Transcription
What's up, everybody! Jamal Gibbs, your family-oriented entrepreneur. In today's video, what we're going to do is talk to my man, DeAndre Clayton, about the different types of life insurance policies and what's going to benefit you the most when it comes to the HELOC strategy and your real estate investing business. Let's get into it.
So, what's going on, bro?
Oh, man, not much, just cooling. You know how it goes.
Absolutely, man. So, I wanted to talk a little bit about the different types of, um, he, the different types of insurance policies and how they can be beneficial to people, what's not going to be beneficial, and then kind of tie that into the HELOC and which one is going to be the best one to use. So, this is a topic that a lot of people have questions about. So, why don't we get into it, bro?
Absolutely, absolutely. So, um, first off, uh, 'cause sometimes I get this on a call, "Oh, you don't like term insurance?" I get that sometimes, right? And so, it's not that I don't like term insurance. Really, what it is, is that, you know, um, a hammer has a different job than a wrench, right? Now, can it, can it do some functions that a wrench possibly can do? Yeah. But will it fully accomplish it? No, right? Or will it be efficient? Will it save time? So on and so forth. Uh, not quite. And so, uh, this is a really, really good topic because sometimes people don't know when they should position which product for which job, right? And so, obviously, you have term life insurance. You have universal life insurance, which is broken up into, uh, three different groups. You got index universal life, you have, uh, regular universal life, you have guaranteed universal life, actually. And you also have variable universal life. So, that's four different types. And then, uh, you also have the whole life, uh, journey, right? Um, and so, each of them has their purposes and the reasons why you would use them for whatever circumstance. Important, make sure that you're covered regardless of what, right? And so, term is usually the most common form of coverage because most people think about life insurance just from a cost standpoint and not necessarily a value standpoint. Are there valuable terms? Absolutely, right? Um, but most of the time, when it's sold, it's not sold from that platform. So, case in point, um, you could have a term, it's just like a level term, and it pays out if you die, and it's, you know, 10, 20, 30 years, what have you, right? Most of the time, when people are buying terms, they're buying it to fit a specific problem, right? So, if I get a decreasing term, which means that the death benefit drops and my premium drops as time goes, um, I might be getting that because I put a 30-year term on my house and I'm expecting that as I'm paying off my house, I don't need as much to cover it, right? Um, if I get an increasing term, I'm expecting that maybe my income will go up over time, so on and so forth, but I really don't want to pay that much money for the insurance, right? Um, but the reality is, is the important part to understand about insurance in general is two principles. One is "alator," which means that you should always get out more than what you put in. Um, and two, uh, there is human life value. I think a lot of, like, if you go on the internet, a lot of people go away from human life value selling, right? They, they, they try to sell it only for, "Oh, income replacement," "Oh, you know, house replacement," and they forget that human life value is the most important part of what insurance is about. So, in essence, you should be striving to be covered for your maximum human life value. Now, this is very different than, like, car insurance, right? So, like, car insurance, uh, has this actual cash value. So, like, if you crash your car, total it.
So, when you say, "be covered for your maximum human life," yes, give me an example about that.
Right. So, so your human life is not based on what you have on you at the time, right? Right. It, it's not how much can you generate? How much can you generate in the future, right? So, you're really striving to say, "Hey, let's look at what am I capable of doing? What do I believe I'm going to do in the next 10 or 20 years or whatnot?" And I want to get insured for that, right? Because if your family loses you, obviously, they're not just losing you for a year, they're losing you forever. They're losing you forever, right? And it's going to take time for them to even gain some type of firm footing economically, um, from the loss of anybody in the family, right? And so, so it's important to kind of put that into perspective and say, "Okay, maybe I shouldn't just be getting insured for the house and that's it, right? I should be insured for what should I be capable of doing for my family in this time period, in this 10-year time period, or whatever?" Right? So, the best way to get insured in that standpoint is usually going to be a convertible term policy, right? And this is something that I've kind of moved into, um, because of, like, infinite banking. Infinite banking, that concept is cash value focused. It's not death benefit focused, right? And so, if you're going to be so cash value focused to utilize infinite banking, we don't want to get away from, which a lot of insurance agents get away from, it's still insurance. We want to make sure that your family is taken care of if something happens to you. So, that's where the convertible comes into play. That's where the convertible term comes into play. Now, this is a very unique product because what a convertible term does is, let's say you got a $3 million convertible term policy, right? So, now this $3 million convertible term policy comes about, and you say, "Hey, DeAndre, I want to do infinite banking, right?" And as I'm looking and designing a policy, maybe the opening death benefit is a million dollars. We could actually convert a million from the $3 million term, right? That's where the convert, the term convertible comes. That's what that's what convertible comes in. And the reason why that's so beneficial is because when we are doing a conversion, there is no underwriting. MH. So, a lot of people may need to really understand that what I'm saying is a convertible term has the ability to protect your insurability. Your insurability is an asset. Most people don't look at it that way. But I want you to imagine that, you know, you and your family are going through different things. Maybe you bought an insurance policy when you were 20, and it was a convertible term, and the, and the term is almost out, and all of a sudden, you're sick. MH. You're, you got cancer, right? Would you like for your insurance to lapse or be done away with in that time? No. Absolutely not, right? Nobody would want that. But would you like to say, "You know what? I know this thing is lapsing next, next year, but I'm in remission right now. Now, let me convert this over into a whole life policy without having to be underwritten and still being treated." So, you can move it around. You can move it around and still being treated as a person who was preferred plus, right? Even though you're undergoing dialysis, even though you're undergoing chemo, whatever you could be undergoing, you can convert with no questions asked. And then, can you convert back? No, you can't convert back to a term, which, I mean, really, there would be no reason to come back to the term, um, because the term goes up as time, you know, goes on as well. So, um, so that's a really, really important thing. Now, there's some different structures and different things that also happen. So, every insurance policy also has riders, right? Um, well, not every one of them, but many of them have the ability to add riders. So, uh, for instance, you might have critical illness riders, you might have chronic illness riders, you might have, um, uh, what is it? Critical injury riders, and different things like that. So, normally, when you're looking at a term, for instance, if you're looking at a term and it has no riders, don't buy it.
Why would you say that though?
Yeah, well, the reason why I would say that is because life insurance is supposed to be used throughout life. MH. If you get a term policy and all that it can do is pay out at death, that's death insurance, right? Got you. Now, I'm not against term life insurance. I'm against term death insurance for the, for the crowd, right? So, I'm against term death insurance. So, in essence, I would much prefer you to have the ability to say, "Hey, man, I had a stroke. I was insured through my term company, and I was able to dig in and accelerate and take some of the death benefit to rehabilitate myself," right? Because now you've done it with the cheaper dollar, with the term dollar. So, a lot of insurance agents aren't selling term policies that way. They, they don't address it that way. And there's a, there's tons of companies that do it. And I will shout out one company that I love to death, Foresters. So, Foresters Financial, um, they are basically an insurance company that actually is like very similar to your credit union. They're 501(c)(3), so on and so forth. But one thing that they do very well is every policy, including their term policies, comes with every rider, right? And you don't add money to pay for the rider. But then the other portion, they do is they give member benefits. So, you think about how cheap a premium is on many term policies. One of their member benefits is that if you have like an emergency assistance situation, like maybe your house floods or something like that, they'll pay for you to go to a hotel for an extended period of time. Now, if I'm only spending $100 a month on it, that's worth it. That could pay back my premium. There's been clients who've received checks for $1,200, $1,700 multiple times throughout the year for emergencies that happened. They broke their bone, they were able to go to the insurance company, and it paid. That's life insurance, right?
Case in point with the property insurance, yeah, situation. You know, I had hail damage on my roof. MH. They replaced the whole roof. It was a $112,000 expense. Exactly. You know what I mean? So, something like that. Exactly. Yeah, that's where insurance is beneficial. That's where insurance is beneficial. Now, if you had Foresters, at the same time, they would have paid for the hotel while the roof was getting done. Yeah. Exactly. Which is kind of cool. Exactly. Um, but they, and that's the case with rental properties as well, you know what I mean? Absolutely. And so, so you think about also, like, um, they have an orphan benefit. So, like, if both parents were to pass, Foresters actually will pay child support to whoever would be taking care of your kids, $900 per month. MH. Right? So, when I sell a term policy with them, I think I'm doing the best thing for the client because there's so much value that they're given.
So, how much would something like this run the average person, man?
It's people who can get these policies for $15, $50, $100, $200. I mean, it's a whole gambit of things. Depends on situation, depends on how much they want to be insured. Um, now, of course, as I mentioned, and this is one thing about also convertible terms, you want to make sure that whatever company that you're getting a convertible term with, they have a policy that you actually want to convert into. So, this is really good for people who call me and want to do infinite banking. Well, if we do a convertible term first, I would do a convertible term possibly with the same company. I would design the infinite policy with so that you can naturally go over and not have to deal with the underwriting, right? Um, but there's, you know, and of course, that company would still have all those riders as well. Um, you know, they just wouldn't have orphan benefit and different things like that.
So, using policies is very important. Just to be clear, the orphan benefit is that $900 a month he was talking about that goes to your kids per child. Got you. Per child would go to the guardian to take care of your kids. Got. And then your death benefit will still pay out. Okay. So, that's, that's insane, right? Um, especially if you passed early on and your kids had to go an extended period of time without you. Um, also provide scholarships and different things like that.
Does it matter how long you're on an insurance policy before that insurance kicks in? Let's say something like, Oh, good question. Let's say if somebody's on an insurance policy for a year or two, and then they, you know, something, they're in a car accident and they die. Good question. You know, how, how does that work?
Good question. So, in the insurance industry, you got, you got two different basic terms. You have the contestability period and you have the elimination period. So, I'll, I'll discuss the contestability period first. So, for the first two years of any policy that you form, what happens is, you can be paid out from day one if something happens to you. However, they will do further underwriting on the situation to make sure that maybe the surface-level underwriting that they did earlier on, that they didn't miss anything, right? And so, yeah, but how can you contest it if it's, if it's a pure accident? If it's a pure accident, obviously, you're, or if you catch cancer two years later, you know, something like that, obviously, right? So, so obviously, the insurance policy would pay out in those situations. Now, an elimination period is different. So, an elimination period, what happens is, and normally, I will say this, you only see elimination periods on policies of, uh, what they call guarantee issue. So, guarantee issue is, I have cancer, I have, uh, end-stage renal disease, I have all these different problems, and I need insurance, right? Because most of the time, most of you only want insurance when you have your problem. That's a fact. And that's the worst time to try to get insurance because now, not only rates are going to be higher, all these different things, but you won't even be able to qualify for as high of an amount of insurance if you already have these, these situations going on. But I digress. That's just one thing I always deal with. It's like that with everything. I just deal with that thing so much, right? So, so when you're, when you're dealing with guaranteed issue policies, they have an elimination period. So, for the first two years, the pay can't fully come out, right? And so, what will happen is, it'll kind of have a stair step. And this also happens with modified. Like, if you're, if you're underwritten and your health is bad, and they're like, "Okay, well, we'll modify it where maybe, you know, a year in, we'll give you 25%. Then after the next year, then you'll get this much, and then now you'll be fully insured for the amount that's there." But in the meantime, what they'll do is they'll always refund the premiums and at least 7 to 10% interest, they'll give you for, you know, how much you have been contributing if you were in an elimination period.
Got you. Man, quick question, man. You know, there's, there's a ton of different insurance policies. It seems like the convertible one is the one that you're interested in the most right now. You feel like that's going to be the most beneficial for our listeners.
So, I think, I think the convertible is always the best choice if you're thinking about, like, something like infinite banking, right? And you're like, "Oh, you know, you're kind of on the fence with it. I'm on the fence. I want to learn more. I want to take my time to get as much information in as possible." Well, let's go ahead and get you insured to the best of your ability, and then once we've gotten you insured to the best of our ability, then you have more time to make this decision, right? And you don't have to worry about, "What if?" At least you're insured, and you've protected your insurability. And the benefit of that is, if we protected it to your max degree, then you can start multiple policies throughout your life. You don't have to convert all of the term over at one time, right? So, you can say, "All right, well, I'm getting a million of whole life over here. I'm going to go ahead and convert it from this term. I'm getting another million, you know, so on and so forth." So, you know, you, you buy the time to always protect the most valuable thing in the picture, which is you, right? And that's the kind of, that's the nuance of the difference in life insurance when it comes to life insurance. The valuable thing is the person. Now, people sell life insurance based on other things. They base it on your assets, marital status, all that kind of stuff. That's the marketing piece, right? And they only do that to try to make you, uh, bite, right? So, you think, "Okay, well, I just bought a, I just bought a $300,000 house. Well, if something happened to me, I don't want, you know, I don't want my kids to have to not live in this house." So, on and so forth. Then they come up with mortgage protection. The reality is, if you focused on your human life value, you wouldn't need mortgage protection because your mortgage protection, your mortgage should be worth less than you, right? Um, and a lot of people don't really kind of understand that, um, that the value is the person on life insurance because life is what's insured. If you're talking about a car, the value on auto insurance is the car, right? The car is not releasing a death benefit to your family. What it does is, if you total the car, then it says, "Hey, what was the actual cash value of the car before total?" Right? And they give you like 75%. So, life insurance has a future viewpoint. It doesn't do, "Well, what's your value right now?" Because if you, if you got insured for what your value is right now, your family would be done for. That's a fact. They would be done for, right? For a lot of people. For a lot of people, right? You know, most people don't have a positive net worth. That's right. Man, right? So, so you have to understand that.
Oh, man. Now I understand why protecting my insurability is so important, especially if you're talking about generational wealth. I, I can't understand how people talk about generational wealth and leave insurance out of it.
Right. Now, there is a nuance, though, that I also want to, that's a great, that's a great point, man. You can't talk about generational wealth without being insured. No. No. Not possible. Not possible. You're taking the long way, right? If you're talking about generational wealth, in essence, what the insurance company's job is, is to add money to your pot to protect your generational wealth, whether it be to protect the taxes that can come up if you've really generated a lot. Like, I've, I've said in the past, a person who subscribes to "buy term and invest the difference" already tells you they'll never be worth more than $12 million. MH. Because now the inheritance tax comes in, all these different things come in. So, if you actually believe that, you're saying you're putting a ceiling on what you will produce in life and what your net worth will be to that point.
Got you, man. So, how does all this tie in with the HELOC, bro? Like, how can the convertible, uh, life insurance policy, how can that be beneficial when it comes to a HELOC and how can we all tie this into the infinite banking policy, right?
So, so I will say the HELOC, what I love about concept, not policy. Yeah. The, the, yeah, the HELOC concept, the infinite banking concept. But really important, when we talk about the HELOC concept, what it allows you to do is to get out of your mind the concept of, "Everything is not on sale for me." Right? So, this is a concept, and if anybody has set an appointment with me, I go on and on about this concept. But basically, what we've done is, it's natural for us to feel like certain things that we deem very expensive, we block it, right? So, right now, and I'll tell the truth, right? So, there is a jet that might be on sale for $16 million, and it used to be $20 million. MH. Well, audience, I'm going to tell you the truth, man. I'm not like these regular gurus who try to, you know, blow smoke up. That's not on sale for me, right? That's not on sale for me, right? $14 million ain't on sale. It's not on sale for me, right? So, it doesn't hit my radar. It, it doesn't hit my radar. I'm not thinking, "Man, you know what? Yeah, I'm okay. That one over there, $14 million. That one, $16 million." Which features? It never happens. My mind doesn't even go there. The problem is that most people do that also with things that they actually can afford, they just don't know they can afford it, right? So, whether it be life insurance, which, you know, uh, or even saving for retirement, or any of those different things, they can't afford it, they just don't believe it, right? And, uh, there's a, there's a, uh, there's a site called bankrate.com that gives statistics about life insurance, and it says that 50% of Americans believe that whole life insurance is 300% more than it really is. That's crazy, right? So, in essence, why, why do you think people believe that then? Well, they've been sold that concept of "buy term and invest the difference" so much that they've only focused on cost and said, "You know what? I'm not even going to delve into it." But what they haven't focused on is most terms will be out of place. They will not be active by the time you have a life event. I remember you telling me one time, like, like what you just said, to that particular point, you said, "Most term insurance policies don't pay out." Oh, yeah. Yeah. Most people don't get the use. 99% of, just to be clear.
Why is that the case?
It's because the actuaries at the insurance company are brilliant. They're very smart. That's why people, and just so, just to be clear, not to cut you off, that's why people don't trust it. Yeah. They feel like they're just giving money to the insurance company. But that's because they're buying term. There you go, right? And so, so the actuaries, what they do is they say, "Okay, I'm going to run your health history. Oh, you're pretty healthy, right? I don't expect you to die in 30 years." Now, you could be very healthy and you could be 70. MH. You're not going to get no 30-year term on no 70-year-old. Let me give you an example. Years ago, I was in my mid-20s. I didn't know much about life insurance then, but I got a policy anyway 'cause I started growing a family, you know, my daughter was young, I'm married with kids, you know, etc., right? So, I'm in Pennsylvania. I get a policy. I'm trusting the person that's setting up the policy there, plug me in with the right policy. So, I get a million-dollar policy back then, right? And he's like, "Oh, it's going to cost you $100 a month." Perfectly fine. The policy was set up to where my oldest daughter, who's 18 now, she's me, 19, when she turns 25, that policy basically goes away. MH. You know what I mean? She was the only kid at the time, right? All right. Um, so, basically, I'm paying on it for 25 years. If something would have happened during that 25 years, then they would have paid out. But they did the blood tests and all of that other stuff, and they said, "Okay, chances are you're going to live past 25 years." So, we're going to give you this policy. Absolutely. So, if you're, is that the right way to look at it?
That's the right way to look at it. If you're not getting a convertible term, you're at the casino, and the, and the actual insurance company is the house. M. The chances of you winning in a casino is very low. It should be 50/50. I learned that it ain't right. And so, the chances, I mean, really, and this is not conjecture, 1% are paying out because the people are that smart that they say, "Nah, we're not going to give you 30 years because there's a chance you might actually die in 30 years." Right? So, most term policies are accidental policies. They're not, they're not called accidental death policies, but in order for them to actually pay out, it has to be an accident. It's, you know, 'cause in your formative years, you're not really going through that. And that's the importance of hanging out with people who are smarter than you in what they do. That's the importance of having friends that understand what they do. Yeah, 'cause you know you're going to get the best of it. Yeah. Yeah. Yeah. It's, and, and this is really good information for people that when you are going to an insurance advisor, go to somebody to get advised. MH. Don't tell them what to do. Tell them your situation. And if they're an expert, they advise based on your situation. Most are going with the mindset of, "I already know what I want to accomplish." So, yeah, let me, let me just do this, and it's not really working for him.
I get that, man. There's, but, you know, just to play devil's advocate with that a little bit, there's a lot of people who feel that financial advisors take advantage of people. So, they kind of go in with the mindset that they know what they want to do with their money, and I'm not going to have this person tell me, "You just going to do it."
Gotcha, gotcha. And I completely agree with that. Now, I'm going to say something for all, look at these athletes, man. You know what I mean? And I'm going to say something for all the doctors, for all the people who have a bunch of letters. And I'm going to apologize ahead of time. It's not that you're not competent, is that America has set up a system that bases merit on designations and doesn't base it on, "Is the person competent?" Right? And, and a lot of end-users, right? So, you go to the hospital, obviously, you just trust the doctor because he's a doctor. You don't trust him because he's gained a trust. You don't trust him because, "Hey, this is making sense to me." And what most people do, they fight against what makes sense to them. So, when it comes to a financial advisor, where the number one problem is for the average person, is they're hoping that this person will do the right thing by them without them actually checking a hand and saying, "Does this actually make sense?" Right? Right. And, and I mean, and I could use, I've used the illustration with the market and different things, leaving your money with, you know, uh, a money manager. Well, would you actually let somebody in your family who's responsible borrow $5,000? Now, you, we know you got a different kind of money. So, that, but the average person can't afford to put four tires on their car, right? So, giving $5,000, um, to somebody who you even trust is very hard. So, why would you sit your money somewhere and say, "Uh, he could just do whatever he wants with it?" We've lost the importance of being financial stewards in actually understanding what we're doing, right? Um, and so, in essence, the financial advisor, he's the king, and he's so smart that you could never understand what he's doing because he's brilliant and he has all these letters, right? You know, and then you get messed up because the financial advisor made you sign a whole bunch of paperwork relieving liability. Yep. And you don't even think about, "Why do you make me sign paperwork to relieve liability?" Right? And so, when you're talking about seeking advice, it's okay. When I go to be advised, "Do I understand why he came to that conclusion?" Is the next thing you should ask. Right? And if you're not asking that, you won't get good service. If you're not asking that, you'll be like MC Hammer, you'll be like every athlete that has been fleeced, um, from their money because they just trusted designation and they didn't trust, "I get good vibes off of the fact that this person will take as much time as possible to make sure that when I move, I know what I'm doing." So, they trust the label, not the expertise. They trust the label, not the expertise, right? And, and the financial system is backwards. It's, it's, but backwards. I ain't going to lie to y'all. I believe it. It's but backwards. You know, they, they, they call 401(k) savings, you know, savings accounts. And I'm like, "I don't remember a savings account I've ever lost money." Not a savings account. I've never lost money in a savings account. I can't lose $30,000 in a savings account. It's investing, and it's speculating in investment. And so, there's a proper protocol to how you're supposed to deal with your finances. One, you should be protecting things first, right? You should have a good protection layer before you spend money anywhere. MH. Right? So, that's the purpose of insurance. It's the first stop, right? Then after that, if you want to invest, then vet your investment, make sure you understand what you're doing. If you need an expert like yourself to talk to, then, hey, do that, right? No problem. Then after that, now you have room for speculating. Speculating shouldn't be your first stop. There's far more people with a whole bunch of money in a 401(k) that is volatile. MH. And they still ain't got $1,000 in their savings account.
You know what, man? You know, everybody's circumstances are different. Yeah. And that's why even with, with my coaching program, I don't treat every single person the same. Neither do I. Every, you know, just like you, you know, we're talking about the insurance earlier where, you know, there's different types of insurances based on people's circumstances. Like, so for me, with the coaching, you know, somebody might want to build passive income. I'm going to gear their business toward, you know, building a rental port, a rental portfolio. Somebody might need quicker cash, so we're going to wholesale or we're going to fix and flip, right? Whatever the case may be, right? So, there's different types of insurances, as we discussed. Absolutely. Just like with anything else, everybody's situation is different. So, the best thing that they can do is have a conversation with you and, um, see what fits their bill.
So, how can people reach out to you, man?
Oh, well, obviously, Clayton Financial Solutions is my website. You can book a call there. We, we really appreciate everyone coming. You know, it's been fun for me getting to know everybody too. Um, uh, we also, I also manage a firm here in, in, uh, Greensboro. Actually, no, we're in Winston. Um, our headquarters is in Winston. It's called Pioneer Financial Group. So, I manage that firm. We have people who can help you with long-term care, which 70% of people will need in their life, which is why it's important to get these riders, right? On a policy so you can have some coverage if something serious happens. Um, disability insurance. You know, obviously, you know, I'm the IBC guy, the whole life guy who does a lot of that. Um, some of us write IULs. Um, and that's one thing I also want to touch on. So, IUL is not for infinite banking, right?
Why do people say that?
So, so what the IUL is very easy to attach yourself to because you can have a lower premium with the potential of making more. Got you. Right? Um, but underwriting, there's two different ways that underwriting goes on a policy. So, when you're in a universal life policy, um, except for a guaranteed universal life, which a guaranteed universal life is for seniors who want more insurance than final expense and they're still fairly healthy enough to get it, right? Um, but it locks in insurance and it doesn't go up and down in cost like an IUL could. So, an I, uh, what it has is what we call current, uh, issue underwriting, or performs similar to that. So, basically, the mortgage and expense fees, they go up over time. You don't notice it initially because when you're younger, your policy may be performing fairly decent, so you're like, "Oh, okay, good. That's what's up." And then as you get older, and the cost of insurance goes up with every year that you age, the IUL is doing that in the background. So, then what happens on the latter part of most people's lives, if they're in an IUL, is it starts to cannibalize the cash value and can cannibalize the death benefits. Can it grow past what a whole life can do? Yes. Can it sustain the growth? No, it cannot. Right? And that's the reason why I typically do a whole life. Now, if you're coming to me and you're like, "Hey, I want to do IUL for infinite banking," it can't do it for the purpose of the cost of insurance raising. That's one reason. And also, um, IUL stands for index universal life, so that index comes at a cost, about 2% on a policy. If the market goes to zero, you still pay that 2% on the policy, which means was your growth infinite? No, right? Um, I want to go ahead and lay that to bed because a lot of people, you know, I see that all the time. "When you're going to do my IUL?" And it's like, I have people that I can refer out to that I believe are some of the best IUL sales people that it can work for you. Um, however, you will need an exit strategy on an IUL. And the product has not been around that long, so you're not going to know anybody in your real circle who has had an IUL for 15 or 20 years and it performed well the entire time. So, it's not time-tested yet. It's not time-tested yet. And that, you know, could it be time-tested in 30, 40 years? Maybe. Got you.
So, just to wrap all of this up, man, convertible life insurance policy is good for, convertible term is good for protecting your insurability, which is an asset. And then you can transition into a whole life with the different, uh, variations that whole life has. Obviously, if you have seniors, you probably think of final expense and different things like that. But we want to be able to transition before we get to a point of needing a policy that pays out $5,000. Got it. And when it comes to convertible and tying it in with your HELOC and your infinite banking and all the other strategies that you're using, you always got the money. The HELOC. So, one of the, one of the main problems of most term policies because they don't grow in cash value, if you miss a payment, they're quicker to go ahead and end the policy because there's nothing to sustain it anymore. There's no backing on it, right? And so, when you have a HELOC and you're like, "Hey, you know, I hit a rough patch," and your house has a ton of equity in it, we can just utilize the house to make sure that it holds you over during those times, which is, uh, what's best. Now, of course, there's also a waiver of premium that can be added to a convertible term, or most term policies might have that, right? Or that you can add, which means if you face a disability, that the policy will continue to be enforced throughout your disability without you having any issues.
Got you. So, again, there's a ton of different life insurance policies that you can tap into. Um, the biggest takeaway that I got from this conversation was the convertible can be used as something that, you know, you, at least you can be insured until if you're thinking about the infinite banking and you're thinking about going that route with things, the convertible insurance will ensure you until you're ready for something like that, and then you can be able to scale from there. So, I, I do like that for those who are kind of on the fence with the, with the infinite banking situation. And, um, if you want to learn more about the convertible, uh, term policies, then be sure to reach out to DeAndre. So, uh, Clayton Financial, Clayton Financial Solutions.com. There we go. Yeah. And, uh, we appreciate having you again, brother.
As always, my brother. It's always a pleasure.
Absolutely, man. So, I know you guys love DeAndre. Uh, this is my brother for real, right here. And, um, listen, uh, if you want more information on how this actually works, make sure you reach out. If you want us to do another episode, be sure to, uh, leave a comment in the comment section. But in the meantime, be sure to subscribe to this channel, click the notification bell, and, uh, tell all your friends about it.
You got something else to add?
I got one more thing. So, uh, I do also have a radio show that, you know, I produce and we have conversations. It's called Liquid Radio. You can find it on TuneIn Radio on the WDRB, uh, station. So, it's, you know, it's national. Um, so, I love having these conversations. And if you guys have different things that you have going on, I need guests sometimes. I want to hear about what you're doing in your life and being able to, uh, interview and, and cooperate and give you a microphone for what you're trying to do as well.
Yeah, man. We meet some interesting people doing what we do, especially as content creators. And we're not content creators. This is like a secondary. This is for fun. We actually do what we teach people. Absolutely. How to do. You know, we, we do this. I really do real estate. He really does insurance. He really does infinite banking and stuff like that. So, we're not just talking about it, we're living it at the same time. So, again, guys, we appreciate you watching this video. Leave a comment, subscribe, click the notification bell. We'll see y'all in the next one. Take care, everybody.