Direct recognition vs. non-direct recognition is one of the most confusing and misunderstood subjects when it comes to using Whole Life insurance for infinite banking. Early on in this video we give you an easy trick to understanding and remembering the difference between direct vs. non-direct recognition.
Then we delve into the top 4 misunderstood myths with direct vs. non-direct recognition companies. After that, we take a deep dive into analyzing the effect on whole life dividends when using a direct vs. non-direct recognition for infinite banking loans.
Last, we show a clever workaround called “synthetic non-direct recognition”, where you can boost direct recognition dividends and lower your loan rate for both direct or non-direct recognition companies.
Timestamps (click to jump to different sections of this video):
0:10 – Easy way to remember the difference between Direct vs. Non-Direct Recognition
0:38 – Busting myth #1 that “Non-Direct Recognition must be better than Direct Recognition
1:48 – Busting myth #2 that “Direct recognition dividends on loaned money are ALWAYS lower than dividends on non-loaned money.”
2:59 – Busting myth # 3 that “My Whole Life policy will perform better if I use the policy loan than if I don’t use the policy loan.”
3:50 – Busting myth # 4 that “I will be borrowing against most of my cash value most of the time.”
5:00 – Parameters used in the infinite banking case study comparing the best direct vs. non-direct recognition companies
6:22 – Showing the effect of loans against direct recognition dividends vs. non-direct recognition dividends during the banking phase
8:08 – Seeing the difference between direct recognition dividends with and without loans against them
8:48 – Fast forwarding the same policy into retirement and looking at total performance and the effect of direct and non-direct recognition dividends
10:11 – In spite of suppressed direct recognition dividends they have more cash surrender value in the direct vs. non-direct recognition comparisons.
10:51 – How to remove the suppression of direct recognition dividends and lower the loan rate for both direct and non-direct recognition companies.
12:34 – Addressing common concerns and fears of using an outside lender rather than the policy loan
13:15 – Increasing retirement loans using the synthetic-non-direct recognition loan, which entitles the direct recognition policyholder to the bigger non-loaned dividends
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