God’s View on Life Insurance

You're listening to the Truth Network and TruthNetwork.com. Welcome to finishing well brought to you by Cardinal guy.com certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well for over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well welcome to finishing well here how fun today's show is God's view on life insurance. Well, if you've ever considered that concept but I think Paul did eat eat eat talked about it a lot. In Ephesians 1 that that we should have an inheritance and when you think about this term that I learned actually from Hans today I ever heard about it. It's called insurer built-up with insurable interest, insurable interest, so, and the idea behind insurable interest in all of apply this to what God's view on life insurance and second, but tell the listers what insurable interest is I've never heard of. Yeah it's it's really not a consumer term so much as it is for people that are professionals in the life insurance business in order to purchase a life insurance policy are in order for me to write a policy I need to demonstrate an insurable interest that the beneficiary has in the insured so that if this person dies that this isn't just a windfall for the beneficiary isolate with palms told me was that if I was to buy life insurance policy I could make Hans my beneficiary because there is no insurable interest is no connection there. I could make my dog my my beneficiary because it would be no insurable interest, and so as I start a process that I thought oh my goodness we have this unbelievable life insurance policies are Christians and God made the payment on me talk about some premiums hit the premium on that was actually a son's life, but the insurable interest is you I mean that's how much evil beneficiary.

He love you. You're right yeah right it's like he made us the beneficiary and working at such an inheritance is like this.

It is just absolutely unbelievable and and is Hans was described in this to me and I love sales you know be a car salesman my whole life was that when he was taught early on and in some life insurance at one of the first questions that you want to ask because this is what the whole deal is. Who is the beneficiary going to be on yeah and when I when I do the second edition of my book which I'm in the process of doing to start with beneficiaries and just defining it, talking about what it is what it means the different terms associated with that because I think when you're purchasing life insurance you need to start with the end mean and then said that the end is his axis thing for what you know who you love who is going to need money and how long are they going to need it. If you were to die seven at John Eldridge said this and I think it's profound that one of the most important things you'll ever hear God say about human beings. He wrote the very first thing he said when God made us he made us in his image, meaning that we reflect God's heart and and so when you think about God's heart that you would have an inheritance like no wonder no one. I want to make sure that my wife and kids are going to be okay or my grandkids or my posterity is in a God set up the ultimate life insurance.

I mean, you think about Jesus's life and inspect it if it needs anything you could ever imagine. But, but, truly, when you're sitting down with the client and their talking about this.

This is a real opportunity for them to to reflect God, and what they're doing will yeah I mean so you have a need with life insurance so you have a young widow or widower when you have a young couple in the breadwinner or their both breadwinners and one of them passes away. That's the simplest and clearest need, especially if they have children. But even if they don't, that there is a need for money and there's a need for money quickly. This can provide some security and put food on the table and allow life to go on if there's children and we have a need for education. We have just it it it's real simple around that basic need.

When you have an older couple. The lot of them said we don't need life insurance. I mean the smaller of the two Social Security checks goes away when the first one dies okay and so will talk about Social Security later but people even when they're up there in years, and there in retirement or their very much up there in the years when a person dies, the survivors need money and they need quickly.

It may not be as much money as that young couple that I described in the beginning but that's more focused around the need for life insurance and I think that everybody needs some now we can move on to a desire because you don't necessarily have to need the life insurance and my grandchildren are not going to need an education and I can and need money for education in the sense of the likely need food and they need close on their back when there young, they are going to need an education but they don't necessarily need me to pay for it. As it ran and so what would Anna say is I have a desire to be there for my grandchildren as I was for my children and pay for their education and really support that.

So most affluent people that I know and wealthy people that I know and I've done work with their loss, life insurance, and just people that have the means they own life insurance because we can we can make all kinds of logical reasons and tax reasons and transfer and is just life insurance is a wonderful product and it gets it gets beat up in the media quite a bit. I mean there are too many people out there bring in the horn for life insurance is perhaps I'm doing today.

For every one person like me there's 50 people talking. This is a lousy deal. The life insurance companies are taking advantage of you.

So what today's lesson really is about is about beneficiaries who are your beneficiaries who is your beneficiary how much are they going to need when you die and you can say well I got that much in the bank.

Yeah go down to the bank after a person dies and try to get access to that money. I made sure can be set up that way but with a life insurance beneficiary has no standing with the life insurance company while the insured is live. So in other words, where the beneficiary is rich I'm assuming is your wife on your life insurance.

She has no standing with life.

She could call him up she has no standing after you die. She has total standing, so it it it's a thing that happens immediately after death and that monies can get to her very quickly. The beautiful thing is that from my standpoint me in a look back to the heart of God and he's he's wanting to take care of us. He's made all sorts of ways for us to be able to do that in Christ and and and ways to love one another well then you know this is a way that you can reflect your love for the church right because that is your tell me of the church is an insurable interest for everybody. Yeah, the charity is there and except that the insurance companies can accept that as a as a as a beneficiary that has an insurable interest in you. So and life insurance is a wonderful way to leave money to the church now or the Jesus labor loved the same after it's a charity but but you know that's an insurable interest and so it's it's fascinating to me. The things that you that you can demonstrate that you truly do you know want to provide for after your death. You know, and in the as you point out to me when I was looking at and of some of the payouts and on the policies that you are showing. It truly is a miracle that the insurance companies are not pay out a great deal more than they take in, and many many many case sure there but in the scheme of things they don't pay out more than they take in or they would be in business so insurance companies not take care of themselves and they know how to predict and charge and invest in you know, that's it.

That's a whole area that you know you don't really need to concern yourself with. I concern myself with these companies are all rated and I'm looking at everything they do with this particular case were to talk about this one in the second part of the show is just mean. Didn't these people that are 70 1/2 7269 7172 and they've got an IRA money sitting there and they obviously they haven't taken anything out of it and now they have to through the minimum distributions and they usually are coming to me because they want to learn about that or their reading and they want my advice is like limited and I always ask him. So what's the money for lies does not mean we submit we go down to know the ABCs and we just week we get down to basic things in when I dig up. I don't know well it presumed is for your retirement.

But you're not using it for your retirement because you win the left at all in there till your 70 7172 and you would be dealing with the government is now making you take money out. So what's the money for.

And then when we dig deeper. The money is to leave their kids to leave Thursday okay and then when they talk to me a little bit further, we say, do, do you realize the tax liability that you're setting up for your kids and then we dig into that and that's where I to see our businesses just blossoming. I have these people that are in that low 70s, age bracket that are buying substantial life insurance policies basically to leave a real tax-free inheritance to their children and grandchildren right on it and so your listing to finishing well, a certified financial planner haunts out his book the complete cargo book guide to planning for living in retirement, which has a whole chapter on the subject of life insurance on the seven worries tabs@thewebsitecargoguide.com but again the order the book you all you really gotta do is just email Hans we can get a free PDF of the chapter were about today@cargillguide.com's only come back working to dig into that a little bit more of you know what is God's you know if you ever really thought about the fact that you want to be generous with your family because of how God and he talked about the life insurance policy only know my goodness here in Christ, Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to Carbonite.com and contact Tom to schedule a live recording of finishing well your church Christian or civic group.

Contact time that Cardinal guide.com that's Cardinal guide.com welcome back to finishing well with certified financial planner Hans Schild is brought you by Cardinal guide Cardinal guide.com.

Today's show is on as ever thought about God's heart towards life insurance is certainly has me covered diamond better than good hand. So we've been talking about now. Now days, life insurance is something to think about because of IRAs. It's it's something to think about because of taxes and and you really have a study for us here and some of things that you work with recently. Yeah me� Let's take the gentleman that I mean again tomorrow morning. He's a client, they have Medicare supplement insurance with us. Talk to him about this a couple years ago.

He 71. She 69 and you know he is interested in this because he loves his daughters say will he's just facing minimum distributions.

He doesn't need his IRA money is just learned that HTTP secure act is moving in two years out that he doesn't have to take a minimum distribution and then this coronavirus actor, the cares act is gotten rid of all the minimum distributions for 2020 if you knew that will keep talking about that, but nonetheless he still is sitting here looking at this. I asked him those questions like what some money for where you have this in the just the money is to lead to his daughters and when I pointed out the tax liability in that house children are going to be probably withdrawing that IRA. Is there any need the money. When he passes away into the disk and take it out have to pay taxes so the whole motivation for this life insurance is to create 1/2 $1 million of life insurance that's gonna pay the taxes when both he and his wife is gone, because if he dies first, he's the IRA owner's wife is the beneficiary and then she'll do minimum distributions, but ultimately Mr. can be a lot of money left in that IRA.

When the second one of them dies and there's a big tax liability and so he looked through this and for $13,000 just a little less than $13,000 a year.

We are able to write a $500,000 life insurance policy on them that pays off with the second death. So this is survivorship second to die life insurance and it doesn't matter when that happens, and that money is going to go directly to the daughters of his two daughters tax-free. Sorry.

My understanding it on mother's fastest let's get a bank is he actually taking distributions out of the IRA to pay the that the premiums on the insurance sure right so that essentially this is not affecting his in a regular income and sprays taken money they can because he didn't like he has to though actually he has minimum distribution so that he would in this year he would in this year so he is gonna take distributions this year, regardless fact that he would have to use us distributions to pay on this policy. However you as you are pointing out his policy is his IRA is still going to be massive you know, probably at the point was that yet in a better strategy, since he doesn't need the money to me for him. He has would be to set up a life insurance policy like this, but perhaps the pay $50,000 a year into it for just seven, eight, nine years and there's a number I'm just Bolognese on my head. But there's a number instead of paying for life 13,000 a year. He could put $50,000 a year into this and you have to pull out about 80 or 90 wave well past the minimum distribution of the IRA city would effectively drain the IRA he could buy a much bigger life insurance policy to replace the IRA.

That's just the taxes but to replace the IRA and then his kids begin tax-free money when they die, and more. Yeah me is set so say that is a whole Lotta ways to solve this, we may get there with him eventually. But it's a question of people inherently are knocking to trust life insurance companies and life insurance strategies as they've been taught not to end a little bit of that guard so about all he's going to go for his 13 grand a year and he certainly got the money and you bring up the point that the monies they are consistent distributions from the IRA, as opposed to just sitting there. He's just doing this at the minimum, but my guess is it's over time as he sees this, I have another client is a very similar situation similar ages and he's got more money in his IRA than that and he's going to go with that kind of strategy not unto lies but just on him.

So that is spouse first is going to get this tax-free benefit when he dies she she lives longer than him, but ultimately this monies can end up going to the kids tax-free is what it really boils down to Sabrina by like $1 million policy on him and were going to have a premium of almost 90 grand a year on that that ends in 10 years right so that it is fascinating to me to go back a little bit that the strategy started with what's his money for ego. Here's heirs at the million dollars and this in an IRA and you originally were in use for it, you clearly don't need that at this point in time, what, what's a long-term plan allow. I want my kids to have it all. If you want your kids to have it let me show you. You know, I know if you if you if you listen and and and and and think about you know what kind of resources you have and how you can leverage those for the maximum benefit of your kids and only you can give your kids all that and then give the church another 20 in a 250 let you know or wherever you wanted to go the extra for great grandkids or whatever you want to do it really just makes sense to plan to do tax planning retirement planning, estate planning and these are all terms that we throw around in their to some degree.

All the same thing but were just talking about different stages of life. Retirement planning is so that both of the claims therein. Retirement and in his retirement planning.

He'd spend in his IRA money and now the government is forcing them to do that and then there forcing them to pull it out and pay the taxes and he's going to keep that is a minimum and then now looking at it who's it really for his his kids who loves and even needed so that's who it's for. And so now when we say okay is going to go to them. You can be handed them. It is really attacked by this is going to blow up at some point.

Who knows what tax rates are to be 20 years from now.

I may not sufficiently keep stimulating sure I could tell you this right now is kids 20 years are going to be 55, 60 years old and when they're confronted with the choice of them. I got spread out this inheritance and be smart about taxes, oregano, take it all in a lump sum now because I needed you know, at that age they're probably gonna take it all in lump sum and just take a big tax so he loves his children he wants to plan for this in his grandchildren and buying life insurance and doing a bit of a drain on the IRA paying for data that just makes sense as moving money from one place to another and improving his tax situation and how quickly the money be paid so the other story that you have on this, which really is is talk about how heart charts reflect God's heart on on being generous towards the people that we love was a man that you dealt with.

Actually I met him in church. I make a presentation. The church he waits through the whole thing comes up to me afterward say he's got about 25 grand in the bank anyone to know where he got Investec as it would make much of the bank and I listen to them for a while and I said, you know, the issue is not the investment on the 20 immune if you make 10% on that you make 2500 bucks and you have pay taxes on it. This is going nowhere.

It sounds to me like you need life insurance and then he said to me well in the reason he needed to get a good investment is he is a several pensions so this is a good thing done have a lot of savings, but his military pensions have no survivor benefits so you know he's got this $2000 a month coming in and he just built a new house in retirement and want to make sure that if he dies his wife can stay in their he's in my book. The stories in my book. I was just dealing with them this morning and yesterday talking to them because the premiums do like seven or eight years later and this guy has had a fib. He's got type II diabetes and he was 75. 76ers always allocated to 83 years old and I'm just making sure that premium gets paid so was he when you originally told him this life insurance.

I could not qualify Tony's design. I can't qualify for life insurance and I told him I said so you know you're telling me you can't qualify for life insurance. I told them that I just shut up and that he he he he just listen to me for a good while we become good friends have helped them in the food bank through his church and sent my guys over there. We become very good friends. He's got $100,000 life insurance but which is people would say is expensive it's knowing Pam to pay $7700, but he saves that $24,000 military pension every year just for that purpose. And then he pays the $7600 bill in made sure that his kids will do it if you get sick, and he knows he has me watching it, but it's just a wonderful thing and it is his wife is going to be able to continue to make the mortgage payments. You know that's the thing that I really love about this show is that I personally would never have guessed or ever even thought about or considered, you know why life insurance is a good investment strategy. Now that I'm in my 60 187. I needed to do when you know a network when I was still raising a family night and all those kind of things. But now, when you look at it and you think, wow what a cool opportunity to leave an inheritance for my for the things I love it it it it could be for the church or for my ministry or could be for all sorts of things as long as it's got this term insurable interest right hunt. If I can get people thinking about if I can do this with the listers today if I can get you thinking about the term beneficiary who is your beneficiary who are your beneficiaries what are their needs. What are your desires for them and life insurance is a it's a miracle is certainly lower.

Talk about beneficiaries is a good time to check some off your list like you have life insurance policies you have IRAs you have bank accounts. You have a lot of things already have down up beneficiary listed your IRAs. This is a good time to put on your list like is that current right they need to be checked regularly. We do that as a service for people you know anybody if you want to call me up.

I'll be glad to help you with this note, I'm up. I got lots of stories that we could go over over. This wasn't taken care of somebody dies and it's a mess.

After the diamond. Sometimes the money goes to the wrong person that something to check. So thank you for listing again is brought you by Cardinal Guy. Don't forget that guide after Cardinal.com you can find out all this information even get on his book the complete Cardinal guide to planning for living in retirement. Thanks for joining us today. Thanks.

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