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F.A.Q.
Questions
Answers
How long does it take to get an Investor Shield contract in place?
Plan on 60 - 90 days
Why life insurance as a companion asset?
- Life Insurance values grow when the market goes up and are structured to avoid losses when the market goes down.
- Life Insurance has unmatched tax advantages
- Policy loans have a low fixed interest rate that allow for a lucrative arbitrage
Why bother with the head ache of startups, if you have a secure way to generate and compound 22% annual returns, why not just do that?
We can't operate without what the industry calls an "insurable interest." Investments create an insurable interest proportional to the investment. Hence, investments and life insurance are perfect companions.
How are Investor Shield distributions taxed?
Tax law is complex and constantly changing we therefore don't provide tax advice but refer you to your tax accountant. Section 101(a) of the Internal Revenue Code (IRC) reads: Life insurance proceeds paid to a beneficiary upon the death of the insured are generally excluded from gross income and, therefore, are not subject to federal income tax. Investor Shield has a sophisticated dynamic beneficiary allocation program to minimize income tax liability associated with death benefit distributions. This tax-exempt status is one of the primary advantages of life insurance, making it a valuable tool for estate planning and financial protection.
Why haven't I heard of using Life Insurance as a strategy to protect investments until now?
When Walt Disney was trying to raise money to produce movies featuring animated mice, studio executives and investors were skeptical. The only way he was able to persuade investors to join his risky venture was to offer them his whole life insurance policies as collateral. From those humble beginnings Disney has evolved into the largest media company on the planet. Investor Shield is the first company to bring technology to this basic concept and structure it with the sole purpose of eliminating investor risk.
If a company goes belly-up, can the insurance policy be attached to the bankruptcy settlement as an asset?
No. The startup companies are never identified in the Insurance contract or the settlement agreement. They are neither an owner or a beneficiary of the policy. Key men and key women from the companies will be insured by policies but ownership of the policies always belongs to either the investors or Investor Shield.
Are Investor Shield contracts subject to SEC regulation?
Section 3(a)(8) of the Securities Act of 1933 exempts life insurance that has no variable condition from being classified as a security. Investor Shield also maintains independence from company performance so it cannot be classified as a derivative of the company.
Why does Investor Shield operate on a ten year cycle with regards to investors?
Most investment funds operate on a 10 year cycle, so Investor Shield made the T.Y.D. (Tenth Year Distribution) an operational imperative. Furthermore, research indicates that approximately 70-90% of startups fail within 10 years. Here's a more detailed breakdown:
First Year: About 20% of startups fail within their first year.
Five Years: Around 50% of startups fail within the first five years.
Ten Years: By the 10-year mark, approximately 70% or more have failed.
These statistics highlight the high-risk nature of startups but also underscore the importance of proper planning, innovation, and adaptability for long-term success.
Are the key person(s) that are insured, obligated to stay with the company for a set amount of time?
Technically no, once the policy is issued, the key person(s) could leave the company. Best practices however, would include language in the escrow agreement that allows the company to use the life insurance policy as a "golden handcuff" to keep the key person(s) engaged with the company.
How are the investors protected if Investor Shield is not able to make the full T.Y.D. (Tenth Year Distribution)?
In the unlikely event that market conditions prevent Investor Shield from making the full investment plus 10% T.Y.D. , a payment agreement with the escrow agent is implemented. If Investor Shield defaults on the payment agreement, ownership of the Life Insurance contract reverts to the investors.
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