10/90 Premium Split and Blended Term PUA Rider Risks

10/90 Premium Split & Blended Term PUA Rider Risks, with Rodney Mogen

Considering a 10/90 premium split (Base/PUA) policy design with a Blended Term PUA Rider for an IBC policy over a design truer to Nelson Nash’s original 33/67 split?  Was it because someone showed you that you can get more cash value in Year 1? Or an earlier break-even point, and still outperform the cash value by Year 30? 

Unfortunately, this newest fad design hurts clients who want the best place to store cash and build investible capital. When you’re looking for answers, it can be really hard to sort through what’s best. And to separate what’s marketing vs. what’s true education.

We strive for simplicity but accuracy, disclosing without being confusing, breaking down without misleading. That’s because our ultimate goal is empowering you to make decisions. 

It’s tough to make decisions through all this marketing noise. Because it takes your attention off of what really matters: control.

Today, Bruce and I are talking with MassMutual Brokerage Manager, Rodney Mogen about the risks of a stripped-down 10/90 premium split design.

10/90 Premium Split & Blended Term PUA Rider

We’ll discuss IBC policy design, the blended Term PUA rider, base/PUA premium split, and ideal whole life policy structure and answer:

  • What are the risks of a policy with too much PUA premium?
  • What is a MEC, and why do you want to avoid it?
  • Why is a Blended Term PUA Rider used with a 10/90 premium split design and how does it increase your risk as a policy owner?
  • Why and how do you give up long-term dividend growth when you have minimal base design?
  • Policy illustrations and marketing vs. actual policy performance.
  • The difference between long-term policy performance vs. short-term cash value.
  • The trend of companies that kept their dividends high over the last decade, now lowering dividends.

So, if you want to get the best Infinite Banking policy, maximize early access to cash value, and get the most guarantees and growth so you can maximize the use of every dollar towards creating time and money freedom, tune in now!

Where The Infinite Banking Concept Fits In The Bigger Picture

The Infinite Banking Concept is just one step in the greater Cash Flow System.

Privatized Banking

It’s the peanut butter to your cash flow sandwich.

While it’s nestled into Stage 2, Protection, it also improves everything else around it.  Infinite Banking helps you keep more of the money you make in Stage 1, amplify your cash-flowing asset strategy in Stage 3, and accelerate your time and money freedom.

The Bottom Line About IBC and Premium Split

Nelson Nash, the Father of the Infinite Banking Concept, warned against people using the concept as a sales tool with improper policy design. No one should be nervous about IBC; they should be worried about policies that stray off course and take on risk.

Insurance is a risk transfer product.

The entire reason for using Whole Life Insurance over UL, IUL, VUL, EIUL, etc. is the safety and guarantees. So why would you add a rider that lacks guarantees?

Policies with too little base and Blended Term PUA riders are taking on more risk than is necessary. If you go the route of 10/90 premium split and Blended Term PUA’s, you are sacrificing safety and guarantees for a few extra thousand dollars in cash value today.

Stick with a ‘Pure’ PUA rider and a proper amount of base premium, and you can sleep well at night.

The safer approach will provide more certainty over a much longer time horizon and wider range of possibilities. Your cash value is supposed to be your safe tank to store cash in between the deals/investments you make outside your policy.

In general, the ideal funding ratio for a specially designed life insurance policy (IBC approved) is 33% base premium, to 67% PUA. This design gives you access to cash early, without compromising the ability for the policy to grow.

About Rodney Mogen

Rodney Mogen is a 20+ year veteran in the financial industry. He has been rated top planner quality by multiple organizations every year since 2001 through 2018 currently. He serves as the Brokerage Director for Mass Mutual South Texas and provides other strategies through Solve Ur Puzzles.

Rodney holds multiple doctorate degrees. As well as the LACP (life and Annuity Certified Producer), AAMS CRPC, CCS, and over 26 more designations.

Rodney has spoken in many state legislatures, and organizations to provide factual information to better serve you the client.  He has also worked tirelessly with state and federal leaders to craft legislation favorable to our clients and to us. He is continuing to work with the SEC to build a more comprehensive and favorable ruling for all.  Rodney is the Government/IFAPAC chair in Austin, and the state IFAPAC board.

Ready to Get Started with Infinite Banking?

If you would like to implement Privatized Banking, cash flow strategies, or alternative investments, we can help.  We’ll review your situation to help you decide what moves are best for you.

To start the conversation, book a call with our advisor team.

Success leaves clues.  Model the successful few, not the crowd, and build a life and business you love.

Rachel Marshall

Rachel Marshall is the Co-Founder and Chief Financial Educator of The Money Advantage and President of Marshall's Insurance and Financial Services. She is known for making money simple, fun, and doable. Rachel has built a team of licensed professionals (investment advisors, insurance agents, attorneys, tax strategists) to help her clients create time and money freedom with cash flow strategies, Privatized Banking, and alternative investments. Rachel is the co-host of The Money Advantage podcast, the popular business and personal finance show. She teaches how to keep more of the money you make, protect it, and turn it into cash-flowing assets.
Creditor Protection of Life Insurance

Is Life Insurance Protected from Creditors? Privacy and Creditor Protection of Life Insurance

By Rachel Marshall | January 4, 2021

Want to shelter your assets from the prying eyes of the IRS, claims of creditors, or the public? Cash surrender value and life insurance proceeds are exempt from creditors in most states. In this episode, we’re talking about the privacy and creditor protection of life insurance. So, if you want to know how to protect…

Read More
Direct vs. Non-Direct Recognition

Direct Recognition vs. Non-Direct Recognition: Does it Matter?

By Rachel Marshall | December 21, 2020

Are you considering whole life insurance and want to know which is better: Direct vs. non-direct recognition life insurance companies? What does it mean? Why does it matter? How does it impact you? And should it be a part of your decision-making process? In this episode, we discuss the why, how, and what of direct…

Read More