We've structured our strategy to have the best risk-to-reward profile of any investment we know. With a focus on providing safety comparable to a 30-day CD, the strategy provides additional safety benefits plus returns that exceed most all other asset classes. It's really quite simple, we apply leverage to an asset that is guaranteed never to go down value and that pays a dividend in excess of borrowing costs. While simple in concept, we optimize the structure with our sophisticated financial modeling software to maximize your return on investment and death benefit. In a nutshell, we've adopted and perfected the banking strategy of borrowing money at low rates to invest in assets paying higher rates. But, rather than being exposed to the default-risks found in car, home, real estate, and business loans made by banks, we've eliminated default risk by investing in an asset issued by an A+ credit-rated institution that guarantees the cash-value will never to go down in value and has a 150+ year history of paying its dividends. 

 

By treating their Whole Life Insurance Policy as their own bank, Financial Reason's clients make money off the banks rather than the banks making money off them. With no risk!

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With 8 years in operation and over $100 million strategically invested to date, we've proven the value of our insightful approach to the ultimate financial structure

At its foundation, our strategy utilizes the unique characteristics of Whole Life policies from select A+ rated insurance carriers, which have fulfilled their guarantee of no decline in Cash-Values, paid their guaranteed dividends, and paid their promised death benefits since before the Civil War. The Financial Reason team developed a proprietary software modeling tool that allows us to design optimal Whole Life policy structures and borrowing strategies that amplify both the dividend and death benefits of these policies without increasing their risk. Rather than one Whole Life policy structure that fits all, our software optimizes structures based on the attributes and needs of each individual client. Following is a brief description of our strategy's attributes and benefits.

 

Optimizing Policy Structure

The Financial Reason team and each client work together to design the client's optimal policy structure, which includes the number of annual premiums to be paid, the dollar-amount and "structure" of the annual premiums, and the policies to be utilized. The "structure" of the policy premiums refers to the relative dollar amounts of the total premium that go toward the "Insurance-Premium" portion and the "Cash-Value" portion. While uniquely structured for each client, the largest portion of each premium payment goes to funding of the policy's Cash-Value, which is generally equivalent to the "bank-account balance" within the policy. Once initiated by payment of the first premium, the policy's Cash-Value continuously grows with each quarterly dividend payment received and fully supports borrowing to pay all future premium payments.

 

Deposit of Initial Premium Allows Leveraging of Future Premium Payments

Once the policy terms are established and accepted by the carrier, the policy-holder makes the first premium deposit out of pocket, which funds the initial policy portfolio's Cash-Value (your new bank account balance).  With the A+ rated carrier's guarantee of no decline in the policy Cash-Value, affiliate banks readily issue a Line of Credit (LOC) collateralized by the policy's continuously growing Cash-Value to pay all future premiums of the policy owner.  Along with the LOC, the policy-holder is provided a checking account that operates much like a home-equity LOC. The Financial Reason team's software expertly crafts the policy structure and borrowing strategy such that growth of the Cash-Value after the first premium payment will support payment of all future premiums from your LOC. The policy holder can therefore simply write checks against the LOC to pay future premiums and otherwise use as the policy- holder best determines. 

 

Dividend Earnings Exceed Borrowing Cost

Of great importance is the difference between the dividend-rate earned from the policy and the interest-rate charged by the bank. Dividends paid by our select carriers are based on their investment of the policy funds in their expertly managed portfolio of bonds and other income generating assets that is actuarially matched with the carrier's projected death benefit payments. Historic analysis shows that the dividend rates paid by select A+ rated carriers consistently exceed average-grade, medium/long term bonds yields. In contrast, given the high credit rating of our preferred carriers and their guarantee that the collateralized cash-value will never decline in value, policy-holders are able to borrow at high-grade, short-term rates that generally equate to a rate of Prime minus 1.5%. Historical analysis of interest rate yields of varying qualities and terms shows that the dividend rates paid by our carriers will typically exceed the cost of borrowing by +/- 3%, providing a very significant margin for gain from the leverage. In the rare instance short-term rates might exceed dividend rates, policy holders can easily swap their bank loans for a carrier “wash-loan” in which the interest cost equals their dividend rate. When rates normalize, the carrier loan is then replaced with a bank loan.

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No Decline in Value Provides Safe Leverage

With leverage, it's the potential decline in the value of the leveraged asset compared to the associated debt that creates risk. With the carriers' guarantee of no decline in cash-value, and built-in assurances you will not pay more in interest than you earn in dividends, the leverage in our strategy does not result in the risks associated with leverage of homes, businesses, real estate, bonds, stocks, and other more speculative investments.

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Perfecting the Banking Strategy to Allow Clients to Become Their Own Bank

In a nutshell, we've adopted and perfected the banking strategy of borrowing money at low rates to

invest in assets paying higher rates. But, rather than being exposed to the default-risks found in car, home, and business loans made by banks, we've eliminated such risk exposure by investing in an asset issued by an A+ credit-rated institution that guarantees the cash-value will never to go down in value and has a 150+ year history of paying its dividends. Financial Reason's clients now make money off the banks rather than their banks making money off of them.

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Additional Safety Benefits

In addition to the value and safety of the leverage to increase the rate of return on your invested money, the strategy provides the following safety features:

Amplified Death Benefit effective immediately upon policy issuance

30-Day access to your available funds

A+ rated guarantee of no decline in cash-value

Dividend payment history since before the Civil War

Protection from creditors

Chronic/Terminal Illness benefits