This article explores the pros and cons of Veteran benefits including the Survivor Benefit Plan (SBP) and Veterans Group Life Insurance (VGLI). It points out the lack of financial education for Veterans and highlights the potential utility in alternative strategies like the Infinite Banking Concept (IBC) with tax benefits for building a lasting financial Legacy. It encourages Veterans to explore options beyond traditional plans and offers resources for further education and assistance.
Veteran Edition: Exploring the SBP and VGLI
Written by: The Legacy Project
While we dedicate this month's article to Veterans, it is also relevant to those with a Veteran in their life. As a Veteran company, we aim to provide insights into the various benefits Veterans can leverage for wealth-building and legacy planning. Sadly, most Veterans do not have access to impartial advice that covers all the options available, along with their pros and cons. Therefore, "please turn off your cell phones and hold all your questions until the end of the brief."
Suppose you have recently separated from the military or have been out for a while. In that case, you may feel your military career did not prepare you well enough in finance. Although we remember having to sit through safety briefings and, for the newer generation of Veterans, passing the Cyber Awareness Challenge, few to none of us received any classes that discussed the topic of money. When we attended our Transition Assistance classes, we were bombarded with things like Survivor Benefit Plans (SBP), Veterans Group Life Insurance (VGLI), VocRehab, GI Bill, VA Disability, and many more, but with minimal guidance.
Our goal at The Legacy Project is to assist you in securing your future. Whether you prefer SBP or VGLI, we are here to provide guidance and support. We understand that life can be unpredictable, and it's easy to feel overwhelmed when facing major decisions like retirement, relocation, or a new career. However, we are here to help you navigate these challenges with purpose and clarity. It's common to experience doubts and fears, but don't worry; we've got your back! We're here to provide you with the knowledge and wisdom necessary to create a confident action plan and move forward confidently.
What exactly is a Survivor Benefit Plan (SBP)?
For those who are not familiar with the SBP, it is a government program exclusively offered to military members that provides financial assistance to their families after the Veteran's death. It's another variant of life insurance with a unique feature. The SBP is an automatic election, and once enrolled, the Veteran pays a fixed cost for 30 years or until their death. If the Veteran does not opt-out, a decent percentage of their retirement pension (6.5%) goes towards paying the premiums. If the Veteran passes away, their surviving dependent(s) receive a percentage of their monthly retirement pension until the primary dependent dies. In summary, the SBP combines life insurance and an annuity: the Veteran dies, and their primary dependent receives some money for the remainder of their life. Since Veterans are automatically enrolled in the SBP, approximately 80% of retirees participate in the program.
What are the "pros" and "cons" of this plan?
Setting up a Survivor Benefit Plan (SBP) can be an easy way to ensure that your loved ones continue to receive the pension you all worked hard for during your 20+ years of service. If you sign the dotted line and set aside a few hundred dollars every month from your pension, the dependents of Veterans will be taken care of in case you pass away before your dependents. However, are there any potential downsides to this plan?
To begin, it is only after your death that the program's benefits become apparent. If your dependents pass away before you do, you will not receive any return on your money. Moreover, if your children are over 21, they will no longer be considered dependents. The family will also receive only 55% of your pension, which can significantly affect your spouse's quality of life. Additionally, the Veteran is paying for a life insurance policy that lacks any of the significant features and benefits of other life insurance policies.
What exactly is Veterans Group Life Insurance (VGLI)?
VGLI is a program designed for veterans who had Servicemembers' Group Life Insurance (SGLI) while serving in the military. The cost of the program depends on the amount of coverage you choose and your age. The coverage options range from $10,000 to $400,000, depending on what you selected while serving in the military. VGLI is like SGLI for veterans, providing coverage and protection to those who have served our country.
What are the "pros" and "cons" of this plan?
There are some significant advantages to the VGLI plan for Veterans. One of them is that no medical exams or lengthy underwriting are required if the Veteran accepts VGLI within 240 days of their service. Depending on the Veteran's health upon retirement, not having a medical exam can be a good thing. Another advantage is that transitioning from SGLI to VGLI is incredibly easy, and there's no need to do deep research on life insurance options. If SGLI worked well for you while you were in the military, it's probably a good idea to stick with it. However, it's important to note that just because something is "military grade" doesn't mean it's the best product on the market.
It's important to consider other options apart from the Veterans' Group Life Insurance (VGLI), especially for Veterans who do not have life-threatening disabilities. VGLI premiums increase every five years and may become too expensive, especially if you solely rely on your pension to fund it. Moreover, you might be without adequate protection if you were not comprehensive enough with your SGLI coverage. VGLI is like renewable term insurance, which means it won't accumulate any cash value over time. Cash value is a crucial but often misunderstood component of life insurance. We will discuss this later, but remember that cash value is the foundation of a personalized banking system, one of the core topics covered in The Legacy Project curriculum.
**For more information about the difference between term insurance, whole life insurance, Index Universal Life, Variable Universal Life, etc., check out our website
The $10M question: What should I do with my pension to guarantee a Legacy?
Although we are not licensed Certified Financial Planners (CFPs), we are experts in Legacy planning. We can help you determine whether you are making the most of your Veteran benefits for you, your family, and your Legacy. At The Legacy Project, we have spent years studying wealthy families and individuals, teaching the process they have used for over 200 years to build, create, and keep lasting generational wealth. This simple process is known as the Infinite Banking Concept (IBC), which the late Nelson Nash coined in his best-selling book "Becoming Your Own Banker." The IBC process harnesses the power of a well-oiled machine that predates the IRS tax code and, therefore, allows the practitioner to create a personalized banking system with guaranteed growth that you can access tax-free. So, what is this powerful machine? It is a High Cash Value, Dividend-Paying, Whole Life insurance policy from a Mutually Owned company. We know that it's a mouthful, but as we say in the military, words have meaning.
The Infinite Banking Concept is, first and foremost, a process, and the machine is the properly structured policy. Wealthy individuals and families have used this process for over two centuries. We are talking about the Rockefellers, the Stanleys, the Rothschilds, and even Tony Robbins, as well as Coach Harbaugh from the University of Michigan, one of the highest-paid coaches in history, who implements this process. Since the machine used to implement IBC is a properly structured Whole Life insurance policy, it can replace your VGLI and SBP and drastically improve your benefits!
Make an Informed Decision
As a retiree who has served your country with honor and dedication, it's time to prioritize your financial well-being and that of your loved ones. While the military offers benefits such as SBP, VGLI, and COLA, it's important to note that these may not always be the most financially sound options. Instead, you may want to consider an IBC policy after carefully analyzing your situation and financial goals to ensure that your Legacy is meaningful and manageable.
SBP, as stated before, offers limited flexibility and control. You'll forfeit 6.5% of your pension for a 55% annuity payment to your spouse, which may seem like a significant sacrifice. Additionally, VA disability payments will cease upon your passing, so it's crucial to ask yourself whether SBP is genuinely the best way to protect your spouse in the future. It's a tough decision, but we owe it to ourselves and our loved ones to consider all options carefully.
Veterans often rely on VGLI as a safety net for their insurance needs. However, as we age, our risk factors increase, and so does the cost of VGLI, making it difficult to afford it when we need it the most. We have served our country with pride and dedication, and we deserve better than worrying about whether we can afford basic insurance coverage.
Let's not settle for less when we deserve the best. We have worked hard and should ensure we set ourselves up for the best possible future. One way to do that is by considering an IBC policy. It's like having a customized banking system to protect and grow wealth. However, it's essential to understand that this is not something that your neighbor or cousin can put together for you. It requires tactical assembly, and working with a team of experts who can tailor a policy to meet your unique needs is crucial. The benefits of having a well-designed IBC policy are incredibly powerful. Some of the most powerful attributes of this asset include:
· No Income Limitations (unlimited deposit amounts)
· Guaranteed and Uninterrupted Cash Value Growth
· You can access the Cash Value Growth (and Dividends) Tax-Free
· The Cash Value is guaranteed to Exceed your Premium Deposits
· You have Complete Control over your Cash Value – NO middleman
· The insurance reserves back Your Cash Value – it is a Tier 1 Capital Asset
· Your Cash Value is Protected from Judgements, Liens, Bankruptcies and Divorce
· This is a specially designed Life Insurance policy, so the Death Benefit will pay (TAX-FREE) many times greater than the Cash Deposited into this Financial Asset
These IBC policies are designed to offer more than just a death benefit. They provide a unique way to safeguard and increase your wealth without market risks, volatility, or uncertainty. These policies are not an "either/or" asset but rather a "this/and" asset, which means you can use your cash for everyday needs and still build a nest egg for your future. With our guidance, you can learn how to use your premium deposits to fund your lifestyle and create a Legacy of wealth that can benefit future generations. Many of us have faced financial uncertainties, both during and after serving in the military, and it's time to change that. We can empower ourselves with the knowledge and tools to secure our financial futures and leave behind a Legacy of strength and stability for our families. You deserve nothing less.
Recapturing the money that is slipping away every month is essential. We can create a robust plan that will increase your cash flow today and set you up for a great future. Imagine having the freedom to enjoy your retirement without worrying about finances. That's everyone's dream. And the best part is that The Legacy Project team is not just here to set you up and leave you alone. We are committed to ongoing education and support, ensuring you and your family never feel lost in the financial jungle. The best part? There is no cost to you, and we don't charge any membership fees.
There is No Such Thing as Perfect Health
Let me begin by stating something vital: your health status does not determine your financial future. Whether in excellent health or with a 100% VA disability rating, options are available. Even if you think you're not insurable, don't lose hope! There are still options out there. All you need is someone in your corner who is essential to you - whether it's a spouse, children, dependents, or even a business partner - and you can take advantage of these life-changing policies today.
Consider this: securing your financial future also paves the way for future generations. With an IBC policy, you aren't just building wealth but creating a Lasting Legacy. So, let's seize the day, explore these opportunities, and work towards financial freedom together!
How to Get Started
Although the Infinite Banking Concept may not suit everyone, it is a viable alternative to traditional SBP and VGLI strategies. IBC offers flexibility, control, asset protection, and liquidity, allowing you to establish a long-lasting Legacy. If you want to learn more, we suggest you watch our presentation, read our newsletters, and schedule a call with one of our strategists. We are committed to educating our members on how this process can help you eliminate debts, grow your business, and even secure a tax-free retirement plan. You are your most valuable asset, and we want to help you create a successful financial future free of doubt and anxiety. You have served your country; now it's our turn to serve you.
Comments