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Most service members walk into the SBP decision the same way: someone hands them a checkbox at out-processing and they default to yes. But the Survivor Benefit Plan is a 30-year financial commitment with no cash value, no inheritance, and no way out once the window closes — and most people never study it before signing.
In this episode, Brian and Hans break down everything you need to know about the Survivor Benefit Plan before you're forced to make the decision — including when it makes sense, when it doesn't, and how whole life structured for IBC can make the conversation almost irrelevant if you start early enough.
Chapters:
00:00 – Opening segment
01:00 – What SBP is and why it matters at retirement
08:25 – How the premium and benefit structure works
14:05 – The three major problems with SBP
18:55 – When SBP actually pays off
26:35 – DIC: the VA benefit that changed the math in 2023
37:00 – The whole life alternative: side-by-side comparison
42:50 – Starting early vs. starting at retirement: the 10-year difference
49:35 – Full SBP vs. partial vs. whole life only: running the scenarios
57:40 – The hybrid approach
1:01:00 – Who SBP is right for
1:04:05 – Closing thoughts
Key Takeaways:
The question isn't full SBP or nothing. Most people never realize they can elect a partial SBP — say 25% — and get a guaranteed annuity for their spouse at a fraction of the cost. The checkbox you get handed at retirement doesn't show you that option.
Every dollar into SBP disappears into a government system and never comes back. There's no cash value, no policy loan, no asset to transfer. If your spouse dies before you, you've lost every premium paid with no refund and no recourse.
The nightmare scenario for SBP isn't dying young — it's living long and watching your spouse die first. You pay 30 years of premiums, your spouse predeceases you, and the government keeps every dollar. With whole life, the asset survives.
Know yourself before you decide. If Parkinson's Law runs your financial life and you'd spend the premium money anyway, take the SBP. Forced protection beats no protection. But if you have the discipline and cash flow to build something real, the whole life path wins on almost every timeline beyond the first few years.
Should I elect full SBP or not?
The quote worst case scenario here financially speaking
is that you live a long life.
Every dollar we pay into this,
it goes into a government and system,
and it disappears.
We can't access it, we can't ever get it back.
Do you have a $2.5 million Rolls Royce engine
that's giving you this 100% VA disability tax free for life?
When we're talking about SBP,
we're inherently talking about...
You're listening to Remnant Finance
The show that brings you unfiltered takes
on unconventional strategies
to sever your dependence
from the banking industry and Wall Street.
We're Brian and Hans.
Military pilots turn economic insurrection
as an infinite bank in practitioners.
We strive to keep prosperity simple.
We've learned that the most important aspect
of your personal financial journey
is the one that is almost entirely ignored
by the conventional model, the process of banking.
Our goal is to teach you how to build a strong financial
foundation, growing, leveraging, and protecting your capital
while optimizing your financial order of operations.
So you can live the life you want to live now and in the future.
Listen each week as we challenge the status quo
and provide uncensored takes on finance, economics,
and current events now back to the show.
Good morning to you, brother.
Afternoon where I am.
Good morning.
Yeah.
Yeah.
Seems like it's been a few weeks since I've been on
a lot of stuff happening.
But yeah, here we are in a lot.
What's that?
That's it. You're a busy boy.
Yeah, I've been busy.
Yeah, a lot of stuff happened in the world right now.
We're in the middle of this Iran attack
and the markets are nuts.
Everything's crazy.
But that actually is a good point
for what we're going to talk about today.
Because what we're talking about today
is going to be survivor benefit plan for the military.
I had a couple of questions on it just in the last couple weeks
and sort of did a really deep dive into it
to talk about what the best options are.
And there's really not a clear cut case for everybody.
But sometimes it makes sense.
Sometimes it doesn't make sense.
It depends on where you've positioned yourself.
Up to this point in your career, how old you are
and what your outlook is as far as survivor-related death.
I mean, excuse me, as far as service-related death.
Yeah, it's a good topic
because it's something that anyone who gets through
the 20 years and gets the pension
is going to be thinking about.
I obviously myself did not make it to 20.
And so it's not something I personally dealt with
though when I was on that ship in Virginia,
I did a few analysis for guys that doesn't make sense
for me and I've limited knowledge.
I know what it is.
I've done an analysis where I ran through the timeline
of the numbers at what point does it make sense?
If you die in this period, here's the value
and then here's the point where it becomes a net negative.
If you live this long as the individual with a pension.
So it's kind of turning this pension into an annuity effectively.
And then we have a lot of comparisons to life insurance.
And I'd say most of our clients and audience probably
tends towards I'd rather accomplish the same goals
using properly structured whole life.
But there's a lot of folks that just want to see
in a vacuum as this makes sense for me to do this SPP
because it's a decision you're going to have to make.
And if you're not well read on it, you might make
a sub optimal decision.
So Brian's been studying it a lot more
and being in a position where you will have a pension one day,
you're going to have to make this decision
and is it worth it for you?
And so we'll talk through that and let Brian
kind of kick off some of what he's been studying for it.
Yeah, and so for anybody listening, this completely scales.
I mean, if you're an enlisted retiring member,
you're an E7 or all the way up to O6, O7, it doesn't matter.
The numbers will scale based on your inputs.
So what I ran here, and the reason I say that
is I don't want to scare somebody away
who's a different rank, higher rank, lower rank,
I just use the numbers that I'm going to be looking at
as a looming retirement here relatively soon
at the O5 level.
So I ran those numbers because I wanted to,
really what this came down to is I was doing a self study
as well as preparing something to talk about
and be able to talk to other people about this.
So this is a personal analysis as much as it is,
which I could talk about my personal numbers
and why I'm going to choose what I'm going to choose as well.
But yeah, it's going to be based on, you know,
for Air Force, Lieutenant Colonel,
for O5 retirement for military.
But don't run away if you're retiring
at a different rank or a different number of your structure,
the numbers just move comparatively.
Yeah, so just starting off, like when you look at that,
I know you said you didn't get to 20 years,
what do you do, 14 hens?
Yeah, about 14 and a half.
So I separated, but I don't have,
I never had the option for the pension.
I was in the class where I was in that time period
where I had the option to switch the blended retirement system.
And at the time, I said, well, I'm a shoe and for 20,
I'm definitely going to make 20, you know,
I've got a great career.
So of course, I'm not going to opt in for a lesser pension
where you go from 50% to 40% on the pension side
in order to, with hindsight,
I should have done the blended retirement
because who I did not foresee the events
of the last five years, totally derailing that retirement.
I'll be a few years away from that 20 year mark now.
But yeah, so I did not, this was never in the cards
for me to have this decision point.
So let's hit what, you know,
what your background is with the military.
That's even another change.
You know, it's funny you threw that kink in there
because I didn't think about the blended.
And I was, you know, my, because I didn't take it,
I was far long enough my career made no sense.
So on the 40% basis for the, for the base pay
that that changes the metrics even more
and you really should analyze this even more deeply.
We're just going to stick with what we've kind of prepared.
But yeah, if you're in the blended retirement system
planning retire, you're going to have a lower base pension,
which means a lower survivor benefit plan.
So it's even a bigger impact, considering you're making
the same money throughout your career.
So for those folks, if you're young, especially, you know,
you're let's, let's say the 10 year mark
where most people are making that decision, like,
should I stay or should I go?
You might want to start thinking right now
if you're choosing to stay about starting a whole life plan
so that you're ahead of the game.
And I'll show you why that's important with numbers here.
But what it really comes down to is a lot of our clients
are at the, I'm retiring soon.
I'd say so many of our clients are within a year
or post retirement by one year in that ballpark.
And those people are almost going to all be
the old legacy retirement system
where it's 20 or nothing, you get 50%.
I say now, I don't know when the cut off was.
I was in the window where you could choose.
I think you were too.
But at a certain point in the last couple of years,
anyone joining didn't have a choice.
You're going to be in the bread retirement system.
And so I'm guessing here, but I would say that anyone
who's in the, I was forced to do the blended retirement system
has at least 15, maybe 12 years
until retirement anyways.
And I think that if that's your situation,
you can put yourself in a situation to where
you don't really need to worry about this
because you can optimize so much better.
We're talking about the decision point of you're at 20.
You're starting, you know,
if you're going to make a comparison to a whole life policy,
how can you, how can you achieve the same goals
possibly more optimally with a whole life policy?
Well, you're 12, you got a 12 year jump on this,
you can certainly do it.
It's not even, it's not even going to be
a hard decision for you.
And so think about that, understand what the SPP is,
understand what you, the decision you will be making
in the future, but also know that if you start right now
and give yourself the head start with the whole life option,
it won't even, it'll be a no brainer down the road.
All right, so yeah, that's absolutely true.
And actually, the first case we'll look at
is a 42 year old O5, 20 years in service,
starting whole life now and what that metric looks like.
So it's perfect for those people that are at the end too,
but so the really, you know, the question
that everybody faces whenever they get to this
is should I elect full SPP or not?
And most people only look at that
as a metric of full SPP.
They don't even analyze, should I do a partial
survivor benefit plan.
But and most people, what do they, what do you think they do?
They get, they get handed this paperwork at retirement
at their 20 year mark or when they're ready to walk
and they go, do you want survivor benefit plan?
Typically it's somebody in the financial realm
or whatever you guys call it the Navy.
For us, it's, it's like MPF and they just give you
this choice, yes or no, even though that's,
there's a big gray area between.
So most people in the hurry haven't really studied it.
They default to yes, it's, yeah, yeah,
I want to make sure my wife's taken care of.
And I respect that, but it's not always necessarily
the best thing and it's not a scam.
Like what SPP is before we jump into it
is just like an annuity that has no asset value.
So you're going to pay a certain premium for 30 years
or till age 72, whichever one comes later.
Should you die before your spouse,
she's going to get a percentage of your base retirement pay
for the rest of her life and then it ends.
So there's nothing left over.
So we'll talk about some problems with that too,
but it's absolutely not a scam.
It's just not the only option.
So let's look at, like how it works.
If you choose the yes, you say I'm going to get
100% of a retirement pay.
It's a 6.5% charge for 30 years or till 70 like us.
But 72, I'm sorry, I said 72,
because I'm putting 30 and 42 together
for that 20 year retiring officer.
It's 70 years old.
So let me make that correction right now.
30 years or age 70, whichever is longer.
And when you're saying 6.5%, you said earlier,
you pay a fee to opt into this option
where if you die the pay continues
or a portion of the pay continues for your spouse
after you pass.
But when you say fee, really, it's basically just
do you want your full pension
or do you want a reduced pension effectively?
The net of that.
Well, that's a premium.
So if you look at your entire pension
for easy numbers, say it's $10,000.
I don't think many people get that amount
less than like a general officer.
So let's just say it's $10,000.
They're going to take 6.5% of that.
Every month as premium for the survivor benefit plan.
And that's just a graduated number.
If you elect 100% of your retirement pay
as the base amount that they're going
to take the premium off of.
So in exchange for that, your spouse
will get 55% of your base pay.
So using those easy numbers again,
if it was $10,000, he or she is going
to receive $5,500 a month once you die if you die first.
And you're going to pay $650 a month for that
for 30 years, or until age 70, whatever comes first.
Make sense?
Yep.
So $650, my options are either just
to A or B, simple options.
I can collect $10,000 and again, like you said,
we're going to use $10,000 because it's easy math.
It's easy to remember.
Higher than most people are going to get.
But option A, I choose to opt out of SBP
and I get $10,000 a month as my pension.
And when I die, that pension dies with me.
Or option B, I get my $10,000.
I pay $650 a month if I die in this time frame,
then my wife gets $5,500 on going as long as she lives
until she dies, okay.
So those are two options.
So to actually put some numbers on this,
crazy computer.
So for me, like this is just an approximate number.
And this is going to range because everybody knows
that's in the military when you retire.
Like it's going to be based on the average three.
So it depends on what your pay grade was during
if you pinned on early, if you pinned on late,
if you max the scale out.
So I just picked approximately $5500 a month
for an O5 retirement.
It's not perfect.
But that would make my retirement
if that were the exact number $66,000 a year.
If I elected the full 100% Survivor Benefit Plan,
I'm going to pay 6.5% a month on that,
which comes out to 357 and 50 cents per month,
which is what's that, $4,290 a year I'd be paying.
And if I have to pay that for 30 years,
the total cost is 128,700.
All right, so the benefit upon my death,
or if I die before my wife,
she's going to receive 55% of this $5500 a month.
So she's going to then receive $3,000 per month,
which comes out to $36,000 per year.
All right, so we're going to use those numbers
throughout this entire talk.
So, and let me just make one clarification here,
just because the number happens to be the same,
that 5500, in the example we gave of,
the first example was this general,
or whoever has a huge pension,
making, they're making $10,000,
and we said that 55% of that is what would go to the spouse.
That number was $5500 once that pensionee dies.
It happens to be in this case that the number
we're using for Brian's initial starting point
is also 5500.
I just want to remove any confusion,
because if you hear the number 55 in that first example,
that is what the spouse gets after the 10,000 pensioner dies.
In this case, scratch that,
we're scrubbing that.
55% is our starting number that Brian's getting
as the retiree here,
and the reduced number of 55% is based off
of the starting point of 55,
and that is the 3,000 a month that Brian's highlighting here,
just to remove any confusion
since those numbers happen to be the same.
Yeah, yeah, good call.
And that was pure coincidence.
It's funny how that worked out.
Yeah, but on the face of that,
on the surface, it seems somewhat reasonable.
She gets a guaranteed government income,
and what's not to like about that, right?
So I'm guaranteeing some income for her for the rest of her life,
but there's some problems.
What do you see considering that was $128,000 and $728,700 paid,
if I live the entire 30 years and continue to pay into that?
Any problems you see with that, right?
Like the downsides?
Yeah, there's obviously a break even point.
If you live, like the longer you live,
and the more you pay into this,
without any kind of continued benefit for her,
obviously this becomes, at a certain point,
becomes a sunk cost.
You could outlive that entirely,
and now you've just paid that amount of money.
So there is the extreme,
I mean, that's the problem is the quote,
worst case scenario here, financially speaking,
is that you live a long life, right?
Yeah, we go to the best.
And there are 90s.
Yeah.
Right, that's the best case scenario.
We want you guys to both live that long,
and so the best case scenario is that you spend $128,000,
and this becomes a sunk cost,
that gets you no benefit for your wife once you pass,
once you live past 70.
So there is, there is that initial bad scenario
where you don't die,
and even right there, the misaligned incentives here,
it's like, you know, if this is worth it,
you need to die early,
at a certain point where those,
like obviously, you know,
it's kind of like your insurance.
You know, you make your first premium payment,
and you die the next day.
Well, from a numerical rate of return,
the best case scenario is that you die the day
after you pay your first premium,
because that is the largest return on what you put in.
Same thing here,
you make this first payment of a couple hundred bucks,
and then you die the next day,
well, that's the best financial outcome,
as far as your wife is concerned,
in a vacuum of her specific situation.
Obviously, we don't want that there.
We don't want that to be the case.
We want this to be a sunk cost,
just like a term policy.
Nobody wants to claim on their term policy,
because that means you died earlier,
you want to outlive it.
But again, we're talking about insurance
and protecting against a risk here.
Yeah, and so I'd say like,
in comparison to whole life insurance,
you know, just like terms,
since you brought that up,
we're just paying,
we're renting this annuity,
if you'll think of it that way.
So compared to whole life insurance,
there's no cash value built up.
So I'm paying that from 42 to 52 to 62,
I have a need for finance in my life,
but I'm getting nothing out of that.
So right off the bat,
when I look at whole life insurance,
I'm building cash value.
Now, to have whole life insurance
is going to work for this.
It's much higher premium than the cost
of the survivor benefit plan.
And that's a factor in this decision matrix,
because as well,
but every dollar we pay into this,
it goes into a government system,
and it disappears.
And you know how we both feel about that.
We can't bar about it.
We can't access it.
We can't ever get it back.
Pure insurance.
So there's no asset value here.
The conversation to me sounds kind of like
when we talk about waiver of premium rider,
that might be a little bit more analogous,
where we say, hey,
a couple hundred bucks a year,
if you get disabled and can't earn income,
the company pays your premium,
we're talking about pure insurance.
And so when we're looking at the other elements
of our policy structure,
and for those IBC clients, this will make sense.
The base premium, you know,
generates a scaling cash value over time.
The PWA premium generates a flat,
almost one for one cash value over time,
the dividend is an exact one for one cash value over time, right?
And so each of these elements of your premium
have a benefit.
But this one, waiver of premium,
we describe as insurance on your insurance.
It doesn't provide you any,
it's a sunk cost if it's not used.
But it is there in case something that happens.
It's the same kind of discussion here.
Hopefully this becomes a sunk cost.
But if you need it,
it does provide that element of protection.
So the only question becomes,
can we match that outcome in a more efficient way?
And that's where we get into a more in-depth comparison.
Right.
The second problem I see with it
is what happens if your spouse dies first.
So we also, you know,
when you're making this decision,
you also have to consider,
is she healthy?
Does she have a whole bunch of health issues
and is unlikely to live you or he,
you know, for the woman or his diary?
But, you know,
if they die before you,
you get nothing.
The earlier they die,
the less sunk cost you had,
which is not a premium,
which is not a great outcome.
But let's say they die 30 years into you paying this.
I would have paid the entire 128,700 gone forever.
There's no refund on that.
It's just,
it's a user to lose an aspect of the survivor benefit plan.
And that's,
that's like truly a risk.
You're just paying money out.
And then she dies like,
oops.
Government got your money.
So, yeah.
So there's a big cost there.
I mean,
the,
the third cost that says,
or sorry, go ahead and read.
Oh, yeah.
Keep going, man.
Our, our third cost there is going to be opportunity costs.
And this is really where
the conversation is going to have to get like,
get down on paper
and technical looking into the week.
Because the opportunity cost of paying this,
you know,
is going to go,
we're going to say,
all right, well,
we could be paying a couple hundred bucks a month
towards survivor benefit plan for this protection.
What else could we do with that money?
But in order to do something else with that money,
we have to also
bake into it that there's going to be a cost of insurance here.
But then those costs of insurance,
that, that,
you know,
if we do it with whole life,
generates value that we can then use in leverage, for instance.
And so,
it's not as simple as,
you know,
you know,
the knee jerk conversation,
like you talk to,
you talk to your,
your,
your Dave Ramsey's,
like that,
that kind of mentality
and that,
the type of financial strategy we always hammer,
the knee jerk reaction is going to be,
oh, don't do that.
Put,
put those $300 into an index fund or a mutual fund
at 12%,
and you'll weigh out perform any benefit
you're going to get from,
you know,
from her out living you
and then getting this 50,
this $3,000 a month,
or whatever that 55% number is,
that she would get
continuing on after you die.
And it's always going to come down to,
well, what if you just invested this money instead
in the money,
in mutual funds?
Well,
that's not the kind of conversation
that you should be having.
Like,
if that's the level of analysis
you're doing,
and should I be
in putting money
into the fiber benefit plan or not,
that's not the right answer.
Because you need to compensate for an apples to apples,
you need to have a protection element
that you're replacing the protection
that you're losing here.
And so,
that's where the life insurance death benefit comes in.
And so,
can we,
adequately replace the protection,
while providing some value,
and then from there,
can we leverage that?
So, the opportunity cost is going to be the most detailed
and the most specific to your situation here.
But that's another major consideration here
and potential flaw of,
of what that money could have done,
had it been able to provide both protection
and generate returns.
And so, again,
that's like,
that is the bread and butter
of the conversation
that we would have
with an individual
making this analysis.
Yeah, and,
and beyond what you said,
you know, part of that analysis,
when you're choosing whether to do this or not,
is what kind of assets do you have?
If you,
if you're somebody that has,
like, let's say you,
you're, you're doing the option trading,
like we do,
and you've built a multi-seven figure portfolio
that changes the metric
on whether you want to dump a couple hundred dollars
into this,
maybe benefit.
You know, so,
everything,
we have to look at the entire picture
before you just say,
yes to this or no to this.
There's,
there's a lot of variables
that need to come into it.
But I think something that's near and dear to our hearts
as fathers
and people that are thinking generationally
is the fact that this benefit dies with your spouse.
Now,
they're,
we're not talking about them on this.
There is a kids option
where up until a certain age,
if you die before,
you know,
while your kids are young,
they can receive the benefit
and not your spouse until that I can't remember the age
off top of my head.
Let's,
whatever it is,
something in the early 20s
with college or not college,
that's fuzzy to me.
I didn't really study that too hard,
but that benefit exists,
but only while they're young.
The,
the 99% solution when it comes to S.B.P.
is they're trying to take care of your wife
and that's what most
service members are doing.
So when she or he dies,
it's over.
Your kids get nothing.
There's zero inheritance.
There's no generational value.
There's no asset to transfer.
For me, that's a problem.
But not everybody thinks that way.
And if you don't care about that,
you don't have kids
and that doesn't matter.
It's not a problem.
Yeah.
And I think the fourth major issue
is that you are locked into this.
So after you retire,
there's a window.
It's it's just after two years.
So from 25 to 36 months,
basically between the second and third year
that you can opt out of it.
If you miss that window
or something changes
in the decision matrix,
once you get past that three-year mark
or that two to three-year mark,
you're done.
Like you're paying it for 30 years.
There's no more options.
Now, it does stop paying
if your wife pre-deceases you.
So the payments end immediately
or, you know, that month.
But you can't change your mind
in 10 years and say,
ah, this was a bad idea.
Or I've built a real estate empire now
or I've built, you know,
a lot in the market.
And I don't really need this anymore.
Too bad.
So I don't like the fact that you're locked in.
You have something we talk about.
You're lacking control.
Yeah.
For me, that's a problem.
For me, that's a problem.
And maybe those first few years,
because when you do the analysis here,
like we said, the earlier you die,
the more value there is here.
And so those first few years,
if you have decided
and you're within that window still,
you know, it might be a decent call
because the returns in that situation,
if you were to die during those three years,
are really large, you know,
because the longer she lives at that point,
you've paid very little in cost,
but you've generated a pretty substantial
ongoing annuity plan effectively for her.
And so that could really be a time
that's the most exposed that you are in those early years.
And there's analysis there,
like family health history,
service related injuries that are service related.
Maybe you took too many poisonous jabs
and you have some kind of autoimmune disorder
and you're looking at dying young,
like you have to think about so many more variables
than check yes or no.
Right.
If you're triple boosted or whatever,
you know, probably this is not a bad play for you.
It might not be a bad play.
And I'm even saying that,
like that's going to,
we'll get to the conclusion,
but sometimes this makes sense.
So,
so let's talk about like when it actually pays off.
Remember the numbers.
I can flash that screen again here real quick.
300 and change a month.
Got you your wife about 3000 a year.
Sorry, 3000 a month.
If you died early,
that being 55% of your $5500 monthly pension.
Yeah.
So we pay $128,000 approximately.
If I live, you know,
if I live the full 30 years,
I'm going to pay about that much amount that that much.
She's going to receive this now.
There are cost of living adjustments to this,
but I don't know what those are going to be.
So we just stuck with this with no inflation.
Just,
you just have to work with that.
We can't,
we can't figure out every single metric forever.
So the, the nice thing is,
is she only has to receive that for three and a half years
for it to actually be to get all the money back that I put in.
So that's not a terrible outcome.
As long as she lives three, four years,
she's going to get every dollar put in.
If she lives 30 years,
she's going to get $1,089,000 in total benefits.
If she lives 40 years.
And that's assuming you pay,
that's assuming you live the full, like you,
if you,
earlier you die,
the sooner that break even happens for her.
Absolutely.
But two years one,
it could be a month.
If I die right away.
So yeah, that,
like you said,
in the beginning,
the closer we get to that number on the front end,
the better benefit this is.
But this is assuming I live and pay for this for 30 years.
If she were to live 40 more years,
like maybe she's a lot younger than you.
Another thing to think about.
If you've married somebody that's 15 years,
20 years younger than you,
like,
they're probably going to outlive you by a lot.
Might be worth it.
But yeah,
so she lived 40 years that ends up being like 1.45 million.
So the longer she lives,
the better that is.
And,
but again,
it assumes you die first.
And there's another assumption there.
There's another rule about this, actually.
It assumes she doesn't remarry before the age of 55.
If she,
I actually have a friend in this situation,
who is,
who is engaged to somebody,
but they're,
she's not 55 and receives this.
So the 55 year old thing,
like,
you can't remarry or this cuts off completely.
Now,
if that person divorces before their 55,
it resumes.
So really weird rules around that.
They just can't be married to another person
and receive this at the same time.
They can get married.
They can get divorced.
Pick it back up.
And if they get married at age 56,
they can continue receiving it.
Yeah.
So your friend effectively has to,
like,
can't,
can't get,
can't get remarried
if she wants this,
this,
payment to continue.
Correct.
And yeah,
and with,
with multiple young children,
like it,
it honestly probably doesn't make a lot of sense.
Yeah.
Which is a shame.
Like,
so the,
so the state the government is saying,
like,
no, you're going to remain alone.
You're going to remain a widow
if you want to receive this benefit for,
you know,
your deceased spouse.
Yeah.
Ridiculous construct there,
but that's a whole other discussion.
So there's something called DIC.
That stands for dependency
and indemnity compensation.
This is an important part
that we need to talk about
because it changed just three years ago.
That's a VA benefit.
It's approximately $600 a month.
So if,
1600,
1600,
what do I say?
1600.
Oh,
1600,
$1,600 a month.
1600 a month.
Thank you.
So that is a VA benefit.
If the VA determines
that your death is related to a service-related injury
or problem,
or you've received 100% VA compensation for 10 years,
your spouse is entitled to this $1,600 a month,
which is $19,200 a year.
Prior to January 1st, 2023,
those two things offset themselves.
So survivor benefit plan was reduced directly by that DIC
by this VA benefit.
So they could only still get the maximum survivor benefit plan.
So you paid more money into it.
They got less from that particular benefit
if they also got the DIC.
Well, as of three years ago,
which nobody talks about,
they're allowed to receive both.
So that changes a lot.
That's adding 19,200 to their annual annuity.
So now,
instead of 36,300,
what's that go up to?
55,500 I think it is?
Doing some quick mental math there?
Yeah.
So you're basically recovering essentially
in that situation,
you know, using our U as an O5,
you were getting 5,500 a month,
your wife got 3,000 after that offset.
We're not quite all the way back up to 55 with there.
We're about 45,
but we're recovering some of that,
that 45% haircut that you take.
So the family is, you know,
that is certainly a,
from a policy decision or from our perspective
as someone considering this,
this is certainly a big thing in the plus column
that you're no longer going to forfeit this right
that you might have.
And so we can debate
like a lot of the policies and stuff.
If I was a lawmaker,
I'd get rid of military pensions
and VA disability entirely.
But then as long as it exists,
I'm going to collect a VA,
you know, the VA disability I qualify for,
had I made its 20,
I would get the pension, right?
And so like,
as long as the system exists as it is,
we don't really need to do too much discussion
of the merit of these policies.
But this one,
we can categorically put into the plus column
for us trying to make a decision.
It's a totally different value proposition here.
I mean, it's that,
that comes out to like on those numbers
with our example here,
the 55,
or I'm sorry,
the 3,025 a month on SPP
and then add to that the 1,600.
That's over a 50% increase in her,
what would be her monthly annuity.
So totally different.
And you really need to make a good decision there.
So you really got to, you know,
think about how you're looking at this.
And what is the likelihood
of you having that,
if you have 100%
and you know you're going to have a 100% VA disability
like lock that in,
that's probably pretty good.
If you have a high likelihood,
let's say combat veteran,
you've had major problems,
toxic exposures,
different things that you can easily say,
there's a high likelihood
I'll have a service related death.
It's definitely something to think about.
If you were a pencil pusher
who never deployed
and have no actual disabilities,
then you have a very low probability
of having your death related to your time in the service.
Like,
probably not something you should build
into the decision matrix.
All right.
Let me just ask this,
because this is,
this DIC element is new to me,
because again,
SPP fell off my radar as far as
really personally tracking it
when I no longer qualified for it.
And so,
this DIC,
so if someone's listening
in my situation,
they didn't make it to 20,
they don't have the pension.
So SPP isn't a conversation
there ever going to be having themselves,
but they do have a 100% VA disability.
And they live for 10 years
and 12 years in,
let's say,
by after collecting 12 years
of 100% VA disability,
is that,
are you saying that this,
that that person automatically
qualifies for DIC,
like their spouse
is going to get 1600 a month,
just because independent
of the SPP conversation,
they don't have a pension,
they don't have SPP,
but if they live for 10 plus years,
they're locking in
an annuity for their spouse
of $1600 a month,
just by merit of that VA claim
being 100%.
That's how,
as long as you maintain
that 100% rating
for the whole time,
the whole duration of 10 years.
Interesting.
Yeah.
So this exists separate,
but the problem was,
and there was a whole bunch
of lobbying around this
that finally,
the law has got passed
in 22,
an effective January 1st,
2023,
that it used to,
like, the government was like,
oh, well,
if they're also getting this,
they're not going to get as much
of this,
and they're two separate things
because you can get one
without the other.
And, of course,
the government just screwed the pooch
on that one for a long time.
And there was, like,
a phase-in period
for a couple years.
But, yeah, now,
you can get 100%.
You can get 100% policies
in general,
but they exist.
And so, you should understand them,
and you should optimize
within them.
And on that note,
if you are a veteran
with a disability claim,
that's less than 100%,
and you haven't tried
to get it increased,
there are services
that will do that for you,
and we know people
who have used them effectively
to go from
either 0 to 100%
on their first try,
or from whatever percent
they got themselves,
to 100%.
And so this is,
this is another compelling reason,
not just for a while,
you're alive,
you're looking to this,
get yourself to 100,
because that's a great value
right there,
and those companies,
most of them,
if they don't get you
that increase,
you don't pay them.
So, reach out to us,
and we can put you in contact
with people who have done this,
or companies that do this,
to where you get a free look,
effectively,
can we get you to 100?
And you'll only pay us
if we do get you an increase.
And ideally,
you get to 100,
so you start your timer
on this 10 years
towards this DIC,
because that's a very powerful
annuity right there.
And when we think about,
for instance,
if you have 100% disability,
say two kids,
it's about $4,200 a month,
tax-free,
if you put that into a calculator,
an annuity calculator,
and said,
how long,
like,
how much would you need to put
into a single-pay annuity?
How much of a chunk of capital
would you need to turn
into a money printer
that could generate
4,200 a month of tax-free income
for life at your current age?
You'd probably need about
$2.5 million,
paid to an insurance company
in the form of a single-pay annuity
to generate that income for life.
And so if you have that pension,
or sorry,
if you have that,
that 100% disability,
it's as if you had
2.5 million to invest,
and you put that into a cash flow engine
that generates
spits out cash flow
for you for life,
you, that's about replaced,
that's as if you had an asset
worth $2.5 million
working for you,
printing out money, right?
That's how you think about a single-pay annuity,
is this is a printer,
this is an engine,
I've basically bought an engine
that generates cash flow.
In this case,
you have a $2.5 million
dollar Rolls-Royce engine
that's giving you
this 100% disability tax-free for life.
And so in that example,
about a third of that
is the $1,600 a month,
so you could say that
if it's 2.5 million,
then about a third of that
is how much this engine
that you're creating
for your wife is worth,
if you lived 10 years
with a VA disability of 100%.
So get that disability,
get that $2.5 million
working for you,
generating cash flow,
and then when you die,
the engine doesn't just go away
when this example
with the VA disability,
the engine just reduces
and size by about two-thirds,
but you still have an engine
generating cash flow
for your spouse.
So that's an enormous plug
for the value of doing whatever you can
to get to 100% disability.
It's funny how I used to be, like,
opposed to that
until I realized
how the VA more or less
a lot's a 100% disability
to every service member
ahead of time
and what you don't get
just goes somewhere
in the government
throughout,
and they blow it.
So I feel like,
I feel now that I've learned
that it is always better
in your hands
than the government's hands
because we know
that at $38 trillion in debt,
they will not allocate
the money well.
Yeah, they're currently
not just emerging family.
And you can actually say,
blood and treasure,
you know,
as of the last week or two,
they're just going to start
blowing blood and treasure
on another pointless war.
And so, you know,
take it out of their hands,
put it in your family's hands,
put it in your family's economy
and generate cash flow engines
for yourself.
That's what we're trying to do
overall with our financial strategy.
And if you can have
someone supplement that,
i.e. in this case,
the VA,
or the government,
via your pension,
like,
the system exists
as ridiculous as it is.
So just optimize within it.
That's a,
that's always
should be our goal.
I agree.
All right.
So let's talk like really quick,
you know,
this is an infinite banking podcast.
So we don't have to hammer
all these homes.
But let's just kind of talk
about the alternative now.
So we've given the two scenarios.
We've given straight SPP.
We've given SPP
with the DICVA benefit
survivor plan.
But we haven't talked about
a whole life yet.
So some differences.
As, as we know,
the fundamental differences
is with SPP,
like we've said it
multiple times,
you pay for 30 years,
you get no cash value,
your spouse gets money
after you died,
ends with her.
And if she dies first,
it just ends.
You lost that money.
So you have zero access
to that cash once again,
your entire life.
So Hans,
compared to whole life,
a quick bulleted overview
of the SPP
of paying money.
And of course,
I do want to caveat
before you talk about this
that in order to make
this system work,
you're going to be paying
more premium
than you would for
survivor benefit plan.
Like we're going to build
a system,
a banking system
with much higher premiums
in these examples.
So it's not an apples
to apples as far as the input
into SPP
or the input
into whole life.
But run with what's different
there.
Yeah, and it gets back
to how we frame premium
within the IBC conversation.
When I look at the premium
that I'm paying,
it's not an expense.
Like if I had
survivor benefit plan,
and I'm looking at,
here's my cash flow,
and here's an expense,
I'm purchasing something
that is an out-of-pocket expense
that generates
while I'm alive,
no income,
no value, right?
It is just paying
it's a pure cost
of insurance.
When we're talking
about a whole life policy,
structured the way
that we do,
none of those dollars
that we're paying
into our premium
are just an expense
for an if,
if, or, you know,
like a binary scenario,
like a term policy,
which is just
due, died, or in the term,
or not.
Every dollar that goes
into my whole life policy
is generating value now,
and in the future,
guaranteed.
And so I don't look
at this as an expense.
So I don't mind the fact
that I'm paying more
than I would be
to survivor benefit plan
to recreate
the same protection
because in doing so,
I'm generating value now.
And so let's say,
whatever the premium
amount is that we're talking
about here,
if 80% of it right
off the bat
is generating cash value
that I can use now,
and then I can start
leveraging that via the function,
but the mechanism
of the policy loan,
I can put that savings
to work
without depleting it
as in,
doesn't mean it's fully
accessible
because it's leveraged,
it's collateralized
via policy loan,
but it is still
growing and compounding
as if it's on touch
because it technically
is on touch.
And so we're putting
that death benefit
in place,
and effectively borrowing
from that future
death benefit
by using a policy loan.
And without going
into all the benefits
of the policy loan,
it is the most powerful
lending mechanism
we can possibly access,
and it's something
that we should understand,
and it's not as,
you know,
if you know how
to use a policy loan,
then you understand
why it's not,
it's not just that,
well, here's money
going into a policy,
and here's money
going towards SPP,
and this is our two
comparisons,
because when I think
about what I'm doing
with my cash value,
I'm generating well
over 100% return
on the interest
I'm accumulating,
and anybody who's gone
through an intro call
with me understands
that we've walked
through the policy loan,
we also have an article
on the blog walking
through the mechanics
of the policy loan,
we have several
podcast episodes on it,
but I think
if you don't understand
how to use a policy loan,
just take my word
for it now,
and we can discuss it,
graphically,
and walk through it later,
that it's not just,
it's the fact that I'm,
I'm making 100% return
on my cost of capital,
is very easily
provable,
and so if I'm,
if that's the case,
then I know that it's
beyond just getting,
you know,
instead of SPP,
I'm instead paying
towards a policy,
but then I use that policy
to then springboard
into,
whether it's
those stress options,
crypto, whatever
my investment strategy is,
I'm facilitating investment
in a manner
to grow these dollars
without depleting my principle,
because I'm borrowing
against that future
death benefit,
so I don't know how deep
you want to go
into policy loans,
but it's like,
don't, the summary for me
is don't just think
of this as,
both of these things
are sunk costs,
which sunk cost is less,
that's not accurate.
I would much rather pay
a $10,000 premium,
than, you know,
that whatever the
100 a month is,
right, the $3,600
that I'm paying
towards, you know,
survivor benefit plan,
that $3,600 is a
sunk cost,
where my $10,000 annual
premium,
structured for IBC,
zero of that is a
sunk cost, especially
once we get past
this initial
capitalization period.
Again, that might not
make sense if you've
never studied that
in IBC policy,
you never walk
through how to use it
with us,
but it's,
keep in mind that
it's not an apples
to apples comparison,
and it can't be
really,
and so we would need
a lot more analysis
to really get an apples
to apples here,
but if you have time
to build this IBC
system before you get
to the decision
of, do I sign up
for SBP or no,
you can make this
conversation a move
point.
There's no comparison.
But if you're at that
conversation,
which is where we're
starting right now,
this 42-year-old
who has to make this
decision now,
well then we really need
to get some,
some momentum going
with this policy,
and so that's a little
bit of a harder decision
to have to get a lot
more granular.
If you're younger,
if you're still in the
military for 10 years in,
you've got time to
retirement,
you can generate something
now and schedule
with us
without having a
conversation.
You will blow the
SBP out of the water
guaranteed.
Well, you just need
to understand how that
works.
You will.
So I'm going to share my
screen here again now
for compliance purposes.
I can,
I didn't want to share
the actual illustration,
so I transcribed
everything,
but we got all the
important numbers
here.
So what I said is I
took that 42-year-old
O5, assuming he's going
to remain in the
workforce,
he or she is going
to remain in the
workforce,
and can easily afford
this with their pension
plus their new
salary,
their new income,
their new business,
whatever they're doing.
So they're paying a
$20,000 annual premium.
I only broke this
down on one.
Assume for the next
couple of examples,
it's something similar.
So this is a base premium
of $4,186.
I put the waiver premium
on here,
which Hans mentioned
earlier,
it's a little bit of a
sunk cost
that provides a
phenomenal benefit
that we think is well
worth it,
but that's
$351 a year
combined for the whole
life in the term.
There's a 30-year term
premium on this,
and that actually
takes into age 72,
which is important
because the longer
that term lasts,
the more expensive it is,
and in this case,
it was still only $340
a year.
So really inexpensive.
I think it was like
$100,000 or something.
It's not it.
I didn't need a big term
for this.
And then the PUA,
the portion of the PUA
is $15,122 right here.
So this person would have
actually been capable of
paying another $2,000
if they wanted to,
if they had the
cash flow to do it,
and that would generate
even better cash volume,
better death benefit.
So if we look at this,
here's some random breakdowns
I put.
And the reason I stopped
at $35, as I said,
the average life span
in America for a male
is $76.5.
So I'm killing this
officer at $77,
and saying that's what
they could deliver.
Interestingly enough,
the 30-year mark
is also marked here.
So this is the point
at which they would
stop paying survivor
benefit plan.
So if they lived
to $72,30
into the policy,
those payments
to survivor benefit plan
would stop.
They would have paid
the total $128,700.
All right.
So let's now,
let's look at this.
Like Hans was saying,
you have access
to this,
this column, I should say,
the entire time,
for all the things you do,
whether that's investments,
whether that's purchases,
your daughter's wedding,
college,
buying a home,
whatever you spend money
on that you finance now,
you can access this
through the policy-loan provision.
So this isn't locked away
from you your entire life.
And these numbers,
as you can see,
climb substantially
by paying that premium.
So at 30,
you at that point in your life
have access to $1.2 million
in cash value.
And if you would die right then,
you're delivering a $1.75 million
benefit.
Pretty substantial.
Now,
if you died here,
your wife was better
with the survivor benefit plan.
Fact, period.
She would have received
more net income
through her life
if she lives a long time.
Again, all those things come in.
So this is a,
it's a time game here.
And you really need to think
about all those things.
But let's just look at the,
the next example real quick,
to show what Hans was just saying,
start young,
I took a 10-year officer,
you know, assuming they started
at age 22,
they're halfway through their career,
they know they're going to commit,
and they're,
they're going to have to make
this decision on the survivor benefit plan
in 10, 12, 13 years,
whenever they retire.
So I lowered the premium a little bit,
just by 2000.
And this would,
this is a substantial premium
for somebody at 32
based on their rank
and based on their income.
So it can be done.
I know it can be done
because we've done it.
But taking $18,000 a year.
So look at their cash show.
You know,
look at those same things.
Now remember,
this person will be 40.
They would have paid 40 years
into this.
So at that mark,
they have 1.9 million.
And the death point,
age 77,
they have 2.4 million in cash value
compared to the officer
who started at retirement,
42,
they have an additional,
what about $800,000 in cash value.
Just by starting 10 years sooner.
And if they both died at age 77,
they're going to deliver
an additional million dollars
to their family.
That's he here.
This is super important
because with a survivor benefit plan alone,
it ends with your spouse.
And I'm constantly thinking about,
how can I make my family stronger?
How can I,
how can I make sure that my grandkids
are starting off
on a financial,
financial solid ground?
Anything to add in those two owns?
No, it's just,
what,
what,
I like to think through this conversation
when I'm talking about insurance.
Not, not the SPP,
but just in general.
I think,
if you think of yourself
as your self and your family,
then every dollar that you put
into your IBC policy
is going to multiply
many times over
to your family one day guaranteed.
It's the only,
the early few years of this,
where SPP
might be more optimal.
That, that period of time
is if you're comparing to your policy,
those dollars,
that's assuming that you died
in those early years.
And so,
you might have been,
you might have been better off
for a year or two.
It's hard to imagine
that after a few years,
there's a scenario
where SPP was the better call.
If you live beyond, say,
three years,
and we're not going to run
every single scenario.
But really,
the SPP has value
in those first couple of years
when the IBC policy
is really getting off the ground.
But again,
if you died during those three years,
it multiplies
itself many times over
into a death benefit,
which, again,
like we could,
we could just kind of
dive down the,
the technicality
rabbit holes
of comparison here,
forever.
If you're,
if you're in that three-year window,
where you,
you opted into it,
but you saw the time to get out,
you probably could have covered
the most risky years
that you had,
where the SPP really shines.
But the,
the time to build this out,
again, like,
for this 32-year-old,
it's,
it's incomparable
what you can do with this,
and,
you don't even really
have a decision to make,
at that point.
It's really only
if you're coming up
on retirement
and having to make this,
that,
that's even in the cards.
And I think one of the keys here,
just to reiterate,
what Hans always
already talked on,
is the cash value.
As opposed to anything else,
you have access
to this money.
You know,
these are,
these are cumulative amounts.
So,
at 20 years,
you have access
to 552,000.
So,
right,
maybe you want to move,
maybe you want to buy a lake house.
Whatever you need access
to money for,
you have it via that policy-loan provision.
So, you've built a real asset over time,
and that cannot be ignored
when you're thinking about,
you can't think of this in a vacuum
and to think about all
the benefits of this asset,
compared to,
just paying the SBP premium.
Or maybe you do both,
which we'll look at here.
So,
to draw the full comparisons.
And, again,
we can't look at every single possibility.
So, I'm just going to say you died at 72.
Right?
Excuse me,
at the exact same point,
when you stopped,
when you stopped paying
the premiums for a survivor benefit plan.
I made your wife a little bit younger,
so she could collect this for a good period of time.
So, she's 65 when you died at 72.
And she lives at be 90.
So, if you just did the survivor benefit plan,
and you don't have this DIC,
this VA benefit,
you don't have the 100% benefit
or you don't have a service-related death.
She's going to get $36,300 per year.
There's no Cola adjustments here,
just keeping the numbers basic.
So, you've paid $128,700.
She, in those 30 years,
is going to receive $907,500.
This is a key here.
I did the mod of order,
but there's no inheritance effect.
That matters a lot to me.
The net total to your family,
to her,
and if they're still young kids,
or just to her,
is $778,000.
So, if you have that benefit,
if you have the VA benefit,
and she's going to receive $50,000,
$55,500,
you've paid the same amount.
This is what she received in 30 years.
Pretty good.
So, she nets $1,259,000 rounded.
And finally, for that,
if you started the whole life policy,
and I only showed the one,
the 42-year-old,
he would have paid $597,543.
This is if he elected not to do these as well.
He said,
I'm only doing whole life,
and I'm not doing any survivor benefit plan.
So, his family would receive $1.75 million upon his death.
For a net total benefit to the family,
it's subtracting the premiums paid,
even though we do understand
that those premiums have been available to you the whole time,
they've never left your life,
but the net benefit,
assuming there's no policy loans,
and she gets the entire death benefit,
is $1.152 million.
So, you can see that it's not in a vacuum,
because in this exact case,
if everything worked out perfect,
your family is going to receive more money.
Your wife is going to receive more money doing this.
Yeah.
And so, yeah,
and you probably thought that I was just going to say,
a whole life wins.
Of course,
if your wife lives,
if your wife lives,
doesn't live much longer,
she's going to leave whatever's left of this behind,
which I think is a huge perk,
which to me,
because this difference isn't enough,
this $100,000,
to me, the legacy matters more.
So, that's where,
in my personal situation, it matters.
That is isolating it,
as if the only thing you're doing with this policy
is just letting it grow.
When I walk through what I'm doing with my policy,
I show on the line for line on the illustration.
In year one,
I invested in that rental,
the real estate syndicate,
and year two,
I got my first rental property,
and year three,
I got parental properties two and three,
and in year four,
I invested in most of those options.
So, I have five sources of income generated
from that column that we saw there,
and the income generated
from those policy loans
is more than double
what the interest those loans are accumulating.
And so, that's about,
on every dollar that I'm paying an interest
to the company in order to use those dollars,
I'm generating more than a dollar of net profits,
or I'm making at least two,
from these investment returns.
While also, you know,
the tax,
the rental properties are great for taxes.
You know,
so I'm getting,
I'm getting a lot more outside of this.
And so,
to me, if you're doing anything at all,
even if you probably,
even if you just take a policy loan to,
you know, invest in a very basic simple,
you know, index fund or something,
you're going to blow out
that option there
where, in a vacuum,
if you did nothing,
the survivor benefit plan would have been better
if everything worked out.
But again,
the good thing is,
when we're talking about the,
when we're talking about the,
the whole life,
we're removing all of the ifs.
We're not saying,
if you live this long,
like all of these,
all of these considerations,
the ifs are removed.
When we're talking about,
if we pick the perfect optimal plan for SPP,
there is a way that it is optimal.
If this,
if this,
if this,
if this,
we have to make a lot of assumptions
to get to that optimal point
where it can outshine
or it can do better than
just a whole life policy
with nothing being done
as far as leveraging the cash value.
So there is a,
there is a,
like a narrow path,
a flow chart
where you can get to a better outcome
with SPP,
you die early,
or if,
if, if, if,
if, and you live a long time,
all of these ifs
and your wife lives much longer,
then there is a scenario
where it could also outperform.
But philosophically,
we don't like the ifs.
We, we do,
we are such big fans
of the product
and the asset that we use
because we don't want ifs
in our financial strategy.
And when we're talking about SPP,
we're inherently talking about the protection,
we're talking about continuing income
beyond our life,
which is exactly the conversation we have
and we have the,
the whole life,
the human life value discussion.
What are you worth?
And how do we ensure that,
if you don't wake up tomorrow,
your income continues
and your family gets the benefit
of what you would have earned
had you been here to earn it.
So there's a lot of overlapping conversations
when we're having an SPP conversation,
it resonates.
It sounds a lot like
the conversations we have.
It's just,
there's so many more ifs
that it's,
it's kind of like,
it's overwhelming to,
to really try to do
an Apple Stapples comparison
because you have to make
so many assumptions
to make the SPP work.
And again,
if we knew you were going to die
in two years,
SPP is good.
And also, you know what?
If we knew you were going
to do a good die in two years,
we wouldn't put you
in a holiday policy.
We would get you term, right?
Because if we knew,
if we,
if the,
these risks that we're ensuring
against had some certainty to them,
you would be better served
by paying the lowest premium possible
because that is how we're going to maximize.
So like, yeah,
like if we had perfect information,
term would be better than whole life
for people that we know
are going to die during the term.
And so we don't deal
with all these ifs
and we don't,
because we don't have perfect information,
we have to optimize
within the information we have.
And we think we can do that
for most people.
It would make a lot more sense
to do the whole life,
particularly the younger you are.
Even if you have two,
three years to get a jump on this,
if you're at 17 years
and you have two,
three years to retirement,
you can get a jump on the whole life
and make it to where the discussion doesn't even matter.
It's just
if you're starting now
where you really
might have a harder decision to make.
Yeah.
And so,
so just to like look
at the absolute
nightmare scenario possibility
of this,
is that you live a full third,
you live the full 30 years,
you pay the $428,000
and premium for SPP,
your wife dies before you,
you got nothing.
You don't get a refund on that,
you're just out.
However,
as opposed to if you just did whole life,
if you live and pay those premiums
for 300 or 30 years,
you've probably paid,
I don't know what it comes out to,
$500 some thousand dollars
in total premiums,
your wife dies,
you still have the asset,
you still have the cash,
you still have the death benefit,
you still have your retirement.
Yeah.
So, all you're going to do
is change the benefit series
if you have children
or to whomever you want to change it to.
So the asset lives on,
the asset still benefits you
and it gets to pay out.
So that's like the absolute worst case scenario,
where SPP wins
is if you die,
let's say in those first couple years,
and you just haven't built it out,
and you're only doing one or the other,
you're going to pay a lot more premiums,
they're going to get a lot less in death benefit,
and that is also drawing the assumption
that your spouse lives
a really long time after you died young.
And if she continues to live a long time,
she's going to win with the SPP,
especially if you have the VAB
benefit on top of it.
But I still think that the hybrid approach matters.
And you know, when I'm thinking about my family,
me personally, I have a few million dollars
already in whole life insurance
and a lot more term that's going to get converted.
So I know that there's going to be multi-multi-multi-millions
in whole life
because I started this in my 30s
long before my career was coming to a close.
But you know what?
I still might choose
or low percentage.
I still might do like 25%.
That's what people don't realize is you don't have to do
the maximum SPP.
I still might even add into that.
In case I have, you know,
I might get some kind of service-related
VA benefit.
I don't know that.
But under that probability,
why not for a short amount,
due to 25%,
and it'll only cost me 100 some dollars a month?
It might be worth it.
And that's a matter of fact,
I might just do that just to have her give her
a guaranteed annuity as well.
Yeah.
So I might take the hybrid approach.
I haven't totally decided yet.
I have plenty of whole life that it doesn't matter.
But helps her continue with her premiums,
which she won't have a problem with.
Depends if it depends if my wife learns to trade
because I will push that.
And I'll me it's even in a letter.
Like learn to do this.
So I think that that might be my compromise.
Is do like 25% as a hedge.
Even though I have enough death benefit.
But the problem is,
if my term isn't all converted,
I have plenty of terms.
So I'm actually,
because income has gone up.
I'm not at human life value anymore.
We always talk about that.
But that's a constantly changing number.
So I no longer have enough insurance for human life value.
I need to add some.
So when I think of that,
she's still short of what my human life value was.
Another decision.
Like can she continue to lifestyle?
Can my kids continue to lifestyle without me here?
They can do pretty well because I'm not a consumer anymore.
So I probably don't need 100% human life value
for their lives to say the same.
But adding in a little annuity might not hurt.
Little guaranteed income.
I don't know.
Yeah.
For nobody,
it's not completely clear cut.
And it's pretty cheap annuity insurance.
For her to get, you know, 1,200 bucks a month.
Yeah.
There's so much.
Again, like I guess the summary of this.
A little frustrating,
but the summary is it depends.
But really, it only really depends if you're very close to that point.
You know, again,
the main highlight,
if you are a young officer,
if you are someone who has.
Has a few years to get a head start on this.
You can put yourself in a situation where you don't really need to think about this.
This is, this becomes like you said,
maybe I'll throw a quarter, you know, a quarter of it towards this,
just as a nice little annuity.
But, you know, it's not like we're not making this tough decision here of, you know,
how do I ensure all of these what ifs?
Like you can really get a jump on this once you understand how to structure a policy
and get to the point where you're, you don't,
this, this is not something that's even on your radar.
And that's a good point to be at.
Like having to make this decision,
I'd rather not have to make this decision
because I've already got this optimized.
And so again, it always depends.
I think it, the answer is it depends.
But I think if I were to like give you check boxes,
what I might say is like,
you know, you have a high probability of getting that VA benefit.
And you don't have a lot of cash flow.
You have no whole life right now.
Probably take it.
Because if you have that service-related injury
and you're, you're more likely to die young looking at that,
I would say probably take it.
If you have, you know, 10 years of retirement
and what I might end up actually doing is just rejecting it all
because I have plenty of whole life.
I'd start the whole life and not even worry about it
because you'll see that in 10 years you'll be like,
I'm not even concerned.
I'd probably elect for whole life instead of survivor benefit plan.
If you also have the DIC coverage,
you might elect to take a little portion of it.
I don't know.
And for most people like if you're inside that five-year mark,
maybe do a hybrid approach like I'm talking about,
you can probably afford both.
And I guess the fourth metric there that I didn't think about is
if you have absolutely terrible cash flow habits
and you simply can't afford whole life insurance
because you spend every dollar you make
and Parkinson's law rules your life,
take the coverage.
Because if you can't afford it, you can't afford it.
Don't leave your spouse high and dry.
I'd rather you leave her something than nothing.
And if it's forced out of your paycheck
and you can't do anything about it,
you're at least benefiting them in some way.
So if you're terrible at your cash,
100% takes a survivor benefit plan.
If you need Dave Ramsey's financial advice,
you probably should stick with the VGLI and SPP.
Really not optimizing there,
but if that's you,
know your strengths, know where your weaknesses are,
and be realistic with where your financial IQ is.
And if you need Dave Ramsey,
then you probably need SPP.
You need that forced that forced habit
to ensure that that protection's there
because if you would just spend that money otherwise,
then when the worst happens,
and we all live until we don't,
we don't know when that day's coming.
And so if you need to be the same way that
if you need that money taken out of your paycheck
before you even see it and put towards retirement,
just in a long-term qualified plan,
that's better for you if you would spend that money
and get nothing out of it besides short-term spending pleasure.
So know yourself,
but if you want to have a conversation
and talk through your specifics,
and if you want to learn more about what this other path is,
if you're military and you're not really coming up
on this decision anytime soon,
but you're, we keep talking about this other path
of how you could kind of do this hybrid approach
or optimize like,
if that's uncertain to you,
then that's something that you can schedule
and we can talk through.
So you actually understand when I was talking about policy loans,
leveraging all this,
you know, how to use this,
keep the principle in place.
If that doesn't really resonate with you yet,
then we can have a conversation
and see what we can set up now
so that we can preclude this from being a conversation
you really need to worry about in the future.
Yeah.
So I hope the point is that it's just not the black and white decision.
I hope what you've taken from this is it's not the black and white decision
that they're going to give you when you go to retire
of do you want full SBP or none?
That's pretty much the check box you get.
There are so many different factors here.
It depends on your age,
your probability to get that DIC compensation.
It depends on your family situation,
your values, your goals going forward.
There are so many different variables here
that it's not a straight-up decision,
spend some time thinking about it,
call us and talk through it.
I'm just about through like a 50 page or so white paper
that I've been putting together.
It's not quite done.
Hopefully by the time this comes out,
I'll have it finished and it will be linked in the show notes.
If you want to grab that and kind of read through,
it'll have a lot more examples than we were able to talk through in one hour.
It'll have a lot more information about the different aspects of SBP,
so it'll be pretty detailed.
But yeah, whatever you do,
whether you choose it,
you choose just whole life or you choose a hybrid approach,
just make sure you're making an informed decision.
And I think that's where many people fail right now.
Yep.
All right, well, that's good.
It's good, hopefully, when those are listeners,
get something out of that.
Cool.
All right, brother.
All right.
Cheers.
Talk to you all next week.
Cheers, man.
Talk to you soon.
Thanks for listening to Remnant Finance.
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Remember, true financial freedom comes
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Until next time,
this is Brian and Hans signing off.
Remnant Finance - Infinite Banking (IBC) and Capital Control
