Sixth Key for Everlasting Wealth

by | Mar 4, 2002 | Archives

Learn the sixth key, how to stop law suits and reduce tax.

Dear International Friend,

The seven keys to “Everlasting Wealth” are more energy, better health, longer life, higher income, higher capital gains, fewer lawsuits and less tax, plus most of all, more fun. Our last two messages looked at how to increase capital gains (see and

Gaining the sixth key, less tax and law suits is becoming more difficult. There are few loopholes left and privacy is becoming harder to attain. An overseas bank account gives limited privacy, but no real tax deferrals.

An overseas business brings many tax deferrals and though not private, can lower one's profile. We cover this in our course International Business Made EZ.

Currently the best way for investors to reduce risk from law suits and defer tax is with overseas life insurance policies. This is one of the few really private yet legal approaches to holding assets that defers and eliminates tax plus avoids law suits.

Here is an article from eClub advisor Ed Jeffery that gives more detail.

“Regulations have made it harder and harder to tax loopholes. Anti terrorism regulations have all but destroyed financial privacy. There is however one excellent loophole left, overseas life insurance policies. This is one of the few ways to hold assets in a legal, very private (and law suit protected) way.

Since the early 1900's tax provisions in the major industrialized countries have given preferential tax treatment for insurance vehicles so that in times of crisis the burden of financing death and retirement do not rest solely with the government. These tax benefits are often superior to trust benefits because insurance contracts are non-reportable and tax deferred. Like a trust, one person or entity can form the vehicle, another can own it, and others can benefit from it.

Life insurance policies give you the ability to set aside assets in a private way, yet monitor and influence their growth through professional money managers who can build your assets on a tax deferred basis.

Special insurance wrapper programs allow you to take almost any asset and wrap it within an overseas insurance policy. Investments can range from simple interest bearing deposits to mutual funds, real estate and even shares in your own business!

These policies work well for asset protection and tax deferral because life insurance is not considered a financial account, whether issued in a domestic or international form. There is no discrimination made between the two types and neither produce any taxable event during the policy life if they meet the design requirements of the IRS and the SEC. If those two requirements are met, you are free to structure your assets in a non-reportable, tax-free way. In addition the policy contract removes your name from the assets and lowers your visibility. Insurance wrappers can hold IPOs, real estate and even investments not otherwise available to US citizens or residents of certain countries.

The contract makes the insurance company the investor and the owner. Yet the insurance contract guarantees that you (or your beneficiary) receive the value of the underlying investments.

What is the price? The only costs are those of your money manager (which you would have even without the insurance policy), plus minimal administrative and insurance costs that can run as low as 1% of the assets held.

Overseas insurance policies offer all the benefits most private investors look for. They lower your financial profile, you are not seen as owning the portfolio within the policy. They fulfill the functions of a trust, but are not reportable. There is no need for insurance policies to be reported on U.S. and many other tax forms. Plus in many jurisdictions the assets in a life insurance policy are exempt from settlements of any law suit. You gain all this plus the life protection benefits which can add estate tax reductions all at a low cost.”

You can get more details from eClub advisor Ed Jeffery, at his email address e-mail, Ed offers a free 42 page in depth report describing overseas insurance products and potential-planning opportunities.

Until next message, good global investing.