the death benefits (or the loss of life of the insured).
And don’t forget that if the recipient of the settlement has been properly educated on what we teach, they can use the money to keep the system going. Now, you’ve properly transferred the wealth mindset.
Secondly, remember that when we are getting money from our policies, we are teaching loans, not withdrawals.
Withdrawals can be taxed. And for government plans and investments, withdrawals are susceptible. Loans, using the insurance company’s money against your collateralized policy contract, isn’t a withdrawal of any kind.
You can withdraw money from your policy contracts. You can also elect to do so at a certain stage in your life. But that and the effects of those withdrawals are subjects for another article. (Read more about withdrawals vs. loans when it comes to your policy here.)
Can I use the money in my government program to fund my policy?
There are many government programs out there. You may even be currently participating in some of them. But you’ve got to realize that there will be fees or penalties to do what you might call a “rollover” into a banking system.
If you’re interested in taking money from your government plan, there isn’t a way out of the penalties and fees. However, you can do a 1035 Exchange, which is a transfer of other life insurance (an endowment or an annuity) into a new whole life insurance contract with us. If that’s you, we can help!
To learn more about The Money Multiplier or to get started with your own policy where you don’t have to pay taxes, please visit www.TheMoneyMultiplier.com/member-area and watch the presentation that appears.
When you’re ready to get started on creating your financial legacy, or if you have more questions, please email us at [email protected]. You can also give us a call at 386-456-9335, and one of our mentors will be in touch with you.