Steve Parisi

10/08/2026

I get this question from time to time:

“I’m interested in a whole life policy for cash accumulation and legacy planning. Should I start the policy before or after finalizing my trust?”

My honest answer: it depends.
In many cases, people start with a personally owned policy and create a trust later. That’s what I did. But it isn’t always the right order.

For families facing potential estate tax, many attorneys prefer having the trust in place first.

Here’s the basic issue:
- If you personally own a life insurance policy, the death benefit may be included in your taxable estate.
- Life insurance proceeds are generally income-tax-free, but that does not mean they are automatically free of estate tax. Those are two different things.

An Irrevocable Life Insurance Trust, or ILIT, is one tool attorneys use. The ILIT owns the policy outside your estate. The death benefit can then provide liquidity for estate taxes without increasing the taxable estate in the same way personally owned coverage may.

A simplified example:
- Mom and Dad own $100 million in real estate.
- Assume roughly $15 million each, or $30 million total, is exempt from estate tax.
- That leaves about $70 million potentially subject to estate tax.
- At a 40% estate tax rate, that creates a $28 million tax bill.
- If the kids inherit real estate instead of cash, raising $28 million could be difficult.

One strategy some attorneys use:
- Mom and Dad have a life insurance policy with a $28 million death benefit, often designed to grow over time.
- An ILIT owns the policy.
- When they pass, the proceeds provide cash to help pay the estate tax bill.

Another question I hear:
“Can I start a policy in my own name and transfer it to a trust later?”
Generally, yes, but there are rules. Under the IRS three-year rule, if death occurs within three years of the transfer, the death benefit may still be included in the taxable estate. Other tax implications may apply.

I’m not a tax attorney, and I don’t provide tax or legal advice. I pay attention to what experienced estate attorneys do in practice.

If you’re considering a trust, my personal opinion is that you’re usually better off involving an attorney before starting the policy. Ideally, your estate attorney, CPA, financial advisor, and insurance agent are communicating so you aren’t stuck between conflicting advice.

This is an educational overview, not legal or tax advice.
I explain this in more detail in the video below, linked in the comments.

10/07/2026

The same whole life policy can produce very different cash values, depending on how it’s designed.

Most people compare:
- Company
- Product
- Annual premium

All three matter.

But the biggest variable is often where your premium goes.
Base Premium vs. Paid-Up Additions
Base premium generally prioritizes death benefit first.
Paid-up additions, or PUAs, generally prioritize early cash value and additional death benefit.

That creates a trade-off:
More base premium:
- Typically higher initial death benefit
- Often lower early cash value
- In some designs, little or no cash value may appear in year one

More PUAs:
- Typically higher early cash value
- Additional death benefit
- Usually a different commission and expense structure than base premium

The exact numbers depend on the carrier, product, policy year, and contract. Do not assume a percentage from one illustration applies to every policy.

There are also limits:
1. Carrier limits: Each company and product restricts how much can be paid into PUAs relative to base premium.
2. IRS MEC limits: Funding above certain limits can cause the policy to become a Modified Endowment Contract. That can change the tax treatment of withdrawals and loans, including possible taxation of gains and an additional tax in some situations.

So the better question is not:
“Which whole life company is best?”

It is:
“Where is my money going, and does the design match my objective?”

Maximum death benefit requires one structure.
Maximum cash value requires another.
Same payment. Same company. Different design. Different outcome.

I break down the numbers in the video linked below. Before reviewing any illustration, look at the split between:
- Base premium
- PUAs
- Term insurance
- Cash value
- Guaranteed and non-guaranteed values
- MEC limits

Watch here: https://bit.ly/4y2mROp

This is educational content, not individualized financial, tax, or legal advice. Review any design with a properly licensed professional and the applicable carrier disclosures.

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10/06/2026

Can paying whole life insurance premiums monthly cost more than paying annually?

In many cases, yes.

Insurance companies may charge an additional fee for monthly payments. Here’s a simple example:

- Annual planned funding: $10,000
- Monthly equivalent without extra charges: about $833
- Actual monthly payment: about $870
- Additional annual cost: about $440

If the annual funding were $100,000, the potential difference could be roughly ten times larger.

There’s another important detail:

If you pay only $833 per month, you may be funding the policy below the amount shown in the illustration.

If you pay $870 per month, you may maintain the intended funding level, but you are paying more for the monthly payment schedule.

Monthly payments can still make sense when cash-flow flexibility matters. Some policies also allow you to pay the required premium annually and make additional deposits throughout the year.

However, additional deposits may have different dividend treatment depending on when they enter the policy. That can affect projected cash value.

The right answer depends on:

- The insurance company
- The policy design
- The payment schedule
- The fee structure
- Your cash flow

Do not guess. Review the actual illustration and carrier rules before changing your payment schedule.

I recorded a full video breaking down the math. I’ll put the link in the first comment.

10/05/2026

Everyone I meet with an investment background asks this question about whole life insurance:

- What’s the Internal Rate of Return on this illustration?

A great follow-up question to ask is

- Can you show me the Internal Rate of Return on an actual policy instead of an illustration?

The Dividend rate affects a policy's performance, but IRR shows you the true performance.

For example, an illustration may show a 6.60% dividend rate. That does not mean your cash value is growing at 6.60% per year.

The dividend rate is a gross rate applied after the policy’s costs. The annual yield shows the net year-to-year growth. The internal rate of return, or IRR, shows the average net growth rate over a period of time.

Here’s an example of a 10 Pay Policy we prepared for a 40-year-old male. He was funding $100,000 per year for 10 years. Here was the IRR on cash value (based on the current dividend)

- Year 1 IRR: -7.97%
- Year 10 IRR: 3.89%
- Year 15 IRR: 4.76%
- Year 20 IRR: 5.08%

A negative IRR means the policy’s cash value is less than the total premiums paid.

For example, if someone has paid $300,000 and the cash value is $298,000, you’ll see a negative IRR at that time. Once the cash value exceeds the total funding, the IRR becomes positive and generally improves over time.

The insurance company's illustration software usually provides the IRR report directly. The agent typically just needs to select the appropriate box when preparing the illustration.

Illustrations are based on assumptions, and non-guaranteed values such as dividends can change. A great question to ask is: What's the IRR at the current dividend rate, a reduced dividend rate, and the guaranteed rate before making a decision?

In the video, I walk through exactly how to find the IRR and how to interpret the numbers at years 10, 15, and 20. I’ve got it linked in the comments.

10/01/2026

Can you start a whole life insurance policy with a low payment and add more money later?

Sometimes.

It depends on the insurance company, policy design, and funding rules.

Here’s a simple example:
- Base premium: $910 per year
- Term rider: $290 per year
- Minimum required premium: $1,200 per year
- PUA rider: up to $8,800 per year
- Total potential funding: $10,000 per year

That raises an important question:
Can you pay only the $1,200 minimum and add money to the PUA rider later when cash flow allows?

With certain insurance companies, yes.

The policy may be structured so you are committed to the minimum premium, which equals about $100 per month, while retaining the option to make additional PUA payments later.

For example:
- Pay $100 per month initially
- Add $5,000 in year three
- Add $3,000 in year five
- Add $8,800 in years eight, nine, and ten

The funding schedule may not be perfectly consistent. That’s the point. Business owners and investors often have uneven cash flow.

But flexibility does not mean unlimited funding.
There are limits on how much you can put into a policy without creating a Modified Endowment Contract, or MEC. Exceeding those limits can change the tax treatment of future distributions.

Before buying, ask your agent:
1. What is the minimum required premium?
2. Can I add lump-sum PUA payments later?
3. Are catch-up payments allowed?
4. Can payments be changed without new underwriting?
5. What are the funding limits?
6. What happens if I underfund or overfund the policy?

The right policy design can create funding flexibility. But the rules need to be clear before you start.

I walk through the numbers and show how different funding schedules can affect projected cash value over time. Watch here:

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09/30/2026

Can an agent’s commission affect the cash value in your whole life policy?

Yes and no.

If two agents show you:
• The same insurance company
• The same product
• The same premium
• The same policy design

Then the projected values and compensation will generally be the same.

An agent usually cannot simply “give up commission” and create more cash value for you.

But here’s the part most people miss:
The choices made before the policy is issued can affect both your cash value and the agent’s compensation.

Those choices include:
• Company selection
• Product selection
• Policy design

For example, traditional whole life designs may allocate more premium toward the base policy. That can mean higher compensation for the agent and lower early cash value.

High-cash-value designs often use a lower base premium and direct more premium toward a Paid-Up Additions rider. Those dollars generally receive less compensation and are structured to prioritize cash accumulation.

That does not mean one design is right for everyone.
It means you should understand exactly what you are buying.

Ask these questions:
1. What is the total gross commission paid each year?
2. How much of my premium goes to base premium?
3. How much goes to Paid-Up Additions?
4. Is this product primarily designed for death benefit or cash accumulation?
5. Can I see both guaranteed and non-guaranteed values?

An illustration is not a promise of future performance. A higher projected cash value does not automatically mean the policy is right for you.

The real issue is transparency.

The same premium can produce very different outcomes depending on the company, product, and design.

I put together a short video explaining this in more detail. Watch it in the comments, and let me know what questions you have.

09/28/2026

Before you buy whole life insurance for cash value, ask these 3 questions.

Most people start with:
“How much does a $1 million policy cost?”

That can lead to a design built around the death benefit, not the amount you actually want to save.

If your goal is cash accumulation, start here:

1. Lead with your funding goal

Ask:
- “What whole life design would you recommend if I want to contribute $10,000 per year for the next 10 years?”
- “What whole life design would you recommend if I want to contribute $10,000 per year for the next 10 years?”

Now the policy is being designed around your funding capacity and objective, not an arbitrary death benefit.

2. Request a high-cash-value version

Ask the agent to show you whether the same policy can be structured with:
- A lower base premium
- Paid-up additions
- Any necessary riders or death benefit adjustments
- Funding designed to remain within applicable MEC limits

The goal is not to blindly minimize the death benefit. The goal is to understand how different designs allocate your premium between insurance costs and cash value.

3. Compare the numbers, not the sales pitch

Ask to see:
- Guaranteed cash value
- Non-guaranteed cash value
- Death benefit
- Premium schedule
- Cash value IRR at years 10, 20, and 30
- What happens if you reduce or stop funding
- Available compensation disclosures

For example, two designs using the same carrier and the same annual funding can produce very different projected cash values.
That does not mean the highest projected cash value is automatically the best policy. It means you should understand the tradeoffs before signing.

The policy should be designed around your objective, funding ability, and risk tolerance, not just the most convenient illustration.

I walk through actual illustrations and numbers in the video linked below.

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09/25/2026

Infinite Banking is not just “buy a whole life policy, borrow money, repay it, and repeat.”

That simple explanation is why many people become disappointed with their results.

Before using whole life insurance as a personal banking system, understand these three areas:

1. Company and product selection
Different insurance companies offer different:
- Loan provisions
- Dividend structures
- Paid-up additions
- Guaranteed values
- Product designs

Even within the same company, one policy may be built mainly for death benefit, while another may be better suited for accumulating cash value.

A traditional whole life policy may prioritize long-term guarantees. A 10-pay or high-cash-value design may emphasize faster accumulation, but with different guarantees and tradeoffs.
The product you choose directly affects how much usable cash value you build.

2. Policy design
The same annual payment can produce dramatically different results depending on how the policy is structured.
Your payment generally goes toward:
- Base premium: Primarily purchases life insurance and may build little cash value in the early years.
- Paid-up additions: Build cash value faster while also increasing the death benefit.

If your goal is liquidity, you need to understand exactly where each dollar is going.

The goal is not simply to “own whole life.”
The goal is to design the policy around your objectives, funding capacity, guarantees, and expected timeline.

3. Policy loans and tax rules
A policy loan is not free money.
The insurance company charges interest, and the loan can reduce available cash value and death benefit.
If the policy lapses or is surrendered with an outstanding loan, you may create a taxable event.
MEC rules matter too. If the policy becomes a Modified Endowment Contract, loans and distributions may lose favorable tax treatment and could be subject to additional taxes or penalties.

Infinite Banking can be useful, but only when the policy is properly selected, designed, funded, and monitored.
In the full video, I explain:

- Company and product selection
- Policy design
- Cash value accumulation
- Policy loans
- MEC rules
- Direct and non-direct recognition

Watch the full video here:

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