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- alain@vidalfinancials.com
Click on the scenario that matches your situation to see how the right strategy could make a difference.
THE SITUATION
A 21-year-old client planned to buy a new car every 4 years for 44 years — financing each purchase through the bank at 8.5%, paying back $3,030/year.
TWO PATHS
Traditional CD/Bank: Pays $5,000/year for 7 years, then finances cars the traditional way
Own Your Own Bank: Pays the same $5,000/year for 7 years, then withdraws $10,550 every 4 years from the policy instead
$258,927 CD Bank Account | $964,638 Life Insurance Policy + $1,523,993 Death Benefit |
THE BIGGER PICTURE
By year 52, the client could draw $50,000/year for life — and if he passed at 85, he’d have withdrawn $650,000 while still leaving a death benefit above $1 million.
THE SITUATION
Peter owns a logging truck company and needs to buy a new truck every 4 years. He bought a truck at $65,790 with a $13,190 down payment, financing $52,600 for 4 years. By the end of 4 years, he’d paid $72,096 total — $19,496 in interest, or 27%.
THE SOLUTION
Years 1-4: Peter takes a life insurance policy with a $40,000 annual premium.
Year 5: He borrows $52,600 from the policy and reimburses $18,000/year in interest on the loan over the next 4 years — buying a new truck every 4 years this way going forward.
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27%
Bank Interest Rate (per 4-yr truck loan)
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$2,000,000
Policy Cash Value by Year 36
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THE BIGGER PICTURE
By Year 37 (age 67), Peter could retire and take a passive income of $125,000/year from his policy. By Year 55 (age 84), if he passes away, he leaves his heirs a death benefit of $3,000,000 — all while having financed decades of trucks through his own policy instead of paying 27% bank interest.
THE SITUATION
A couple with a newborn wants to prepare for their child’s future.
THE SOLUTION
Husband and wife put $200/month ($2,400/year) into a policy for 20 years — a total outlay of $48,000.
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$48,000
Total Premiums Paid (20 yrs)
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$181,288
Cash Value at Year 20
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$239,073
Death Benefit at Year 20
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THE BIGGER PICTURE
After just 10 years, the cash value already exceeds the family’s cumulative net outlay — meaning the policy is growing faster than what they’ve put in. By the time their child is ready for college or a first home at year 20, the policy holds $181,288 in accessible cash value, while still protecting the family with a $239,073 death benefit.
THE SITUATION
A couple with 2 young children wants to fund their children’s education — and also find a way to leave money to their children long-term.
THE SOLUTION
Michael and his wife gift $12,000/child for 16 years. After 16 years, they withdraw $100,000 tax-free per year (years 17-20) to help fund college. From age 20 to 60, the parents continue paying the $24,000 annual premium. Once the kids finish college and are settled in their careers, the parents hand the policies over to them — the children then take over the $24,000/year premium and withdraw tax-free at retirement. The annual premium is flexible and can be reduced if needed.
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$3,500,000
Total Premiums Paid
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$33,000,000
Living Wealth Created — 2 Generations
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$1,000,000
Initial Investment
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$30,000
Annual Income Stream
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THE BIGGER PICTURE
That initial $1 million could generate a much higher total amount across 3 generations — turning a single gift into a lasting income stream that benefits children, grandchildren, and beyond.
THE SITUATION
A couple just retired and has 4 grandchildren.
THE SOLUTION
The grandparents put $2,000/year in premiums into a policy for each grandchild, planning to pay for 22 years while keeping ownership until their death. On death, ownership transfers to their sons — each the father of 2 kids.
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$100,000+
Cash Value at Age 22
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$4,000,000+
Cash Value at Age 70 (no further outlay)
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The Situation Eva’s husband passed away, leaving her alone with 4 kids and a $2,000,000 death benefit. The timing couldn’t have been worse — right before the 2008 market crash, which cut her nest egg in half to $1,000,000. Terrified of losing more, she panicked and moved everything into cash and short-term bonds, earning just 3% after taxes. That left her with $30,000 a year to raise 4 children. The Solution We restructured her $1,000,000 into two coordinated vehicles. Step 1: an annuity converted the funds into a guaranteed income stream of $103,891/year for 10 years, backed by the insurance company — not the market. Step 2: Eva used $50,000/year of that income (4 kids × the $13,000 annual gift exclusion) to fund an Irrevocable Life Insurance Trust, through which her children purchased a $1,000,000 life insurance policy on her life. This removed the asset from her taxable estate while locking in a legacy for her kids.
The Bigger Picture Eva nearly doubled her annual income — and it’s now guaranteed by contract, not tied to the stock, bond, or real estate markets that scared her in the first place. She also gained tax-advantaged income, removed an asset from her taxable estate, and secured a $1,000,000 legacy for her 4 children, all without taking on any new market risk. The Situation A 75-year-old couple had done well in the stock market for years, watching their account grow from $200,000 to $400,000 to $600,000. Then, almost overnight, it dropped back down to $400,000. Shaken by the swing, they panicked and moved everything into a 1% annual CD at the bank — locking in just $4,000/year in income. The Solution We kept $100,000 liquid for emergencies, and used the remaining $300,000 to purchase a Joint Lifetime Income annuity covering both of their lives. This pays roughly 6 times what the bank CD would — and if either of them lives to 100, it will have paid back all the money they had at the top of the market. The result: $23,220/year for life.
The Bigger Picture Nearly 6 times the income, guaranteed for both of their lifetimes — without needing to stay exposed to another market swing. They kept $100,000 accessible for emergencies, and the annuity even carries the possibility of paying back everything they had at the market’s peak if one of them lives to 100. The Situation A husband and wife, both 50, have a 23-year-old daughter, Jill. Both parents have health issues that make them uninsurable — but their goal is still to build a passive income for retirement. The Solution Since the parents couldn’t be insured, we put a life insurance policy on Jill instead, funded with $20,000/year for 20 years. Payments then stop, and the family begins drawing tax-free income from the policy. Starting at year 21 — when the father turns 70 — he takes $28,500/year for 15 years, until age 85. At that point he can switch to policy loans, which remain income tax-free. If he passes away at 85, Jill (then 57) inherits a cash value of around $1,000,000. At age 70, Jill can choose to surrender $150,000 of cash value for income the rest of her life. Even so, if she passes away at 90, her heirs would still receive a death benefit of around $3,000,000.
The Bigger Picture Health issues didn’t have to be the end of the plan. By insuring Jill instead of her parents, this family still secured decades of tax-free retirement income for the father, a seven-figure inheritance for Jill, and a multi-generational death benefit for the next generation of heirs — all without either parent needing to qualify medically. Personal & Family Estate Planning
Business Planning
The Bigger Picture Every family and business situation is different, and the tools above are just the ones we use most often to solve for taxes, control, liquidity, and continuity. No two plans look the same — the right combination depends on your specific goals and circumstances. |