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Flexmethod FAQ's

I’ve always thought buying term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money. Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more. With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated. For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

How does Desert Rose Capital Management fit into the Flexmethod?

Desert Rose Capital management is a Registered Investment Advisor. As such, they are heavily regulated. They have the ability and the mandate to act as a fiduciary on your behalf. They monitor the cash value growth of the policy and administer the financing portion of the Flexmethod which amplifies your returns.

I’ve always been told to buy term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money.

Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more.

With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated.

For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

Life Insurance Principles

I’ve always thought buying term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money. Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more. With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated. For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

What does it mean when a policy is “fully paid up?”

This means you no longer have to pay premiums and the policy is paid for by the cash value.

Who can be a beneficiary of life insurance?

The owner of the policy can name anyone they want as the beneficiary. You also have the option to list a charity as your beneficiary. Some policies allow you to list more than one beneficiary and a percentage for each. You can also change the beneficiary at anytime with prior written notice.

What are accelerated death benefits?

A provision on some policies that allow you to take out a portion of the death benefit if you become terminally ill. This amount will be subtracted from the death benefit that your beneficiaries will receive.

Can I get a life insurance policy on anyone?

Yes, as long as you have insurable interest in them. This means that if they were to die, there would be some financial loss to you (i.e. spouse, children, parent, business partner or employee).

Can I have multiple life insurance policies?

Yes. When you apply for another policy, they will take into account any other policies you have to make sure you can afford the new policy.

I’ve always been told to buy term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money.

Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more.

With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated.

For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

What are the different types of Life Insurance?

Common types of life insurance include:

What makes cash value life insurance a good investment?

Cash value life insurance is an extremely unique asset in the world of investing. There are a few characteristics which separate it from most other investible asset categories.

Below are a few of the defining characteristics of cash value life insuance:

  1. Investment Safety and Stability: As a policy holder, you have a contract with an A+ rated corporation that ensures your investment cannot lose money. Sometimes this is called a 0% loss floor, meaning you cannot have a ‘negative’ return in a given year. Uniquely, cash value life insurance companies are required by state regulation to carry $1 in cash (think checking account accessible cash) for every $1 they have invested in the market. Comparatively banks are required to only carry $0.17 for every $1 they have invested or loaned out.
  2. Guaranteed Rate-of-Return: In guaranteed cash value policies, you are guaranteed a rate-of-return.
  3. Equity Building Asset: Cash value life insurance policies build equity. Unlike term insurance where you are basically ‘renting’ the benefits, with cash value life insurance your benefits are with you for life as long as the policy is in force (read more about how the Flexmethod ensures your policy is always in force).
  4. Crazy Good Tax Benefits: All life insurance policies pay out your beneficiaries TAX FREE. Meaning if you have a $1,000,000 death benefit, at the time of your death your beneficiaries will get $1,000,000 cash. This amount is never taxed.
  5. Income Cash Tax Free: Because your policy is building ‘equity’ you can borrow from the equity (just like a home equity line of credit). Like all loans, the money you take out of your policy always comes out tax free.

There are many more benefits of cash value life insurance when the Flexmethod is applied. Speak to one of our experts today to hear how we can help you build tax free income.

How is whole life (cash value) life Insurance different than term?

An easy way to think about it is that cash value (or whole) life insurance is like owning a house and building equity whereas term life insurance is renting an apartment and not building equity.

Cash value life insurance is a type of permanent life insurance that includes an investment feature. Cash value is the portion of your policy that earns interest and may be available for you to withdraw or borrow against in case of an emergency.

Term insurance is a type of life insurance policy that provides coverage for a certain period of time or a specified “term” of years. If the insured dies during the time period specified in a term policy and the policy is active, a death benefit will be paid.

Term Life

I’ve always thought buying term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money. Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more. With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated. For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

I’ve always been told to buy term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money.

Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more.

With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated.

For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

What are the different types of Life Insurance?

Common types of life insurance include:

Whole Life

I’ve always thought buying term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money. Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more. With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated. For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

I’ve always been told to buy term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money.

Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more.

With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated.

For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

What are the different types of Life Insurance?

Common types of life insurance include:

What makes cash value life insurance a good investment?

Cash value life insurance is an extremely unique asset in the world of investing. There are a few characteristics which separate it from most other investible asset categories.

Below are a few of the defining characteristics of cash value life insuance:

  1. Investment Safety and Stability: As a policy holder, you have a contract with an A+ rated corporation that ensures your investment cannot lose money. Sometimes this is called a 0% loss floor, meaning you cannot have a ‘negative’ return in a given year. Uniquely, cash value life insurance companies are required by state regulation to carry $1 in cash (think checking account accessible cash) for every $1 they have invested in the market. Comparatively banks are required to only carry $0.17 for every $1 they have invested or loaned out.
  2. Guaranteed Rate-of-Return: In guaranteed cash value policies, you are guaranteed a rate-of-return.
  3. Equity Building Asset: Cash value life insurance policies build equity. Unlike term insurance where you are basically ‘renting’ the benefits, with cash value life insurance your benefits are with you for life as long as the policy is in force (read more about how the Flexmethod ensures your policy is always in force).
  4. Crazy Good Tax Benefits: All life insurance policies pay out your beneficiaries TAX FREE. Meaning if you have a $1,000,000 death benefit, at the time of your death your beneficiaries will get $1,000,000 cash. This amount is never taxed.
  5. Income Cash Tax Free: Because your policy is building ‘equity’ you can borrow from the equity (just like a home equity line of credit). Like all loans, the money you take out of your policy always comes out tax free.

There are many more benefits of cash value life insurance when the Flexmethod is applied. Speak to one of our experts today to hear how we can help you build tax free income.

Why Life Insurance

I’ve always thought buying term and investing the rest was the best strategy. Does the Flexmethod change that?

Permanent life insurance, when done right, shouldn’t cost money, it should make you money. Outside of the Flexmethod a whole life policy averages 4.5-5% tax-free BUT ONLY AFTER paying into it for 20 years or more. With the Flexmethod, all of that changes. Expected rates of return are typically double and the time period to reach profitability is greatly reduced, and in many cases eliminated. For this reason we don’t see the Flexmethod being a cost, but instead, a resource; just as we wouldn’t consider putting money in a savings account an expense.

What makes cash value life insurance a good investment?

Cash value life insurance is an extremely unique asset in the world of investing. There are a few characteristics which separate it from most other investible asset categories.

Below are a few of the defining characteristics of cash value life insuance:

  1. Investment Safety and Stability: As a policy holder, you have a contract with an A+ rated corporation that ensures your investment cannot lose money. Sometimes this is called a 0% loss floor, meaning you cannot have a ‘negative’ return in a given year. Uniquely, cash value life insurance companies are required by state regulation to carry $1 in cash (think checking account accessible cash) for every $1 they have invested in the market. Comparatively banks are required to only carry $0.17 for every $1 they have invested or loaned out.
  2. Guaranteed Rate-of-Return: In guaranteed cash value policies, you are guaranteed a rate-of-return.
  3. Equity Building Asset: Cash value life insurance policies build equity. Unlike term insurance where you are basically ‘renting’ the benefits, with cash value life insurance your benefits are with you for life as long as the policy is in force (read more about how the Flexmethod ensures your policy is always in force).
  4. Crazy Good Tax Benefits: All life insurance policies pay out your beneficiaries TAX FREE. Meaning if you have a $1,000,000 death benefit, at the time of your death your beneficiaries will get $1,000,000 cash. This amount is never taxed.
  5. Income Cash Tax Free: Because your policy is building ‘equity’ you can borrow from the equity (just like a home equity line of credit). Like all loans, the money you take out of your policy always comes out tax free.

There are many more benefits of cash value life insurance when the Flexmethod is applied. Speak to one of our experts today to hear how we can help you build tax free income.

Policy Terminology

What does it mean when a policy is “fully paid up?”

This means you no longer have to pay premiums and the policy is paid for by the cash value.

Who can be a beneficiary of life insurance?

The owner of the policy can name anyone they want as the beneficiary. You also have the option to list a charity as your beneficiary. Some policies allow you to list more than one beneficiary and a percentage for each. You can also change the beneficiary at anytime with prior written notice.

What is the underwriting process?

Underwriting is when the insurance company reviews your application and decides to approve, deny, or change your insurance policy (ex: change the health rating).

What are accelerated death benefits?

A provision on some policies that allow you to take out a portion of the death benefit if you become terminally ill. This amount will be subtracted from the death benefit that your beneficiaries will receive.

What is a risk classification?

An insurance risk class is a group of individuals that have similar characteristics, which are used to determine the risk associated with underwriting a new policy and the premium that should be charged for coverage.

There are various classifications used by the insurance carriers which are often established based on a physical exam and requested medical records from the applicants.

What is a Rider?

Riders are the extra benefits that a policyholder can buy to add on to a life insurance policy. The most common include guaranteed insurability, accidental death, waiver of premium, family income benefit, accelerated death benefit, child term, long-term care, and return of premium riders.

What is the Cash Value?

How much the policy is worth while you’re alive; assuming the policy stays in force.

Underwriting Health Exam

What is the underwriting process?

Underwriting is when the insurance company reviews your application and decides to approve, deny, or change your insurance policy (ex: change the health rating).

What if my health improves down the road (i.e. lost weight, stopped smoking, etc.)?

If your health improves, you may be able to be re-evaluated. If instead they discover you would classify into a higher health rate, you would remain in the previously determined category.

How is my health rating determined?

The insurance company will consider your age, gender, family health history, and ask a series of other health questions. If a medical exam is needed, they will take your height, weight, blood pressure, urine sample and blood sample. This information will determine your health class rating.