The Two Policy Limits: EPP vs. PUA [Infinite Banking FAQ]

We had a question here, follow up question. This doesn’t apply with EPP. Maybe define what that is too.
I think every company cause has different names for PUAs. So I’m mainly familiar with guardian and mass mutual, they call it unscheduled and scheduled PUAs. That guardian mass mutual has ELAR additional life insurance rider or Lisser life insurance supplemental rider.

Matt, can you explain the EPP PUA? Is that like a scheduled PUA? 

It was my question but  from what I understand a PUA is that it was with Penn mutual, but they’re saying like what the EPP PUA, you said like their traditional would be seven or eight years pay then after that you stopped that.

But what the EPP PUA, you’re able to keep the max fund or a longer amount of time. Let’s just say, you put with an EPP PUA where you do a maximum of a hundred thousand and after that seven year, eight year limit, you can’t do the maximum anymore. You can only do a certain amount of that. But with EPP you can set up for a longer period of say, 20, 30 years, if you wanted to.

To me, it just seems simple. if you plan on using this as a bank account for the long run anyway, for investment purposes, that would make sense just because you already have a policy open, you can just keep funding it for the rest of your investing years.

Got it! I would say mass mutual is something similar in the sense that their funding period is flexible, where you can go lock, 20, 30 years flexible.

I think it’s just different. They call it different things. I would have to look specific at that and I have some pen-pal I’ll go look at the true definition and probably reach out specifically without, or send it out to the group.

I think, as Tyler said, like all these companies have little nuances, right? Like I got a Penn and I’m aware of this,  like you say, you can keep paying it for awhile after your initial period of six or 10 years, whatever you set it up based on your situation. But the downside that they have is that you got to keep putting to it every year where like a guardian, they don’t have that long-term flexibility. But you can choose not to pay the rider one year and take a break. It’s different. I think this is where you have to look at multiple policies and figure out based on your situation. Some people in the group are business owners, right? Business owners have a lot of variability in income. Whereas if you’re just a straight up salary guy, you may want that more. Their cashflow is very stable. Therefore you’re not going to have these big fluctuations so you would rather do that arrangement where you don’t have that flexibility, but you have that long-term flexibility in that respect and policy is changed too. 

When I was choosing between, or when I was building my policy, I looked at both or I spoke to the agent about doing both an EPP and EPP PUA. Both of them, you have to make the payment so that the premium don’t lapse the contract. They both had the same catch-all provision where you have one year, where if you don’t make your fee, you can fill it up the next year too. If you were to not do it, then you would lose it. In terms of losing that rider and had to average a certain amount over any three year rolling period. It’s not really where you can have if you were to miss it one or not. It’s an average over three years, but I opted with the EPP PUA  because my funding, I could max out my PUAs for 62 years. So I started when I was 34, I can put in 120 K every year until I’m like, a hundred. And what I was told was the ROI is 0.1% about 0.1% less, but that  will essentially make up for it in some flexibility of making the payments and being able to do it for longer. A sacrifice for a little bit of return for more flexibility and being able to max stuff more.

Yeah.  I think I might’ve talked to the agent about the same thing and he pretty much said that if it came down to it and you really wanted to stop paying, you can say after the eight year mark or whatever, just say “This is paid up now and I’m not going to make any more additions to it”. Obviously, then you can’t add anymore, but that’s where the flexibility is.

And I think, truly, it’s the policy design, because the flexibility means different things or has different values. Someone wants to have flexibility of the different amount of being able to put in different amounts throughout the year, or they want to be able to put it in for a long time. Those are the main two different flexibilities. And I think there’s multiple companies. Each company has its different benefits based on their policy limits. Just keep in mind that for that long funding period, I think as Lane mentioned it and Matt also it’s yeah, three years. I think they do a look back three years on that average. So say maybe you, you had the ability to fund it a hundred thousand if over that three years, that average you only funded it to 30,000. From that point forward,  the max you can fund, it would only be up to that 30,000. It drops down. Just be aware of that. Now I get it, I don’t think there’s one pro or con there there’s one better than the other. It’s really what your goals are and what you want to achieve that. 

The good thing all you guys have set up and it gets always constant. It’s always there. I don’t know. Personally, I always like to move stuff around every so often. It’s the more radic so that kind of just fits my style.

I don’t want to speak bad about any other companies. I would say there is a company where you’re able to not have that three year look back and still have a pretty long funding flexibility, and maybe not 60 years that 20 or 30 year mark, where that’s a pretty good funding period for the purposes of this.

My question directed to what we were talking about was, you were talking about being able to stuff a little bit more. You have those new fixed funding periods and I think in that other scenario where you have the long funding period, that the same thing doesn’t apply. You’re already at the max. You’re hitting the max every time.

Got it!

I think some people, they just don’t want to get a another health screening cause they’re freaked out about not passing or something like that or they just don’t like health screenings so I could see why some people don’t. We just want to set it, forget it.

Or if you’re going to plan on getting out of the policy, you would have to pay expenses all over again.

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