On this week’s episode of the Casandra Properties Podcast hosted by CEO James Prendamano, financial expert Sarry Ibrahim dispels myths about life insurance and explains the difference between term and whole options. This value-packed episode is one you will not want to miss. Whether you’re heavily entrenched in the real estate business or not, this episode is for everyone.
After getting his MBA from Keller Management School of Management in Chicago, Sarry Ibrahim started his career at Allstate in the auto and home insurance industry. He was so good at forming relationships with people and understanding their needs, he soon got into health insurance, working for companies like Humana, Cigna, and Medicare. One day a valued client had asked him about life insurance, of which he knew very little about. Sarry started doing a ton of research, googling and learning everything he could about it. He soon realized that life insurance was not only useful as a death benefit, but for additional savings and as a way to leverage real estate. Today he helps real estate investors, business owners, and retirees grow and protect their wealth safely and predictably with the company he founded, Financial Asset Protection, based out of Chicago. Sarry is licensed in Illinois, Iowa, Michigan, Oklahoma, Kansas, Georgia, South Carolina, Oregon, Nebraska, and Maine -- in life, health, property, and casualty insurance.
Both Sarry Ibrahim and James Prendamano are like-minded when it comes to the banks – you should never rely on the banks for financial assistance. Another core value of Sarry’s company is to own real estate. Naturally, this is an idea that James vehemently stands behind, as well. James continues to say that especially with commercial properties, industrial properties, and retail, it is growing increasingly difficult to get underwriting from the banks. When you’re a 1099 person, you must seek alternative ways of financing, such as investing in whole life insurance.
The Infinite Banking Concept
Sarry learned about the Infinite Banking Concept centered around whole-life insurance. In the real estate industry, it’s largely known as the “Bank on Yourself” concept. However, there is no difference between them. As he came to exhaustively understand these concepts, he saw an opportunity to save retirement accounts, real estate properties, and businesses from market failures and other risks. Many years ago through his brother, James Prendamano himself found the “Bank on Yourself” concept and has never looked back. Prendamano says that it stands the test of time, like in 2008 when companies like Lehman Brothers collapsed upon itself.
Term Life Insurance
Term life insurance, as Ibrahim explains, has a set time period that is usually 10, 20, or 30 years. It provides a death benefit only and has no cash value or equity in it. It is solely for protection against premature death.
Whole Life Insurance
On the other hand, whole life insurance not only provides a death benefit, it has cash value and is not defined by a set period of time. Additionally, a portion is also invested by insurance carriers and builds cash value. According to Sarry Ibrahim, that payout is approximately five times the amount of a term policy. Also attractive is the ability to borrow from yourself, up to 90% of your cash value in the whole policy. You literally have to sign a one-page document, says Ibrahim, in order to do so. “It’s not just about acquiring a nest egg; it’s about protecting it, too,” emphasizes James Prendamano.
A Great Analogy for Whole Life v. Term Life Insurance
Whole life insurance is like buying a home, and term life insurance is like renting a home. It’s as simple as that, according to Sarry Ibrahim. James Prendamano loves the analogy, of course, it’s quite easy for everyone to understand.
Life Insurance Companies based on the Infinite Banking Concept: