If you want to protect yourself and your family financially, then understanding insurance policies is a great way to start. Knowing and understanding your insurance policy will give you the know-how to leverage it effectively. In this episode, Vera McCoy, Esq. sits down for an interview with Steven LaBroi, Chief Strategist of The LaBroi Insurance Group, LLC. Steven discusses insurance, its historic roots, different products, and how to leverage these effectively. A great episode to listen to if you are looking into learning more about your insurance policy.
Listen to the podcast here:
Understanding Risk Management And Insurance Policies With Steven LaBroi
My guest is Mr. Steven LaBroi. He is an expert on insurance. He has various programs and policies that he can offer. I’d like to have him on the show because as you’re emerging from bankruptcy, there are some things that you need to know in order to fortify yourself financially. Certainly, life insurance is some of the other policies and products that Mr. LaBroi offers and he can speak to that. He’s going to give you a little bit of his background and then we’ll jump right into the topic that he’ll be discussing with us. Thank you for being on my show, Mr. LaBroi. Give me and my audience some ideas of your background.
Thank you and I appreciate you having this platform. It’s very important that we have financial resources as well as information and education in all situations. We have a lifetime of needing access to capital or having cashflow or having needs to manage our finances. Situations do arise. I am a nationwide strategist in the insurance realm and I’ll speak to that a little bit more as we get into the conversation. Our goal as a company is to help unearth the mystery of insurance and its complexity. The specificity of life insurance and its option nature versus the mandatory nature of other insurance types of policies that people own. The history and the longevity of these companies and why they have been in business so long and how they help people close the wealth gap. We get into a full array of money management, strategies and how to insert what we call contracts into our finances.
Give us a little bit of your background. When and where did you start? How did you get started in that?
I have a Finance degree from Morehouse College, which goes back many years. I’ve always managed my own money, been in sales for many years in marketing mostly in young startup companies. You have to be very prudent on how you operate as well as manage money. I’ve owned my own businesses for the last couple of years, franchises as well as startup companies from the ground up. All of which created an environment where I have to manage my own money. As a result of all of these experiences and exposure to various industries, I decided to go into finance because I realized that a lot of people don’t look at their books and money the same. We have a proclivity of looking at this from a very generic and common sensical type of way of paying attention to money. There are many different ways to handle this. My background has been financing all the time but mostly business.
That’s good because the show looks to the audience that are entrepreneurs, not just people who file bankruptcy but entrepreneurship in general. Having that background is great to know. You can certainly offer a perspective on this whole topic that many other people don’t have. Having your various businesses, what things did you learn in terms of financial literacy?A lot of us only see our tax people once a year, but we operate all year in an effort to sustain and make money. Click To Tweet
With business, what I learned and it’s transferable to individuals is tracking money. There’s a reason why businesses have bookkeepers and accountants which is an intricate part. Probably one of the most important parts of owning a business is because they give you a footprint as to where your business is. You can forecast where your business is going. You can see where your business has been. Put that in this context of an individual, it’s the same thing. We just don’t call it accounting or bookkeeping. A lot of us only see our tax people once a year but we operate all year in an effort to sustain and make money. When we see this person, the bookkeeper or what have you, we hope that things turn outright.
Why aren’t we getting proactive like businesses? When I came to that conclusion, I realized that if I ran my personal life like I was opted to run my business with the liabilities and risk management in business. My personal life would probably be ten times better financially than a lot of times it could be with us being half hazard and in a guest mode for our personal finances. Being compelled to be more consumer than we would be being a producer or a business person in our personal life.
One of the things that you would offer people is to structure their personal finances like a business. You want to be profitable at the end of each year when you do your personal finances.
That’s correct. I wrote a book called Build Your Human Equity Line of Credit. One of my coined phrases is, “To become positively selfish.” The word selfish in general terms gives us a negative connotation about most people most times. If you become positively selfish regarding your finances and regarding you, you will start to understand how to take the leverage back from financial institutions, banks, funding companies, from outside the entities that are all trying to get at your finances. Even people tell me they procrastinate when it comes to saving money from different services that are being provided by them like cable companies and cell phone companies. People don’t take advantage of a lot of times that you can create savings by taking advantage of their programs. That $100, $200, $300 or what have you can go back into your portfolio as a positive financial benefit and help you build your personal portfolio so that you can control your destiny.
How do we work with a company that is nationwide or someone like you who’s an insurance agent to not just have insurance but also be proactive and develop a game plan to secure our financial stability and financial future?
I’ll say it to you like this. I often get into a little historical background on insurance itself so that people understand a perspective. Insurance as an industry has the largest amount of agents in the world out of any industry ever because you can be eighteen years old and get an insurance license. I say that to understand differentiation. Differentiation means that every agent comes from a different perspective, comes from a different intention, has possibly different products, creates different outcomes for their client. Some are maybe even more selfish in nature in terms of running their business to make money versus helping the client benefit going down the line. A lot of times it can be buyer beware how you build, sign and engage these contracts which are called policies.
If you can find an agent who is contracted to teach you, help educate you, help bring you up to speed as to how these systems can work for you, which then can create a benefit when it comes to your money management. When it comes to signing these what I call long-term contracts. As we look at life insurance as a long-term vehicle, a lot of us look at it with the benefit being to another generation which that’s not always the case. In essence, you can find an agent who will help open your eyes as to how to create a benefit for you and your family. Most times, those types of agents, as they educate you, help you find better and bigger outcomes. That agent still gets their benefit or their commissions from it. It’s a win-win versus you having no knowledge. You being sold or transferred some kind of a contract or policy that you have little to any understanding of. The agent then walks away and you walk away not understanding what benefit or if any that you might have.
The industry is huge. It’s up to you as a client to dig in. We have the internet which gives you another layer of education or information to help you understand that these wealth-building tools can be in your benefit. I’m trying to build a bridge to people to help them look if these industries have been around for more than 200 years and other cultures or other people have benefited from them tremendously over the generations. I need to dig a little deeper to understand why and how. I need to find an agent who is malleable and helps clients get that education. That’s what the LaBroi Insurance Group is all about. We try to make sure that we share in the understanding of this because you will own it for more than 30, 40, 50 years. Longer than a mortgage. Longer than most contracts that you ever sign. You will own a life insurance policy. You can’t go back and reassign it or repurpose it if you don’t know what you have. That’s opposition.
One of the objectives of your company in the US as an agent is to not only sell a policy but also get your clients to understand how this can be a vehicle to build wealth. Walk us through that because so many times people buy an insurance policy. They don’t know what it says. Their primary objective especially when it comes to life insurance is like, “Here’s $20,000 or $25,000. This is what my family will bury me with.” How can you use that vehicle to build wealth? Explain.
They can come from different perspectives but I’m going to start with a base. An insurance policy is a contract. Let’s just take the word policy off the table. How you design and ask for benefits in that contract is what your outcome will be. Those contracts can be varied. Insurance companies in their nature, by their nature, are just managing risk of life. They manage the risk of your life expectancy. They don’t know when you leave this earth but they have averages. If you are able to negotiate with the insurance company on behalf of your education and understanding that this policy in and of itself will give me and my family access to additional capital. Access to a large amount of death benefit. Access to a leverageable contract that creates net worth.Insurance companies, by their nature, are just managing the risk of your life expectancy. Click To Tweet
Let’s break that back into understanding that life insurance itself is one of the entities that the life insurance industry has, that has a tax code attached. That tax code was developed in 1912 and still exists. The tax code is 7702. It was in the first section of the tax code IRS book when it was developed in 1910. When you think about it, the parameters of this were developed before African Americans had the opportunity to even partake. They partook as collateral being insured. Fast forward to 2021, the opportunity for you to ensure and manage risk through these contracts create a position that is leverageable by the courts. It’s not risk or taxable like other investment entities but we don’t shun other investment entities. This has its place.
If we design this policy where it grows in certain parameters, there are certain numbers of cash values, deathbed benefits, over the years that you own it you can leverage it in various ways. I teach people how to leverage it in real estate, paying off debt, making future purchases and I teach these people how to leverage it by building net worth that is financeable and collateral in times of an economy where you have an economy that is either soft. Where there is financing available for those that have leverageable collateral or even economies where the economy is tight. People who have certain types of assets to be able to lend because you have to understand banks and financial institutions, lenders make money by lending money. They have to find those that are lendable.
Those people that are solid and financed over a lifetime, these types of products can hold their position. These are contracts and contract law. As you’re aware, as the attorney is superseded or is managed in the courts, tax law is managed in the political realm. In the government, in the local, state and federal. They can change those laws on a regular basis. They can implement laws. The irony is that the tax law for life insurance has been around since 1912. Why hasn’t Congress changed it? We always say they must be taking advantage of it too.
That’s interesting because my readers, a lot of them may have been struggling with pulling themselves out of bankruptcy and moving forward. In a conversation with you, I didn’t realize that can be a problem sometimes coming out of bankruptcy. Explain that, please.
Bankruptcies will inhibit the ability to get an insurance policy. Insurance companies want to weigh your ability to sustain that contract over years. It’s a long-term contract. If you get that policy when you’re a teenager, sometimes parents buy that policy on fifteen-day-old infants. They’re looking for you to live an entire life. In fact, life expectancy has extended. Insurance policies go to age 121 years of age when not too long ago, in the past, they only went up to age 96. They also look at your financial ability to manage. As an aside they look at your ability to manage driving a car. They look at what you do. Do you fly airplanes? Are you in the military? Do you do scuba diving? They want to manage risk but one of those risks is your financial ability to manage your own personal money.
There are tons of customer companies out there that will not take that risk if you had a bankruptcy. I’ve been able to as an independent broker, as a nationwide strategist find companies that will take people out of bankruptcy. What you do is that if you have to wait as you already know, once your bankruptcy is charged up, you get a second lease on life. If you have to wait to build your insurance life, those years are lost. You’ve come to a person like me and we do some pre-underwriting and find companies at that time that are willing to take that risk. They look at the details of your bankruptcy. When was it charged off? What type of bankruptcy it was? It’s the details and they have a person in their stead that will evaluate that.
For my entrepreneur readers, how can they use an insurance policy? How can they leverage it to make or have access to capital to further their business?
If you’re an entrepreneur simply in playing, you have to have access to cashflow for your entire existence. Most of the time entrepreneurs do two things. They sink every dime that they’ve created to customer interaction back into their business. That’s a cashflow strategy. It doesn’t work too long because you can’t pay yourself. The other way is that they go and beg the financial markets to give them money at a certain interest rate.
They try to establish business credit which makes sense because that divides your personal assets and Social Security from your tax ID number. You shouldn’t do that. If you think about big business, big corporations throw off their excess money into what is called a trust department. That big business has under their umbrella. The trust department is a department that takes those overage revenues and they do investments or they put money in certain types of products, a lot of times they put them in life insurance products.
There are two types of life insurance that banks and corporations own. One is called BOLI, Bank Owned Life Insurance. It’s called COLI, Corporate Owned Life Insurance. You can look those up. We should be adopting that same strategy as entrepreneurs and small business owners. Set up policies, we take the over amount of revenue that we have in our business during the course of the year and bill cash values. Those cash values we control as cashflow. We still have the death benefits or face values in case something happened to us as a business owner in terms of a tragedy. Those cash values, we can then borrow from our policies. We can loan that money back to our business. It’s like going to borrow money from a commercial bank. You’re the bank and you’re the borrower. This time you control both entities, which means that you can decide how you want to pay yourself back from your business. Do you get a chance to do that with commercial banks?If you're an entrepreneur, simple and plain, you got to have access to cash flow for your entire existence. Click To Tweet
You surely don’t.
Once you sweat getting the loan from them. The banker comes knocking on your door because you haven’t been able to make a payment or they put some on your credit, personal credit. You had to use your personal credit this time or they put some on your Paydex score because you had to use your business credit and couldn’t pay back. Now, you’re impugned into the future financially but you get responsible in terms of building what we call a financial foundation. We teach you that you can borrow money from your policies through a promissory note. Pay your policy back with interest. Take a tax deduction on the interest payments just as you would with Bank of America. At the end of the day, we teach you application and how to sustain yourself for the long haul, how to create opportunities. A lot of our clients was able to pull money from their policies instead of getting a PPP.
These are things that my readers need to hear because most certainly a lot of entrepreneurs were cash strapped. They’re facing some financial challenges. Mr. LaBroi, I’m hoping that you will come back another time and give your information to my audience because this was certainly enlightening and I appreciate it so much. Let me give you a shameless plug. Tell people how they can get in touch with you please.
I appreciate you all the time. This is great. Find me on all the socials under @StevenLaBroi or you can find me at LaBroiInsuranceGroup.com or any other social media platforms. We’re out there teaching you can get on our schedule link to our Instagram and linktr.ee. Go to the top of our Instagram and find us. We look forward to talking to anybody who wants to learn.
I appreciate that. What was the name of your book? Give us the name of that book.
My book is called Build Your Human Equity Line of Credit. We trademarked that term through the Patent and Trademark Office. Human equity line of credit because we believe in that importance over a lifetime. If you build your human equity line of credit, you can make it in any economy. You can also find us on Amazon, Kindle and Audible or under StevenLaBroi.com where you can find the book and more information about me.
That is wonderful. Thank you so much for being on my show. I’m going to have you back again so you can give us some more information that we didn’t know.
I appreciate you. You’re doing good work.
- Mr. Steven LaBroi
- Build Your Human Equity Line of Credit
- @StevenLaBroi – Twitter
- Amazon – Build Your Human Equity Line of Credit
- Kindle – Build Your Human Equity Line of Credit
- Audible – Build Your Human Equity Line of Credit
- Instagram – Labroi Insurance Group
About Steven LaBroi
In personal finance, I believe we can set new traditions without excuses. I challenge us today to begin to unlearn, learn, and teach different ways of building wealth to our children and ourselves. This is done simply by using the global messaging tool— the Internet. There are no more excuses for information not being available. We have the information in the palm of our hands. The Bible says to seek knowledge.
Now we can teach locally to prepare ourselves and our future generations to be able to manage globally off a foundation set by us. WE ARE THE LEGACY CHANGE GENERATION, no matter what age you are now. You are a part of the legacy change generation because there is nothing that will hold you back from learning except your own personal restriction of allowing your mind to open. Information is everywhere.
It is my hope that for those that read this book that it begins to open a dialogue of conscientious thought on another way of
managing money. Peace be with you and your family while you build your financial foundation.