https://www.youtube.com/watch?v=ATfbEBmtzjE What is the perfect funding ratio between base premium and the paid up additions rider (PUAs)? You may be surprised to discover that this question comes up over and over in our one-on-one conversations with people who want to implement the Privatized Banking strategy personally. And since whole life policy design is important enough to discuss one-on-one, it’s relevant enough to dedicate some airtime to answering this question upfront, in case you may want to know the same thing. In this article, we dig into the more technical design of a whole life policy. We’ll have a candid conversation about why we design policies the way we do, specifically regarding base and PUA premium. Instead of looking at it so closely that your eyes start crossing, you’ll zoom out. Then you'll get the best big-picture and long-term perspective. If you’re in the consideration stage, this will matter a lot to you. If you’re still doing research, it will direct your attention to what to think about. You won’t have to merely trust someone else to lead you to your goal. You’ll be more in control of the process of becoming a Privatized Banking user because you’ll be empowered with understanding. Does It Work vs. How It Works You may be more of a conceptual person, like me. For instance, I want to know the car is safe, reliable, and drives well. I don’t need to know anything about what happens under the hood as long as it serves me well. Same with a computer. I don’t want to know anything about circuit boards and coding. I just need to be able to use it to write, record, store photos and videos, and use the internet. But for the more technically-minded researcher who likes to geek out on something and understand exactly how it works before moving forward (and I say that with tremendous respect, after all, I’m married to one of those humans and it’s been a tremendous strength to me), drilling down to the inner workings may be a bit more of your style. If you’re the person who wants to look under the hood and understand how everything works, this episode is for you. This is more about how whole life policy design works, rather than what it does. Policy design is like the levers on a soundboard. It’s nuanced and technical, a dance between art and science. However, whatever your style, it helps to keep the main point in focus. More than understanding the mechanics and adjustments of how it works, you should pay close attention to the resulting performance. This is like turning your attention from the controls on the soundboard to the quality of the sound produced. The outcome is what matters. Your ultimate goal is to deliver a moving and transformative ambiance and experience for the person listening to the music. However, if you don’t understand the concept, the details don’t matter. And usually, if you do understand the concept, the details don’t matter. Base Premium vs. Paid Up Additions You could think of base and paid up additions premium as the two opposite ends of a sliding scale. On one side, you could have a policy with all or mostly base premium. At the other end, you could have a policy with mostly paid up additions rider. Policies can be designed with all base and no PUA rider, and on the other end of the spectrum, they can have up to 10% base and 90% PUA. And you'll also see just about everything in between.
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