Financial professional and police officer, Kyle Church, talks about leveraging life insurance for estate planning. Kyle shares his personal experiences and professional insights into the significant role life insurance plays in securing financial stability and legacy for families. He emphasizes the importance of strategic estate planning, contrasting different types of life insurance policies, and how they can be utilized beyond mere death benefits to support life goals and investment ventures.
As Kyle and Randal explore the interplay between life insurance and real estate investment, you’ll get a deep dive into crafting financial safety nets that extend through generations. Tune in to the full episode for an in-depth exploration of financial strategies that promise security and prosperity. Enjoy!
Key takeaways to listen to:
About Kyle Church
Kyle Church is a financial professional. He helps people secure life insurance policies and financial products that allow them to do estate planning. He's also a police officer in the San Francisco area as a full time gig.
Connect with Kyle Church:
To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!
To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!
Financial professional and police officer, Kyle Church, talks about leveraging life insurance for estate planning. Kyle shares his personal experiences and professional insights into the significant role life insurance plays in securing financial stability and legacy for families. He emphasizes the importance of strategic estate planning, contrasting different types of life insurance policies, and how they can be utilized beyond mere death benefits to support life goals and investment ventures.
As Kyle and Randal explore the interplay between life insurance and real estate investment, you’ll get a deep dive into crafting financial safety nets that extend through generations. Tune in to the full episode for an in-depth exploration of financial strategies that promise security and prosperity. Enjoy!
Key takeaways to listen to:
About Kyle Church
Kyle Church is a financial professional. He helps people secure life insurance policies and financial products that allow them to do estate planning. He's also a police officer in the San Francisco area as a full time gig.
Connect with Kyle Church:
To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!
To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!
[00:00:00] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your commissions and turn them into cashflow.
[00:00:20] Intro: Here's your host, Randall. Let's dive in.
[00:00:22] Randal McLeaird: All right. Hey, welcome back. Happy to have you here today. I've got Kyle Churchon. He is a professional, a financial professional. He helps People secure life insurance policies and financial products that allow them to do some state planning and that sort of thing.
[00:00:35] Randal McLeaird: So I thought it'd be helpful to come on and share some of the strategies that he uses with some of his clients. He's also a police officer in San Francisco area as a full time gig and solid guy, great energy. And you're going to get something out of the show. If you would go and rate and review wherever you are, one word comment helps us a ton more so than the star.
[00:00:53] Randal McLeaird: So it helps us get reach and get great guests to come on the show to provide as much information and value as possible to you, the listener. So appreciate you [00:01:00] again, jumping on and everything that you guys do to support the show. Without further ado, here we go with Kyle.
[00:01:06] Kyle Church: We had this Fairy Five princess party.
[00:01:08] Kyle Church: It was amazing, man. It was probably over a hundred kids, over a hundred parents. Yeah.
[00:01:13] Randal McLeaird: Oh my goodness,
[00:01:15] Kyle Church: man. Yeah, we spent the pretty pity on that party for sure. My wife, she goes big or go home.
[00:01:19] Randal McLeaird: That's insane, man. We've had, cause I have a six year old son and a three year old daughter, and we've had a big ish party, but never 100 kids, like maybe 50 people total or 60 or something, but that's insane.
[00:01:33] Randal McLeaird: So how do you even have that many kids?
[00:01:37] Kyle Church: For one, just to give you a little bit of context on my family, my mom is one of seven and my wife's mom is one of six. So both sides, right? And then our grandparents, my grandmother is one of 13 and my wife's grandfather obviously is one of seven.
[00:01:54] Kyle Church: So we have a huge family, even our immediate family, like every Christmas, every [00:02:00] holiday is probably like well over. Probably well over 60 to 80 people. And that's just the media family, but it's just, it's amazing, man. I love my family. They're the driving force and why I do what I do, obviously.
[00:02:11] Kyle Church: And it's just funny. You just see all these people growing up and having different personalities. And yeah, that's just how we are. We grew up in a close knit household and my grandma always stood on the virtues of a family, and making sure you support your peoples, making sure you support your family.
[00:02:26] Kyle Church: Cause you just never know life is too short. And one thing for certain that death is for certain, but family is forever. So
[00:02:32] Randal McLeaird: my grandma just passed last week and we appreciate it. But in those moments you, at least me, I sit and I reflect, I'm like, man, I, Chasing money, chasing this, chasing that.
[00:02:43] Randal McLeaird: Like at the end of the day, it doesn't really matter. Like you need money to survive. You need to provide for your family and that sort of thing. But ultimately family is the number one thing. And so it's just a reminder. So that's awesome to hear. Yeah. That's a big old family.
[00:02:55] Kyle Church: Yeah. Huge.
[00:02:57] Kyle Church: So
[00:02:58] Randal McLeaird: what [00:03:00] are you working on? Cause I was looking and you had a podcast. So I went to look for it. I couldn't find it. I don't know if I was typing the wrong thing in. And so I'm like, all right, what is, Yeah. Kyle all about what's happening.
[00:03:10] Kyle Church: Absolutely, man. It's such a pleasure to be on your podcast, obviously, for sure, just to be able to give insight.
[00:03:16] Kyle Church: So I'm doing a little rebranding, getting some things back together. So originally I did have a radio show or radio podcast on amp radio, which was variation of Amazon. They have this whole platform set up to where you can go have the free press to be able to talk about different things.
[00:03:32] Kyle Church: And so My biggest thing, in terms of what I do is I'm a licensed financial profession and what does that mean? We help families understand the components of building an estate planning for themselves moving forward, right? A lot of people get the variations between a financial planner and a financial professional as two different concepts.
[00:03:49] Kyle Church: But at the end of the day, we both have distinct things. The biggest defining factor I would say in between what we do is that a financial planner. They're usually securities license [00:04:00] and a financial professional. We usually are based around. Life, accidental death and health insurance, right?
[00:04:05] Kyle Church: So we focus on the context of insurance. And so I tell people at the end of the day, when you think about it, we're both here to do 1 thing, right? And we have a fiduciary responsibility to be able to support our people and to support our clients. Whether that's what the state plan, whether that's what the legacy building, whether that's with business consultations, whatever it is, we figure out and we create a strategy that's going to best suit them one financially for their future and two, to be able to set them up for the best opportunities to be successful.
[00:04:35] Kyle Church: And so that's what we do. And so my past, I'm starting all over again, just because app radio was put to the side and I lost all of my content on there and it was unfortunate, but Hey, we have a saying in our brokerage, we don't panic, we pivot. And so we're just really excited about what's to come in the platform that I'm building is really honing in.
[00:04:56] Kyle Church: of planning. And so I said, when we're [00:05:00] talking about what we're doing, as far as my podcast goes, it's called unsolicitedly manifested. We just pre recorded four episodes actually with myself and a couple of other people that are in my field of work, just talking about strategizing wellness. And just overall just growth, right?
[00:05:16] Kyle Church: Because I think those three are one of the same. If your mind is not right and your body is not right, your money is right. So definitely think that they're one of the same. So it's a multitude of many different things that we're going to be talking about. I'm really excited. We actually have our first episode coming out next Tuesday, so it'll be really fun.
[00:05:34] Kyle Church: Just the time, just to let loose, man. I feel like we make these podcasts things really mundane. Hey, we have to talk and be direct and what's fun. Yeah. You know what I'm doing in my life. We always have to just say this has to be perfect. And that's not the case with this podcast, at least.
[00:05:48] Kyle Church: It's really for people to let loose. Yeah. This one's certainly not
[00:05:51] Randal McLeaird: perfect, man. It's always a learning experience for me on the podcasting thing. Isn't a, it's like not a direct type of moneymaker of any sort. It's [00:06:00] more of just an educational platform and education for me as well. So yeah, I enjoy the conversation, just shooting the breeze and talking shop and all the different things.
[00:06:07] Randal McLeaird: All right, let's talk then on your, in your profession, right? Explain to me, you're doing some estate planning. And so how does that even like you're coming to the table and you're saying, okay are you using life insurance products for estate planning purposes?
[00:06:21] Kyle Church: Correct. Absolutely. So all that and more, just to give you a base point, I'm a life license agent.
[00:06:26] Kyle Church: So when we break it down to the context, no one grows up and say, Hey, I want to be a life insurance agent. We're usually, in my full time job, obviously, and I love doing this, but in full time. I'm also a full time police officer, right? So I work in San Francisco. I'm a San Francisco police officer.
[00:06:42] Kyle Church: I love what I do. I've been, a police officer well over eight years in county, but what really got me into this business and what really drove home for me, the importance of planning and having life insurance was I lost my grandfather pancreatic cancer slash COVID in 2019. And one thing about that and what struck, [00:07:00] what struck a thought of mine was that unfortunately my grandfather was not prepared.
[00:07:04] Kyle Church: So two income household, they lived, on a golf course. My grandmother, she loved where she lived, they grew up in a pretty rough neighborhood. And for my grandfather to work, 20 plus years, he was a roofer, he was, par owner of the company. And unfortunately, all the income that he was receiving, essentially was not going towards his retirement.
[00:07:22] Kyle Church: And to leave my grandmother there, just suddenly, to pancreatic cancer, he had beat cancer several years prior. He had liver cancer, stage 4, beat it, and then it came back. It was just like, and pancreatic cancer is one of the most aggressive cancers that you can possibly have. And one thing about it was that, just fast forwarding, my grandmother was not prepared.
[00:07:43] Kyle Church: No life insurance. No retirement, no income, and for you to have, a seven to 800, 000 home to still be paying mortgage on, especially on a fair income like my grandmother had, it just wouldn't work. And so that was what really struck my [00:08:00] interest in really getting into helping people strategize and understand the importance of having an estate plan and having life insurance and having these incomes in place.
[00:08:08] Kyle Church: And we kept losing family members, kept losing family members. And unfortunately I lost my best friend. He was shot and killed. And it just, from there, it just, it really struck an interest. He said, look, moving forward, none of our family are ever going to have to go through that again. If you leave it up to us, we're going to make sure that one, they're short insured and two, that they have a strategy and plan in place.
[00:08:30] Kyle Church: God forbid they pass away. And to leave their family with the legacy. So that was the start of something new. So
[00:08:35] Randal McLeaird: let's touch on that then. So what are the, again, the levers that you have that you can employ with your current profession and the conversations that you have with family members, friends, and clients in order to properly establish?
[00:08:48] Randal McLeaird: Because we have a lot of real estate professionals listening to the show, right? So I guess the levers that you have that maybe you could recommend that here at a base level, you need X, Y, and Z.
[00:08:58] Kyle Church: Absolutely. Absolutely. And the great thing about [00:09:00] it, Randall, is that we do work with a lot of investors too, right?
[00:09:02] Kyle Church: A lot of people are like, they get this misconception that I tell people all the time that financial planning, And real estate don't go together. Financial planning and investing don't go together and they actually do. And so when I tell people, when we conceptualize real estate and financial planning, a lot of our investors, they say either they like it, or they don't like it. There's no in between, either they want to have a life insurance policy and they know that they can build cash value to be able to utilize it for other things in their business or in their financial or in their real estate endeavors. Or they say, nah, I'm just going to stick simply to real estate.
[00:09:37] Kyle Church: So when we're talking to people, especially real estate agents, I typically like to work with investors because why real estate investors, and there's a huge, and I'm sure you can probably attest to this. There's a huge, difference between a real estate agent and a real estate agent. Who's a real estate investor.
[00:09:54] Kyle Church: Because you get a lot of these guys, a lot of these gals who are new to the real estate field, and they have [00:10:00] no clue about what options or what investments options are out there. So what I usually tell people is, look, when we talk about buying real estate or utilizing life insurance as a tool to be able to now fund your real estate options or real estate investments, it's a great tool.
[00:10:15] Kyle Church: At the end of the day, we have to consider two things, right? Life insurance is a guarantee. It's a benefit, right? But it also gives you the benefit of utilizing income while you are alive and when you die. So let's say for instance, you have a family member that has a household or that has a house, worth 500, 000.
[00:10:32] Kyle Church: And they say, oh, I have my primary home and I have my secondary home, which I consider as an investment property. One's worth 500, 000 and the other's worth 500, 000. Now, when we consider it, when that family member dies or the head of household passes away. And the wife is left with the kids and a mortgage and a car note and all these things.
[00:10:52] Kyle Church: How is that stability going to be replaced? She doesn't know how to handle the, essentially how to handle, the secondary home or the retirement home. She's [00:11:00] paying the mortgage, but that's even an overhead for her. So what we tell people is why leave your family with an issue, right?
[00:11:07] Kyle Church: When they're already grieving, when they're already going through it, when you can already have an estate plan or have a strategy in place in terms of. A trust or irrevocable trust or a will, or even having just something in place to leave them with financial stability. So what I'd say is, okay if I know if I know that you have two homes worth 500, 000, my goal is to set up a plan or a strategy.
[00:11:29] Kyle Church: That's going to one, be able to now replace that income, pay off those two homes and leave your family with some extra income to be able to support them financially. So if those two homes are worth a million dollars in total, my goal is to at least get a million dollars on the father and a million dollars on the mother.
[00:11:44] Kyle Church: God forbid something happens to be able to one pay off both homes. And two to now be able to leave them with some income that's going to now pay for the bills, pay for the car notes and things like that. And so when people put it into context like that, they're like I never really thought about it.
[00:11:58] Kyle Church: I just thought as my home as a, [00:12:00] as an asset that I can utilize. Yes, you can utilize it. Yes, you can refinance. Yes, you can get a heat lock. But the thing is, you're still paying interest on that income, right? You're still paying interest when you're refiner when you're utilizing that home as a secondary income source.
[00:12:14] Kyle Church: So it's just all about strategizing. I always say life insurance is not the one, one benefit, but it can be a tool for success in your financial future. So that's what it comes down to.
[00:12:24] Randal McLeaird: All right. You touched on a couple of things there that I think one needs some clarity and then two, I want to dive into a little bit more.
[00:12:30] Randal McLeaird: Okay. So million dollar policy is that term whole life. And if you could, for the audience, explain the difference in the two.
[00:12:37] Kyle Church: Absolutely. So there's three, right? So there's three main concepts of life insurance. So you have term, you have whole life, and you have universal life, right? So there's three.
[00:12:46] Kyle Church: So when we talk about term, obviously, it sounds like what the idea is term life. So that means that your life insurance policy gives you a coverage for a set amount of years. So it can usually ranges in between 10 years of coverage, 20 [00:13:00] years of coverage, or 30 years of coverage. That's a term life. So there's no permanent value or cash value that's being built in the policy.
[00:13:06] Kyle Church: God forbid you pass away, your family gets the death benefit if you pass away before those 30 years. But with term life, 99 percent of people typically outlive their term life policies. Unfortunately, that's just what it is. Because why they either don't know how to churn it, or they don't know how to utilize a term life policy to be able to give them the benefits.
[00:13:25] Kyle Church: So 9 times out of 10, when people say, hey, I just got life insurance, I got a term life. But yeah, 99 percent of people are going to outlive that policy. So then when we get into the other two, which are whole life and universal life, those are permanent life insurances. Meaning what? One, you can build cash value in those policies, meaning tax free cash value under Tax Code 7702 and 72E, to where you are paying with after tax dollars to build cash accumulation within your policy, right?
[00:13:50] Kyle Church: And then with Whole Life, you get the benefit of having a guaranteed death benefit, meaning when you pass away, your family will get a death benefit, let's just say [00:14:00] 100, That death benefit is going to come to your family without penalties or taxes being attached to it. Same with universal life. Now, there are different variations of universal life that you can utilize right index, universal life policies, or which are variable universal life policies.
[00:14:14] Kyle Church: It's all a matter of how you set up that policy, but the great thing, like I said, between a permanent life insurance. Is that you get to build cash value, you get a living benefit, which means you get to utilize your benefits. If you have a, the chronic critical or terminal illness, if you get sick or one of those things, and you have access for access to your money, willing that you have cash accumulation built within your policy to utilize it for anything that you want to.
[00:14:40] Kyle Church: And that's why I love it because you can take that money utilizing, instead of going to borrow from the bank at nine, 10%, You can now utilize it to take a partial loan or a full withdrawal from your policy to utilize for your current business to integrate that as without penalty or taxes being applied.
[00:14:55] Kyle Church: So that's what I love about it the most.
[00:14:57] Randal McLeaird: Okay. All right. So let's touch on that then. So [00:15:00] same scenario or as simple as possible, just so that we can make this as easy to understand as possible. So I get a, let's call it whole life and it's a million dollar policy because it covers those two houses that you were talking about.
[00:15:12] Randal McLeaird: For me, the wife, right? Two separate policies, one, what's the initial cash required? Because from my understanding there's a large down payment essentially that you need up front. How much money is that typically? And if it varies, it seems like the premiums go up on a monthly basis. Is that correct?
[00:15:28] Randal McLeaird: Absolutely. So here's how I've heard somebody describe it to me. Absolutely. And I want you to, refute it or give me your feedback on it. So you're paying interest on money before you, you actually get to draw it down. Absolutely. And you're paying for the benefit of using your capital, this is how somebody's presented it to me, because I've looked at these policies, man, and I'm like, okay, I get them and I have, I probably have a term, it's like a, I don't know, million dollar policy of some kind and that's it.
[00:15:56] Randal McLeaird: I've looked at the other side of it too. So explain to me what [00:16:00] you, counter that argument of Having your money, obviously you get the death benefit if you have the policy. So that's the benefit. But if I'm going to go borrow, like you said, I've got cash value sitting there and I can borrow against that.
[00:16:10] Randal McLeaird: What rate would I be paying then on the money that I've already put into this policy? So if I put, in this million dollar policy, if I put a hundred thousand dollars down and I'm paying twelve hundred bucks a month or whatever, then I don't know what that number would be. How much would it cost me to then borrow that hundred thousand dollars back out?
[00:16:25] Randal McLeaird: You know what I mean?
[00:16:26] Kyle Church: No, I absolutely understand that. And to your colleague's defense, that is true to an extent, right? And obviously, when we talk about building or essentially paying in advance of what the strategy would be, there's a lot of different variations. So just to keep it simplistic, When we talk about life insurance in general, right?
[00:16:45] Kyle Church: It can be this very convoluted thing for a lot of people and it's really not that right. So it can vary, right? Obviously you said, if you're putting in 1200, I tell people like this when we're talking about what did you utilize? So one, two things. You have to [00:17:00] consider what are you utilizing the life insurance policy for one, right?
[00:17:04] Kyle Church: And two, where's your current financial situation to where you can afford something that's going to one, be beneficial for your family or be beneficial for you. Because some people say, hey, I want to just use this policy just to build cash accumulation. I don't really care about the death benefit.
[00:17:17] Kyle Church: That's not really my words, or you have some people say, hey. I want as much benefit that I can get for my bank for my book, right? So it varies, right? It also varies by your age. It varies by your background associations. As far as they even look, as far as, your medical history, they look at your, criminal history.
[00:17:33] Kyle Church: They look at a lot of different things, because at the end of the day, this is an investment with the company, right? It's a contract. It's a contract between you and the company that set standards to say, hey, as long as you meet these qualifications, we can now approve you for this rating. So when we talk about it.
[00:17:48] Kyle Church: Let's just say for instance, right now, when we talk about borrowing. So there's two options. When we talk about borrowing money from the cash value of your policy, there's two options. So there's either a withdrawal, right? [00:18:00] A partial withdrawal or a full withdrawal, or you can utilize this option as, as a partial loan from yourself.
[00:18:07] Kyle Church: So it's just basically like you're borrowing money and you're putting it back in the instance of you paying that interest back. So for instance, right now, I would say on an average cash value life insurance policy for what you're borrowing typically ranges between three to six percent, right? Or three to five percent.
[00:18:22] Kyle Church: It just depends on the company, right? The product that you have. So you can't really, I can't really say, Hey, this is going to be set in stone for Randall as opposed to me. It goes with a lot of different variations, right? So obviously When we're talking about borrowing 3 to 5%, but the great thing about it is that I say, I typically say it can be a wash because why at the end of the day, right?
[00:18:45] Kyle Church: Let's just say, let's just say you have 50, 000 in your cash value life insurance policy, right? And you say, Hey, I need to borrow 15, 000, for this bird property that I have to buy, rehab, renovate, and, rinse it out. So I'm on 50, 000, 15, 000 that I got to put [00:19:00] into the renovations of the property.
[00:19:01] Kyle Church: Okay. Great. Instead of going to borrow that at a six to seven to 10 percent interest, why not go borrow from your life insurance policy to where you're now paying three to 4%, right? And then the great thing about it as your policy is performing, let's just say right now, the average return or the average, let's just say the average interest on terms of what your money is growing at right now is usually between 6.
[00:19:23] Kyle Church: 5%, right? That's the average return, right? So let's just say you go to borrow that money. Let's say you take out 3%, you take a loan from yourself. Let's just hypothetically say you take a loan from yourself at 3%, right? It's a wash because now your interest is growing at 6%. So you're still earning 3 percent on your money as that loan is being taken out.
[00:19:45] Kyle Church: So it's more or less, your money is gaining interest and you're still able to borrow from your policy of the 15, 000, right? And a lot of people saying yeah, you still take an income. You're still doing this. You're still paying back. But I say, yes, at the end of the day, you are. But my thing is, would you rather go pay seven to [00:20:00] 9%?
[00:20:00] Kyle Church: Or would you rather pay yourself that earn the interest and still be able to have cash accumulation grown within your policy? So that's where the context comes into this being. And then on top of that, with that being said, you're not paying taxes on the money. You're not paying any penalties because why you're paying your policy and the contributions that you're making in the monthly premium payment is now after tax dollars.
[00:20:25] Kyle Church: So that's why in a life insurance policy under tax code 7702 and 72 E, you're able to build tax free income within your life insurance policy, right? Because now you're paying with after tax hours and now the associations of where your money is growing is not attached to the actual stock market. It only mirrors.
[00:20:44] Kyle Church: So when we come down to it, that's the base points of how it typically works.
[00:20:48] Randal McLeaird: Got it. Okay. I've heard there are a few lectures guys, life, cool guys that are going out presenting this type of policy for real estate specifically because you're able to borrow against it. And I know several people that have [00:21:00] done it and it's.
[00:21:03] Randal McLeaird: So again, when somebody is coming to you and they want to set something up, let's, let's keep it with real estate specifically, because that's the audience, like what's the minimum that you're looking at and what are some things that people can ask either their financial planner, financial advisor in order to set them up or their attorney, even, when they're going through some state planning with their attorney in order to get this, the most protected coverage, in order to do it properly,
[00:21:26] Kyle Church: So there's different variations, right? So when we're talking about real estate specifically, I asked them one thing, right? What are you utilizing this for? What is this life insurance being set up for? What is this policy being? What is this strategy being set up for? Is this just for you to leave a legacy for your family, for you to leave income for your family, death benefit for your family?
[00:21:45] Kyle Church: Or you utilizing this to have cash value to be able to pay, for renovations to be able to have corporate cash for yourself is what I like to call it. Corporate cash.
[00:21:54] Randal McLeaird: Let's focus on that example then. Yeah. Yeah.
[00:21:57] Kyle Church: Absolutely. Yep. So corporate cash. So for instance, [00:22:00] so you may say, Hey, Kyle.
[00:22:01] Kyle Church: I don't have anything set up. Of course I have, my assets, as far as my home, if I pass away, I'll leave my family, let's just say with this property, I have, I have a portfolio of six homes, let's just say between California to, I don't know. I don't know the Midwest.
[00:22:15] Kyle Church: And I said, that's absolutely amazing. What I tend to ask what the follow up question around it was after that, what do you own these policies? What do you own these homes? Because at the end of the day, like I said, your family is grieving. You don't want to leave them with debt that they already have to configure or have to pay.
[00:22:31] Kyle Church: Because why? If you don't pay it, obviously the bank is going to own it. So I asked them and say, okay, what do you own these homes? They say, hey, I owe So Let's just say 500, 000. I said, okay great. Let's look at two constructs of what you're trying to do. So if you're saying obviously money is, contributions are going to be a factor as well.
[00:22:48] Kyle Church: If you're saying, hey, I'm only working on a budget of 500. It's going to be a tight fit because we're trying to squeeze, we're trying to put, a circle through a square and that just won't work, but we're going to [00:23:00] find a strategy, right? Because it's not how you start, it's how you finish.
[00:23:03] Kyle Church: So then when we go on the other part and they say, okay we have the idea of what we're going to strategize for you to leave your family legacy, but now let's talk about the business component, right? What are you utilizing this for? Okay. To have corporate capital. Meaning what if you wanted to go, buy another piece of real estate, or if you wanted to invest in another property, or if you wanted to, start lending out or, being a private investor, you can utilize this.
[00:23:27] Kyle Church: And like I said, some people like to call it infinity bank. Some people like to call it. Becoming their own banks, whatever you like to call it. But I just say having the access to beneficial cash and the great thing about a life insurance policy, as long as you have cash value within your policy, you can utilize that cash value for your benefit.
[00:23:43] Kyle Church: So a lot of real estate agents, they'll come to me. They say, Hey, Kyle, I want to utilize this policy. I don't want to have too much cash. I don't want to have too much debt benefit because why I don't want the cost of insurance to eat away at my cash value, right? Because when we tell people there is a cost of insurance, [00:24:00] right?
[00:24:00] Kyle Church: There is a cost to keep the policy in place that the company utilizes from the premium that you're paying every single month. So what I tell people is let's just say you're paying a thousand dollars a month. Your cost of insurance is 200 per month. You got 800 going towards the cash accumulation in your policy.
[00:24:15] Kyle Church: Let's just say minimum growing at a 6. 46 percent interest, right? Or worst case scenario, if we're in a down market, 3 percent or worst case scenario, 0%. But the great thing about it is that there's always a floor. So you never lose on growing on the money that's growing in your policy. So a lot of real estate agents, they say that's great.
[00:24:33] Kyle Church: I can utilize this to pay for things, to rehab the property, to buy a real estate. And some people I had a client six months ago, he actually took a hundred thousand dollars out of his policy because why? He front loaded, right? He fully front loaded his policy to meet the cash accumulation that he would utilize for him to now go and benefit to be invest in real estate.
[00:24:55] Kyle Church: When it comes down to it, those are the 2 major things. What are you getting the life [00:25:00] insurance policy for? And how is it going to benefit you in the future? And of course, what are the contributions that you're going to be making? Because if you're putting a thousand dollars, let's just say into a 500, 000 life insurance policy, you're going to see some cash accumulation in the policy, right?
[00:25:14] Kyle Church: Because of the compound interest that it's growing at and how it's growing and how the money is being diversified in, with the index strategy that is growing.
[00:25:21] Randal McLeaird: Yeah.
[00:25:21] Kyle Church: So those are the main two ideas when we're talking about real estate specifically.
[00:25:25] Randal McLeaird: So when you had one of your clients do a front load, what does that mean?
[00:25:29] Randal McLeaird: What does that look like towards beneficial?
[00:25:31] Kyle Church: So a front load, so let's just say a max funded IUL product, right? That's one of our flagship products is the index universal life policy. And what I love about the index universal life policy that it gives you a couple of things, right? It gives you a flexible premium, which means what the difference between a whole life policy and index universal life is that with the whole life.
[00:25:48] Kyle Church: You pay one distinct premium each month. So if it's 85, you pay 85 a month, but with a index universal life, you get flexible premiums, which means what, if your minimum payment is, let's just say [00:26:00] 150, as long as you support the minimum contract, minimum payment for insurance. Anything in excess of that goes towards a cash accumulation.
[00:26:09] Kyle Church: Let's just say one month. You're like, Hey, I want to pay, a 400 this month or next month, I want to pay a thousand. You have the flexibility of being able to, and we can go into a lot of more context with that, but you have the flexibility of being able to add more money into that policy.
[00:26:24] Kyle Church: Of course, as long as it's supporting the MEC, which is the modified endowment contract, that's basically the allotted amount that you can't go over. And, you can't go over. And if you go over that amount, then the IRS starts to look at it, look at that asset as a taxable asset. So that's why we typically like to keep it between that standard and say, Hey, your MEC, let's just say, for instance, that client's MEC might've been 70, 000.
[00:26:49] Kyle Church: On the year. So they have up to 70, 000, what contributing to this policy before it's looked at as a tax. So that's the great thing about it. And so when we [00:27:00] utilize this, a lot of people say, okay I'm going to put this money in, my money is growing. And when we talk about a max funded IUL getting back to that idea, we understand that if we put a thousand dollars in there each month, and the numbers can differ differentiate, because. Your age as opposed to my age is gonna be different. But let's just say for a $500,000 life insurance policy, they're putting a thousand dollars in the cash accumulation that you're seeing. Especially for someone that's my age, that's 30 years old, is going to be much higher and you are gonna see it much faster than somebody that's putting in a thousand dollars a month that's 60 years old.
[00:27:32] Kyle Church: Yeah. Because of course, their age, their health, their risk factor, if they have any mental disabilities or anything like that. So the company looks at that and that makes. An instance on one, what the cost of insurance is going to be, and two, how much of that cost of insurance is going to eat into the cash value of the policy.
[00:27:49] Kyle Church: So that's what it comes down to. So I would say the biggest thing is really just getting with the financial professional and seeing what works best for you and running the numbers, because like I said, it's not a [00:28:00] one size fit all option, right? We can always play with the numbers and see what best suits your situation.
[00:28:05] Kyle Church: And we can come up with a strategy that's going to help you meet the standards. Now, if you're pouring in. Let's just say you front load the policy, meaning you put 000 from day one. Of course, you're going to see cash value right away because why you're fully funding this policy to its max. So now you're going to see returns that are going to be much higher as opposed to you paying 100 or 200 per month.
[00:28:29] Randal McLeaird: Yeah.
[00:28:29] Randal McLeaird: Yeah, for sure. Okay. Have you invested because you're in the Police force, right? And you're doing this insurance and financial professional on the side. So how about investing? You mentioned bursary. You obviously understand some of these things and the concepts on the, okay.
[00:28:45] Randal McLeaird: So tell me about that.
[00:28:47] Kyle Church: Absolutely, man. Of course, pensions, I have a pension, right? It's great. It's decent, right? I had deferred comp, it's decent. I got rid of it because why? When I actually got into low cost index funds, what [00:29:00] six or seven years ago. I started seeing I'm like, dude, when I'm paying for this in terms of the fees and the taxes and things that are going to be deferred down the road, I might as well invest this money on my same on my at my own regard, do my due diligence.
[00:29:15] Kyle Church: And do the things that I need to do and eliminate that three to six to 7 percent fees that they're taking from me, and just put it towards my own investments. And so I think that was the start of it for me, because let's just be honest, especially work in the city and county of San Francisco. A lot of people don't, a lot of people don't know what they don't know, which is why they don't have, right?
[00:29:34] Kyle Church: They're just not informed. And so when I talk about people having great investments or making money or becoming a millionaire, I don't believe in luck. I just think it comes down to preparation, meeting opportunity, which equals success. If you're not prepared for the occasion, you're not going to have the best opportunities and you're not going to be prepared for the opportunity when it comes, just like I'm sure for a lot of people, when, after the 2008 housing crisis, a lot of [00:30:00] people were like I'm not going to buy a home because it's not going to benefit me in the future.
[00:30:03] Kyle Church: But then when you have those savvy investors who know the market, they say hey. Yeah, the market down. I can buy these houses at a low rate as long as I'm cash flow for now, and I can get through this turbulent time. I know coming out of this recessionary period. I know coming out of this bad time.
[00:30:18] Kyle Church: These houses are going to increase in value, and I'm going to be able to now increase the valuation of the rent that I'm getting every single month. So that goes with preparation and having the strategy in place to put you in the best position. And so what for me. I don't believe, like I said, I don't believe in it's a one size fit all option.
[00:30:34] Kyle Church: Like for me being a licensed financial professional, I don't believe that life insurance is the only way. I just think that it's one key to you investing in your future. Just like me, I look at fixed variable and indexing strategies, right? When we talk about variable strategies, we can talk about Roth IRAs.
[00:30:50] Kyle Church: We can talk about a 401ks. We can talk about a bunch of different things. Or when we talk about fixed options, we can talk about certificate deposits. We can talk about putting your money in Ohio savings account. Yep. Whatever. [00:31:00] It's just a matter of what works for you.
[00:31:02] Randal McLeaird: For sure. But I'm asking what works for you.
[00:31:04] Randal McLeaird: Oh, what works for me? I'm sorry. What works
[00:31:06] Kyle Church: for me, to be honest, I would say the majority of what I'm staked in is life insurance, right? Because I know the guarantees are there. I know that God forbid, if I die today, I'm leaving my daughter with well over 4 million in non taxable income. Leaving her with tax free income, and I know that I can utilize these tools to benefit me while I'm alive, and when I'm dead and gone.
[00:31:28] Kyle Church: And so that's where I'm at, and that's what I'm investing in right now. Of course, real estate is another thing that my wife and I do. My family has been in home care service support for elderly people with mental disabilities for almost 20 years now. And so a lot of that has been contributed to one buying real estate and utilizing those facilities for in home care support.
[00:31:47] Kyle Church: And so that's been a very lucrative business because let's just be honest with everything that's going on with baby boomers and people getting older, especially people like my grandmother, they're getting older and they're going to need services when they do get old. So it's a lucrative [00:32:00] business.
[00:32:00] Kyle Church: It's very low maintenance. I would say in terms of what the turnover ratio is, because a lot of these people tend to live in these facilities for three to four years, minimum. So if we're keeping these facilities and we're utilizing these facilities to be an aid to people now, not only are we getting the full benefit of the real estate, but now we have two businesses.
[00:32:18] Kyle Church: We have the real estate business, right? Which is the rental property, but you also have the in home care business, which is now funding, right? Or renting or paying the rent for the established facility base. So that's where I have my money. And of course I have my money in. A little bit. And I hate to say this.
[00:32:34] Kyle Church: I hate to say it. I have a little bit in Bitcoin, a little bit.
[00:32:37] Randal McLeaird: I wouldn't hate to say it, man. If you bought right, you're sitting pretty right now.
[00:32:42] Kyle Church: Yeah. But it's true, right? It's the new day and age gold. And I believe that, right? I do believe that it's going to have faith. It's going to have store value, right?
[00:32:51] Kyle Church: I just think a lot of people just don't know too much about it. That's why they're just scared to invest in it. And
[00:32:56] Randal McLeaird: so the
[00:32:56] Kyle Church: more you learn, the more you strategize and the more you plan for it, [00:33:00] the more you'll be more equipped to, to understand these concepts. And so that's where I'm at right now, and obviously, the stock market, like I said, low cost index funds, real estate, of course, cryptocurrency.
[00:33:10] Kyle Church: And then of course, life insurance, as far as my diversified portfolio.
[00:33:14] Randal McLeaird: Nice. Nice. So you have invested in group homes. It sounds like your family does group homes. Yeah.
[00:33:20] Kyle Church: Yep. So ARS, so adult residential facilities. Yeah.
[00:33:23] Randal McLeaird: So yeah, that's a very interesting business model. We had applied for the license that you need in order to do that.
[00:33:29] Randal McLeaird: And we were looking for homes, but you can buy like a three bed. The issue that I saw was. Just actually running the home, like the liability associated with running the home. And that was like one of the biggest things, but anyway, kudos to you guys for having that and setting up. It's, it is a much needed business model and type property.
[00:33:47] Randal McLeaird: Hey man, I really appreciate you jumping on. I'm going to throw your contact information, show notes. If you are out there and you're looking for some strategies and some ways to one, cover your life, make sure that you have insurance and you are covered. [00:34:00] I would highly recommend reaching out to Kyle.
[00:34:01] Randal McLeaird: He's a wealth of information as you can tell from chatting here. We didn't even get a chance to really talk about you being on the police force in, in San Francisco. But that maybe sometime I can catch up with you offline because I'm very curious about that as well. But hey man, again, I appreciate you jumping on, sharing your knowledge, sharing your information, and I wish you the best of luck in the coming year.
[00:34:20] Kyle Church: Absolutely. Same to you, brother. I thank you for having me on. And like I said, this is a platform to where you're letting people spread their word and spreading their information. So you can't beat that at all.
[00:34:28] Randal McLeaird: And
[00:34:29] Kyle Church: like I said, if you guys have any questions or concerns, please reach out to me. And if you want to know any more about my story as well, I'd love to talk with anyone about that.
[00:34:36] Kyle Church: So thank you for having me on right off the bat.
[00:34:38] Randal McLeaird: Oh, for sure. Thanks again. Catch you guys on the next episode. Did you know that 80% of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional? If you wanna stay up to date, the best way is to make sure you're subscribed.
[00:34:52] Randal McLeaird: So if you haven't done that, go ahead and do it now. We'll catch you on the next episode.