People often ask me what paid up additions are. When structuring our policies we usually place a large amount of each premium towards the purchase of level paid up additions. These premiums are in addition to the base premium. Why do we do this? What’s the benefit to the policyholder?
Paid up additions are small blocks of paid up death benefit. It’s life insurance that you own free and clear. The additional premiums that are used to buy the LPUA’s also increase the guaranteed cash values because the bulk of the earnings premium, less a small up-front expense, becomes immediate cash value. These values are available for your use right away. Another benefit of level paid up additions is that they are dividend eligible. This means that the more LPUA’s you buy, the greater the potential dividend.
By purchasing LPUA’s we are creating a system for annual cash growth within the policy. The paid up additions buy more death benefit and cash value which increase the dividends. The dividends go towards buying more LPUA’s the following year and the cycle repeats. This system helps streamline the growth of the policy values for years to come.
This is especially important for those who subscribe to the infinite banking concept. By gearing the policy towards maximum cash values and maximum cash accumulation we can front load the cash that’s immediately available for your use.
To find out if your policy is properly structured to maximize cash values and cash accumulation, call me or email me. (775) 781-5464 or Scott@TheBankingSecret.com
Scott Storace
Tags: cash value, infinite banking, life insurance, whole life
