Understanding Life Insurance Solvency – Episode 395

Kim and Spencer take a listener’s question about a topic that is making the headlines all around the world which is dealing with the changes in Congress. Also, they dive into life insurance solvency.

Best-selling author Kim Butler and Spencer Shaw show you how to take more control of your finances. Tune in to The Prosperity Podcast to learn more about Prosperity Economics thinking and strategies today!

Do you have a question you would like answered on the show? Please send it to us at and we may answer it in an upcoming episode.

Links and Resources from this Episode

Show Notes

  • The insurance solvency – 0:51
  • Inflation numbers – 3:21
  • Bank rates – 3:31
  • Life insurance company’s solvency – 3:45
  • Very large transactions of life insurance companies – 5:32
  • What insurance companies are doing with their money – 7:42

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SELF-INSURANCE: A DIY Project to Avoid!

Ever take pride in something you did on your own? It could be something as simple as preparing an expense tracking sheet or as involved as a home repair. American society celebrates those that are self-made. It’s why we hold entrepreneurs on a pedestal; like Steve Jobs that took Apple from a garage to the iconic company, it is today. The American dream still holds power today, founded on the principles of working hard, being self-sufficient, and tackling the world one day at a time.

But when it comes to insurance, is it the right choice to “do-it-yourself”? “Self-insurance” is the idea that one can insure themselves by simply building more assets. Unfortunately, the reality of “self-insurance” is that it is no insurance at all.

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Should You Keep or Surrender a Universal Life Policy?

“You got to know when to hold up, know when to fold up, know when to walk away, and know when to run.”—Kenny Rogers, “The Gambler”

Recently, we gave you the good, the bad, and the ugly about universal life insurance policies. As it turns out, there isn’t a lot of “good” for aging policy owners who are seeing their premiums skyrocket. Lawsuits continue to mount from policy owners who feel they have been misled. Some realize their “permanent” policies will expire before they do! Others realize their policies will lapse if they cannot make ever-increasing premium payments. This was not what they thought they signed up for!

Last year, state regulators in New York issued a cautionary alert to consumers about universal life insurance with this all caps, bolded warning: “YOUR PREMIUM PAYMENT AMOUNT IS PROBABLY NOT GUARANTEED AND MAY INCREASE.” In 2018, the Texas Department of Insurance put out a similar warning. A short informational video illustrated how universal life policies can lose value and even lapse due to the ongoing costs, especially in timse of low interest rates and underperforming investments.

Now, warnings are great if you are shopping for life insurance. But what should you do if you already have a universal life policy that lacks guaranteed level premiums and a guaranteed death benefit? In this article, we’ll outline options and actions that can help protect you from an imploding policy.

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The Self-Directed IRA: Pros, Cons and FAQs

During his presidential run, Mitt Romney came under scrutiny when it came to light that he had acquired something of a fortune in his self-directed IRA. According to, Romney’s IRA was worth between $20.7 and $101.6 million. How did he acquire such wealth in a qualified plan environment?

The answer lies in the descriptor “self-directed.” Because Romney this had a self-directed IRA (aka SDIRA), he was able to use his IRA to fund venture capital and private equity investments inside his retirement account. When Bain Capital (in which Romney was a founding partner) became highly successful, Romney’s wealth ballooned.

While few people have the ability to turn limited retirement plan contributions into many millions, the financial container Romney used to grow his investments tax-deferred is not reserved for multi-millionaires. Any American can open a self-directed IRA and use it to invest in (almost) anything they wish.

In this article, we outline self-directed IRA pros and cons and the basics of self-directed IRAs, including:

  • What is a self-directed IRA?
  • What can you invest in within a self-directed IRA?
  • What are self-directed IRA pros and cons, advantages and disadvantages?
  • Who might benefit from one?
  • What is the process and how do you begin it?

Then at the end of this article, we’ll list links to additional resources for further information.

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Safe Haven Assets for your Dollars


Where can you keep your money where it will be safe!? That’s what many investors are asking themselves right now. They are looking for safe haven assets and weighing their choices. Today we will review options such as T-bills, bonds, gold, bank products, and our favorite safe haven asset!

But first, let’s be clear about what is NOT a safe haven asset:

It’s not a more “conservative” stock portfolio. The S&P 500 is down a whopping 22% in one month, but we’ve seen losses in virtually every sector. Industries that usually provide stability or profits during times of volatility and recession are only faring a bit better:

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Building a Portfolio of Multiple Life Insurance Policies

Building a Portfolio of Multiple Life Insurance PoliciesAn investment portfolio will typically contain a range of diverse investments. With different asset classes, industries, and financial vehicles, a well-designed portfolio prevents you from “putting all your eggs in one basket.”

Many portfolios begin quite simply, for instance, with a savings account and an index or mutual fund. Then, as the portfolio and its owner matures, other assets are added. Over time, a portfolio might include:

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