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116: How Whole Life Insurance is Predictable and Flexible
Strategic Whole Life by Infinite Banking Authorized Practitioners
Repaying Policy Loans vs. Maxing Out PUA Rider
When deciding between repaying a policy loan and maximizing the Paid-Up Additions (PUA) rider, prioritizing the PUA rider is advisable. Policy loans offer flexibility, as there is no mandated repayment period set by the insurance company, allowing for indefinite repayment, whether in two months or over ten years. In contrast, utilizing the PUA rider has a specific timeframe, making it crucial to take full advantage of it annually. Contributions to the PUA rider enhance the policy's foundation, increasing cash value and eventual capital availability after the loan is repaid. This approach creates instant equity in the policy while ensuring access to funds through policy loans. Paying into the PUA rider is akin to overpaying a mortgage, but with the added benefit of liquidity and compounding value that directly benefits the policyholder and their family. The PUA rider not only increases the value of the policy but also offers more death benefit protection, reinforcing its importance over standard mortgage repayment strategies. Ultimately, investing in the PUA rider can be a superior choice compared to simply paying down a mortgage, as it enhances both liquidity and the overall value of the policy.
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