The power of life insurance goes beyond the payments and the death benefits. Certain Life Insurance plans can be like the Swiss Army Knife of Personal Finance. Certain life insurance plans are the Ultimate College Savings Plan, the Ultimate Retirement Plan, and the Ultimate Savings Plan. It is used to finance buy-sell agreements within the business, it is used in Supplemental Employees Retirement Plans and Executive Bonus Plans.
Life Insurance is the biggest asset that any bank owns. If you look at the financial statement of any bank you will see that between mortgages, loans, buildings, and real estate, Life Insurance is the bank’s biggest asset. This type of investment saving has been originally used as the key to creating Generational Wealth.
Generation Wealth is simply passing assets down from generation to generation. The Ford family is a prime example of Generational Wealth. Ford Motor Company stock and wealth are passed down from generation to generation. The same strategy can be done with life insurance.
The key to building generational Wealth with Life Insurance is having the life insurance policy on everyone being owned by the trust. So when someone dies that money goes into the trust. The Trust can then continue to make payments on new policies for the family, and the family can borrow against the cash value of the policy, but those loans should only be used to buy businesses or create investments.