Retirement Reimagined.
Written By Jared Becker
I have many clients that have maxed out their 401K plans, work for a bank or hedge funds, and are looking to save for retirement. So they take a portion of their bonus and purchase a Kai-Zen plan. This provides them with Permanent Life Insurance (what everyone wants, but no one wants to pay for it), Living Benefit Riders (Chronic Illness, Critical Illness, etc.).
And most people in their 20’s, 30’s, 40’s and some in their 50’s don’t realize how important these riders are and how beneficial they will be in the future.
Everyone wants a Roth IRA and they either don’t qualify, or can only contribute $6,000 annually.
BUT, Kai-Zen provides the same tax-free growth and tax-free withdrawals if funded properly, AND has much greater contribution limits. These same individuals typically think they can earn a greater return in the market, but forget they can’t do this every year until a 2022 happens and the market is down 20%. I try to explain to everyone that this is a diversification and I don’t suggest you put all of your money in one investment.
The Estate Planning Solution.
Written By Jared Becker
Two years ago, I completed a Kai-Zen where my used the strategy as an estate planning tool.
The couple purchased a guaranteed survivorship policy from me for $3M, and their estate increased. So, they came back and asked to purchase another policy. I provided them with the same option to pay $30K for 10 years ($300K) and have another $3M guaranteed survivorship policy… OR they could purchase a Kai-Zen plan on the wife.
She was a few years younger, and females are cheaper when it comes to insurance. The negative was they had to pay $330K (increase of $30K), and had to pay that over 5 years instead of 10 years. The benefits were that they had substantial cash value throughout the policy duration should their circumstances change (Guaranteed policy had minimal cash value).
When the wife was 90 years old, and with them taking no distributions, the death benefit grew to $12M, based on projections. This means that they did not have to come back to me every few years when their estate grew.
The Greatest Wealth Transfer.
Written By Jared Becker
I have completed over 15 cases on children between 18 and 40 years old - where the parents either have trusts already set up for their kids, or they have not utilized their annual gifting.
I have them distribute 5 payments from the trusts or gift the annual exemption to their children and fund Kai-Zen plans on their lives.
This provides their children with permanent life insurance they would likely not purchase, living benefits if they got sick, family protection for their grandchildren, additional retirement funds for their children in this tough world.
And they don’t have to worry about their children burning through the money on unnecessary things, because it is locked up for 15 years until the loan is paid back to the bank.
Kai-Zen Protection.
Written By Jared Becker
I recently completed a case where I met the client 3 years ago and discussed a Kai-Zen plan.
At the time, he did not have the funds, and had a bunch of debt. I suggested he purchase some term insurance with one of the carriers that participate in Kai-Zen. Then, when he is ready, we can convert the term and complete the Kai-Zen plan.
He purchased $2M of 10 year term with a premium of $423 annually. He paid 2 years worth premium, and this year when he got his bonus, he used some to pay off the rest of his debt and we used $30K to fund a Kai-Zen.
It turns out that over the last two years, he was diagnosed with type 1 diabetes and would like not qualify for the necessary Kai-Zen insurance.
But this did not matter - all we had to do was convert the term, and he was able to participate in Kai-Zen.
He thanked me up and down for selling him the term insurance 2 years ago.