That question about the index participation, I guess that kind of makes it almost half an IUL. Is that right?
Are you talking about Guardian Index Participation on the actual IVC. So if you selected that, that makes it like a hybrid IUL is there right. It’s still whole life so that you have less risks on there. But so for those of you. That aren’t aware of what Mary’s saying is it’s Guardian has Index Participation feature on it, where instead of receiving the stated dividend rate, which is currently 5.65%, you would be able to get index rate based off the S and P 500. There is a company caps of 11% and 4%, and then they charge you 2% to get it. So right now, the max you could get is 9% and the law of 2% as your dividend rate instead of the 5.65. So it’s not in addition to the 5.65 it’s instead of the 5.65. And what it’s doing is it’s indexing the S and P 500. So on your policy anniversary date, it’ll look at what the S and P 500 was at last year and then what it is at this year. And then that percentage rate is what you’ll receive.
But the trade-off, what is the trade-off when you click that box?
It’s a free thing. It cost there’s zero cost for it to be a rider on your policy. So it’s there, but if you use it, if you allocate any money to it, then they charge you a 2% on the return.
You can choose anywhere between zero and a hundred percent participation. It’s nice where you don’t have to allocate all of your funds to it. For me personally, the reason why I chose those whole life is for kind of the stability. You know what you’re going to get. I already have some exposure to the stock market, through retirement accounts and other things. That’s just me personally. I may use that feature when there’s a major stock or a market correction. It tanks a portion of the funds to receive that potential higher dividend, but the risk is more unknown. It’s based on your policy anniversary date so everyone’s returned maybe slightly different and basically it just index annually.
And that kind of, we’re not going to get into this topic, but that kind of transitions into what you had at a certain point. In my opinion, people who, if the whole life kind of banking to the IUL or some people call this a philosophy banking where it’s got stock exposure. And to me, that’s the end game, right?
If your net worth is four or $5 million or more, you’re in cruise control and you’re not going into individual deals or investments or rentals, you know, you just want like a no-hassle single-digit greater return. That’s what that product is for. And I think at this point I’m not getting it personally, but I think one of you guys would probably push me at some point to make more content around it. We’ll create more videos and information about that product here in the future. But for now, you know, the infinite banking is for folks who are million dollars to five, $6 million net worth who are taking, putting the money in there. We’re getting a little nice rate of return, tax-free off the table, creditors and litigators, but to take the money right back out and invested in deals or whatever you’d like to do with it.