What are some ways to create cash flow outside of wall street? Comment below! Watch this for more: ruclips.net/p/PLrRnvQl4pMjjMjEBtUVEJU_cwCZKtEvE1 Let's discuss your finances or life insurance business - click on the scheduling link in the description.
I respect the opinion. I disagree that Whole Life is just straight out better than IUL. I've seen people benefitting tremendously from both. As someone who also holds securities licenses, I ABSOLUTELY AGREE that neither one is, should be sold or should be bought as an investment. Good job overall on the video.
@@LIFE180 So, just to confirm I understand.. The point to your video is that WL does NOT have SO many "admin" fee's because the risk is taken on by the carrier? Where as the IUL sends the risk to the client and makes them pay all the added admin fee's... ?
The illustrations that I’ve seen with both, especially using IUL have been designed (not by me) by using the life chassis for the living benefits. Most I’ve seen have exceeded the original illustration tabular values. These were all non-mec limited pay contracts.
I am trying desperately to understand the difference between WL & IUL and all I can find is that both sides seem to make the same argument against each other. I keep hearing the terms "properly funded" and "properly structured" by again, both sides seem to use these same terms as the "miss" on the other side. Can someone REALLY articulate the differences? I also constantly hear the pitch about the insurance company taking on the risk vs the client, and that also is extremely confusing. How so exactly?
Great question. Each one focuses on the properly funded and structured aspect because while both types of policies are vastly different, they can each be really harmful if not designed properly....which effectively means structuring it for the minimum death benefit and maximum cash value possible according to regulations. That said, I am a huge believer that while whole life insurance is an amazing asset for the right person, it is not a great investment. People who sell IUL'S sell them as investment alternatives. That's dangerous in my opinion. Watch this video on why: ruclips.net/video/c7Wjzefcvog/видео.html
@@straitjacketstudios no problem. Hopefully that gives some more understanding. If not, hit me back and we can continue the conversation. Maybe I'll make a video to specifically help you.
You can keep IUL costs low by max-funding it. It just sounds like you philosophically disagree with the idea of people using insurance as an investment vehicle, esp one that investors don't fully understand. You are advocating for its use as a savings vehicle instead. While it's true that there are not guarantees in an IUL contract, you can 1035 out (into say a whole life if you must) if things are not going as you had hoped
ContrarianFire Yes, you can 1035 out if you must, but the problem is that when IUL’s normally have problems is later in life when costs co way up and insurability goes down. You can only 1035 into another policy if you are incurable in the first place....
Agreed, People think UL is the same as IUL. In the IUL you have a FACE AMOUNT that will NEVER increase in cost and a term side that WILL. Example my wife has a policy that we got that has a set amount for the FACE AMOUNT and for the Annual renewable term side the first year it cost $8.... PER YEAR... for $900,000... That's a steal if you ask me. now we're at about $21 PER YEAR. I would just say ask all the questions you have, and ALWAYS over fund. There's IUL companies that are MUTUAL as well, meaning the policyholders are shareholders.
@@dagobertocruz158 I think what they're laying out is that, the cost of insurance for IUL shoots up dramatically when you're 65+ because the nature of annual renewable term. I agree in the early years when you're young, the COI is pretty cheap, but the real issue is when the index doesn't perform as expected, and the gap between your cash value and the face amount doesn't get smaller as planned when you get older, then COI will put huge stress on the index performance if that makes sense.
@@johnnysitu I agree with what your saying. The thing is... they're painting the IUL as a UL that's One. They're painting the IUL as a bad product as if they're devastating Two. I prefer IUL over Whole life anytime. The agents need to be trained properly, that's what! You have the option of turning off the term rider with some companies. Some companies offer living benefits, which is a huge benefit in case and insured lets say slips and falls breaks their head and remains paralyzed. A regular life policy wont pay if they don't pass away, living benefits will certainly pay. I can go on for days. IULs are PHENOMENAL for high income earners, tax exempt growth, end less retirement income and death benefit for that grieving family.
Dagoberto Cruz I think it is not the argument that which one is better, IUL does come with higher upside potential, the issue I am seeing is a lot of agents demonstrate 6-7% compound interests for index performance, which to me it’s not feasible. WL is just more stable because everything is guaranteed, so when it comes to infinite banking concept, which is what these guys are talking about, WL is more favorable for the job. IUL on the other hand, if structured properly for high cash value, it’s good investment alternative considering its tax benefits etc.
@@johnnysitu But they're not explaining that to the public rather than highlighting the negatives on the IULs. 6% I think Is a good average, Remember the floor is going to to keep bad years at 0% and the cap lets say 10% that conservative. Because there's UNCAPPED IULs out there btw just saying. Either way, The S&P 500 5 Year average is 9%, 10 Year average 6%, 15 average 5%,, 20 year average almost a 4%. IUL's are for the long haul! The illustrations show an average, which is fine in my books as long as the cash value isn't loaned more than 90%. If you know infinite banking you know that you can borrow from your policy and it's like the money is still there 🤯 you'll continue earning interest. The last time the market had more than a three year negative streak was the early half of the great depression.
This was an excellent video. Whole life is an excellent product. IUL is an excellent product also as long as the customer understands that there are no guarantees. Only the death benefit is guaranteed. As long as they understand the risk level of IUL its all good. By the way, you should not sell IUL to anyone over 48 years old.
@@straitjacketstudios For one thing, the fees *really* start to get expensive when you're reaching middle-age. Moreover, the compounding effect that makes an IUL a better "long-term investment" may not pay off if they bought an IUL this "late". Speaking of which, that downside protection that comes with an IUL needs several recessions to make the opportunity cost worth it. At that point, it's better to lock in a modest rate.
I like both and for the IUL contract to flourish like the ones I've been presenting for over 20 years, you MUST be Maximum funded. As far as life insurance companies increasing expenses on current policy holders, well it's never happened with exception of I think 3 of them out of the thousands that offer IUL. Your insurance cost go down as your cash value increases, which typically happens when you Max Fund them.
Hey Paul, I hear IUL agents mention the fact that fees have NEVER been increased. To me that is a very short sighted thought process. Given the fact that IUL's in general are younger than me....there really hasn't been much time for them to see a need to change the fees. However, in the long term low interest rate environment I believe we will be remaining in, that will put stress on the insurance companies. The IUL contracts will wind up having to pay in extra fees to cover the guarantees of the Whole Life policies. If the fixed income market won't accomplish it, it'll come from somewhere. And I know for a fact (based on direct conversations with IUL designers) that this was one of the intentions of IULs - a hedge for the company.
When you say the cost of insurance goes up give me a figure of that that looks like? because if someone cash value is 500K and they are getting an average of 7% returns then unless the cost of insurance is over 1 or 2k per month then I dont see it being a problem.
I believe the pt here is that if you can do the same in another product w/o the coi increasing every year why wouldn't you choose that product instead? Why put the risk on the client when you can choose a carrier that will take (on) the risk?
@@LIFE180 i agree. I know there are lots of agents out there that like to get that big front load on a policy for a client that cannot afford that payment on that huge death benefit. I like to take care of people. I can appreciate your video. Thank you!
@@rp_FGBWA7700 right, increasing costs AND the fact that you lack control as the policy holder. The insurance company can change cap rates and fees whenever they need for their benefit.
@@LIFE180 How is that that owner has "control" though.. Well, let me back up a minute... The "cash value" portion is then invested into the actual market, yes? I understand that you can NOT have tax-free income with WL, this is true , yes?
You say if you have a few 0% years in a row then the fees eat you up. Well in a 401k if you have two or three negative years in a row then the fees will eat you up and you will end up putting money into to something that is losing money.
I was not comparing an IUL to a 401k....we were comparing it to whole life. I am against 401k's as well. See the new video series on the 10 Perils of Your 401k
LIFE180: Leading Into Financial Excellence ok fair enough whole life may be safe but the upside is not there compared to an IUL. I understand the video but you all make it seem like 100% of the time an IUL will fail. If structured correctly and an IUL with the right company it can work wonderfully. The markets aren’t going to be 0% 3 straight years. That’s really the only way the policy will not work.
@@LIFE180 Yeah Im against 401k's as well, why would you take advantage of a company giving you free money and if it's structured properly average 9-10% Sounds just ridiculous!! Remember the last ten years bud, I've already shut you down on that ;)
Great video! Is Caleb still offering a copy of his book "The AND Asset" to agents? I recently joined WFG (which is a whole other story), but was interested in reading the book as a means to self-educate myself since the training I'm currently getting is sub-par at best. I know this video is a couple of years old, so if not, I still plan to purchase it.
Hey sir I want to create a 3 policy Whole life for my 3 20 something year old children at 800,000 per for 10 years where I’m paying off the first year in full
Hi Fred, You can email me Chris@LIFE180.com so we can speak directly on this - and I can give some guidance and connect you with the right people on the team to help if it makes sense.
I'm so glad I watch this video. I was just on a call with an agent. I mentioned to him that we wanted to start investing in Real Estate and he told us that we could borrow against the IUL policy to invest??? I got a not so good gut feeling about what he was trying to sell us. Was I wrong? My husband want us to get this policy... Please help:(
I would avoid using an IUL for the purposes of investing in Real Estate. If you would like to talk with Caleb's team, he can help give some guidance and at least give specific ideas on execution. Use this link:. Https://life180.andasset.com
I’m just getting into IUL sales just wrote my first 2- I am whole life gal for the last 20+ years. These products seem very complicated to explain the illustrations to clients and I’m not comfortable doing what I don’t understand. Thank you for clarifying this information for me.
The only way an IUL does not work is if you think you are going to put $100 bucks in it the whole time combined with the fact if the market stays flat and negative. If you start an IUL at about $200 and increase it on an every two or 3 years basis then you will be fine. To say that an IUL does not work is basically acting as if the market will be negative every year which will not happen.
My IUL policy has a floor of 0.75% and a cap of 15% and if you look at the past 20 years of the market, the average would’ve been around 8% given my floor and ceiling, therefore, this vastly out paces a whole life......all the while.....with my IUL I have the OPTION to choose a fixed interest rate which will yield almost the exact same numbers as guaranteed dividend paying whole life. So that means if u have the option to choose a fixed interest rate with an IUL that will yield very similar numbers to a whole life, then why not get an IUL? Cuz IULs are evolving and you have the option to choose the fixed interest rate at the beginning of the every year whereas with a whole life you don’t have the option to switch
The question is will the insurance company will keep the cap at 15%. How long have you had the policy? I believe the cap will be quite a bit lower in 10 years.
Victor Cuevas I am a licensed agent and I just talked to my carrier and they stated that their 15% cap will not be going down anytime soon. However, if their cap does go down...I always have the option to choose a fixed interest rate of currently 3.50%....so what’s the point of getting a whole life over an IUL if your argument is that IULs have market volatility? Because like I said before I can literally show you that I can choose a fixed interest rate on my IUL if I so choose...
3.50 percent won't help much after costs are subtracted, especially in the first 10 years. Way below what a good whole life policy pays. These policies are sold by most agents at high illustrated rates. So once the cap is dropped 2 or 3 percent, the whole thing starts to go south. If the illustrated rate is 9 percent, or 8, the agent should also run at 5.5 or 6 percent tops and show the client. Even at 5.5 it can look decent. That way there is some breathing room. I want IULs to work. And if the insurance companies can guarantee a cap to within 2 percentage points, you'd have a super product. Won't happen. I'm looking at them again because some improvements have been made. I wrote a ton of IULs pre 2009. Designed them perfectly. But when you start at a 15% cap and end up 8 or 9 years later with a 6% cap, not much you can do. The policy is devasted in those first critical 10 years. Not to mention when the insurance company starts asking for more premium. If you have a 15 year surrender period, the client gets hammered in a 1035 exchange or upon surrender. That's why I graduated from the Infinite Banking Institute in 2013 and started writing whole life. I've found a couple IULs that could work, but I see that IULs are still being sold as they were 15, 20 years ago...as if nothing negative will happen and everything in the policy stays the same forever. The risk still lies on the client with no real guarantees. Like I said, I'd like to see them work out, but as an advisor licensed for 25 years writing terms, ULs, IULs, and whole life, I speak from long term experience. Most agents writing IUL don't have much experience writing them. And those who are designing them right don't have many policies on the books for more than 4 or 5 years. I got into IULs 15 years ago after attending boot camps with experts and learning to do these the right way. But after the interest rates dropped to practically zero, the caps started dropping like crazy. And interest rates are still low and will stay there for a long time due to this economic downturn due to Covid 19. The third major downturn in the economy in 20 years.
What I want to always see on the IUL policies is how the GUARANTEED column of the illustration looks. If it breaks down, then the insured should go whole life. All IUL agents like to dismiss the guaranteed column like, "that'll never happen". IUL in general is around 30 years old....so there isn't really enough history to know. And look at all the things happening in the world that "have never happened before". Take the guarantees of whole life and take the risk when you deem it appropriate through policy loans.
@@LIFE180can you please explain to me how the guarantee column works? What is it illustrating? A 0% return alway? Or what is it exactly. My understanding on the guarantee is that if let’s say you have the money on a 401k and the market performs bad 10 years in a row most likely you’ll have $0 left correct? O. An IUL yea the policy will lapse but you’ll have money so I still don’t get how that’s a bad thing. You just like WL and got married to it that’s all but bashing on IULs when you know they are far more powerful than “other type of investments/savings” seems unbiased. Might as well put the money in a savings account then cause the way you bash on IULs makes it look like anything is better. Maybe WL is better for IBC but still think the concept can be used with an IUL.
How about you try to do a video with Doug Andrew on Whole Life is the way to go and of course he would be on the IUL side. I am a licensed agent and have studied IUL in and out and even own one myself. Also watching Doug’s videos here on RUclips I’m pretty convinced that if structured properly and funded properly an IUL will perform nicely.
Would be happy to do a video like that with Doug. Agents can think what they want and say what they want. The dangerous part of IUL’s is they are sexy. They have some interesting features that make them fun to talk about and sell. They illustrate very well. The problem for me is that I have had far too many conversations with the people who ACTUALLY DESIGN AND CREATE the product. When you know why the insurance companies are going towards IUL (hint: it’s not for the benefit of the client), you realize that if you are looking to buy WL or IUL, I will stick with the WL.
@@LIFE180 maybe you should do a video showing possibly an illustration with the detailed print included showing why the IUL is designed to put the company at no risk and transfer it to the client. If that video already exist point me to it. But at this point I can’t see how the risk is on the client especially with the FIFO feature on the back end.
Dude, be careful here.Doug Andrew and his sons have some serious ethical problems. They have repeatedly used IULs inappropriately. Doug Andrew is a con man.
I have a completely unrelated question. I had a LI agent tell me I HAD to give my bank account info in order to apply for coverage on an IUL. I have never had to do this when purchasing a term product but was looking at an iul or wl product. I would rather see what health rating I get and what premium would be before providing that info. Just seems a little backwards to me. Any feedback would be appreciated!!
You should only need to give your bank account information when applying if you are looking to bind coverage at the same time. That is a little trick agents use to get you to commit to the policy, typically. Maybe they were just new to the biz and were trained to do it that way...? But it certainly shouldn’t be required to apply and get a rating.
That agent is not very well trained. From what I have heard, agents would run a more general analysis on your income vs expenses plus generally how much money you have saved before continuing to sell insurance. If that agent has not run that analysis, run away to a new agent.
If you understand the risks in IUL and the actual math behind the actuarial science then you realize they are not really designed to out perform whole life long term. Check out this video: ruclips.net/video/zHUsh82zYA0/видео.html. I go through the history of IUL regulations to STOP IUL companies from being able to illustrate at the irresponsible rates they do....yet they keep maneuvering and creating different riders that don't really get the policy to perform better long term...they just get the policy to look better on paper to sell better. This is why there are so many class action lawsuits on IUL companies. That said, IF you understand all this and want to take all the risk in IUL for a potential 0.5% better long term IRR than whole life, have at it. AG 49-B is coming and it will turn the IUL market on its head.
IUL's still have life insurance companies with the ability to increase fees and costs in the policy. Let me ask you a question, in the long term low interest rate environment we are inevitably entering, where do you think these companies are going to turn to get the money they need? It won't be the whole life policies because they can't. IUL's will support the Whole Life contracts.
As a relatively new agent in this business, how would you go about selling IULs to clients. What key things would you mention to them so that they are much more understanding of this concept and know the risks involved with it.
Brian, I would say that it is all expectation management. Illustrate at a 5.5% assumption and set it up for min death benefit and Max cash value. If you show them those set of assumptions and the policy still works for them, I think you are safe. However, fundamentally, I still disagree with the idea of using insurance "as the investment", which most IUL companies are essentially doing.
@@LIFE180 thanks for that! Also, if not using it as an investment how would you go about using it? As in what purpose would it serve to the client to use it as? Once again thanks for all of this info!
@@brianwest6752 I have created a lot of content on this specific topic because it's one of the most misunderstood elements of life insurance. Your policy itself is a storage vehicle. Read the book The AND Asset by Caleb (who I filmed this video with). And watch some of our other content. It's stuff that every new person to the industry should understand. Feel free if you have questions as you go through the other videos. I will respond in comments.
LIFE180 why are you against IUL as an investment? You can’t lose, but you can get a max return of 10% base on an index of the S&P 500. The stock market has averaged an 8% return over the last several decades with the risk of losing 40% in some years! An great investment should be liquid, safe, tax advantaged, and have a good predictable rate of return. My IUL has all of those things, plus if I get disabled or get chronically sick, then I can use the death benefit while I’m alive to take care of my medical and living expenses! What other investment do you know of that can do all of those things simultaneously?
Said it before, and am saying it again, as soon as people can quit trying to get a life insurance product to compete favorably with true investment products, the simpler life will be for everybody. Think about it; you ain't gonna win a Kentucky Derby with a Clydesdale!
I have heard numerous times agents say cash value policies are not an investment. Can you clarify the criteria used to define something as an investment or not an investment? You are talking about IRR and risk. Arent they both metrics used to define an investment?
An investment is defined by risk. Whole life insurance, if used and designed properly is guaranteed and is a banking or savings alternative- not an investment. Because you can't lose your money. Investments carry with them risk, and thus the possibility of losing money. Never invest in life insurance. Use it as a banking alternative and you can create amazing leverage to create a hedge to reduce the risks in other investments.
Well number one iul is not as risky as they make it seem because as you're getting older you're supposed to switch from option b to option a at which point you start to self ensure yourself and the term insurance inside an iul although the cost per thousand goes up it actually becomes decreasing term so you're buying less units of insurance every year you build more cash number two you failed to mention that iul's also hold the same provision found in whole Life policies which is the fixed interest rate account which credits you 3 - 5% so if you always wanted something safer due to fear that the markets will not perform you always have the same fixed account option available
I will respectfully disagree with this statement. In theory, what you are saying is correct, but at the end of the day, you are taking on unnecessary risk when comparing to a whole life policy. The major risk is the fact that contractually, the insurance company has the ability to alter the terms of the contract in a major way. That is not possible with whole life. IUL has been great the past 10 years in the largest bull market in stock history. But that's the only reason it has been so popular. Wait to see the next decade. It won't be nearly the same.
@@LIFE180 yes but you're also talking in theory no one can say with certainty how the markets going to perform the next 20 years whether you're talking about the domestic markets or international markets and like I said before are you all also carry the fixed interest account and the only way an Ensure can jack up the rates is if they're becoming insolvent because they would have to file with the state commissioner and show proof of adverse mortality they cannot just change the rates overnight if they wanted to plus mutual insurance companies already profit a lot from the high cost of a whole life policy and the high interest rates that are typically associated with these accounts this is how insurers manage to stay afloat and continue to pay dividends during the great depression and the last great recession we had in the 2000s
@@429mas That is actually not true. Contractually, the life insurance company can increase insurance and admin costs any time...it is built right into an IUL contract. Conversely, we simply have a difference in philosophy. You are claiming that IUL's are a great investment tool. I am stating that if you are ever using an insurance product as an investment vehicle, you're looking at it wrong. Insurance companies are not good with investing or growth. They are great with guarantees and security. That's why I like whole life. The guarantees are FAR SUPERIOR. Then you can access your money to invest in actual investment opportunities when they present themselves (like cash flow Real Estate, Business, AirBnB, Flipping houses, Turo, Outdoorsy, etc...).
@@LIFE180 I don't view cash value strategies as Investments I view them as assets and yes guarantees are nice to have but they're also expensive while taking on a bit more risk becomes more cost-effective there are no deals with insurance plus most of the people buying whole life for the IBC concept are not successful entrepreneurs or Real Estate Investors
@@429mas I have no idea where you are coming up with the statement that most IBC users are not real estate investors or entrepreneurs....🤔. If they aren't currently, they need to be. If not, IULs or whole life won't be good for them because if you're simply relying on policy performance, you'll be very disappointed. The real power comes from the leverage the policies give you. Period. But for that to work, you need to fit it into a strategy.
Having watched the video and after reading several comments, I’ve concluded that the only thing that is guaranteed is that people don’t listen very well.
HAHAHA, well said. I am baffled daily by the responses I have to make. But I have committed to trying to respond to EVERY comment. And so it goes....lol
I like having IUL because I can strategically use it in different ways than a Whole Life policy. But I will say that I think Whole Life has a better risk-adjusted return, and is better for the general public because of its simpler design and more secure policy longevity.
@@LIFE180 Thanks for asking! ****Nothing I say below is an endorsement of IUL over Whole Life.**** When the stock market (S&P 500) drops, I can allocate IUL funds to the uncapped strategy (with spread percentage that you must overcome). This does, however, require some tedious wrangling with policy forms and/or dealing with customer service reps who often don't fully understand the policy mechanics themselves. There's also the risk that the spread deduction will leave you with less interest crediting than compared to the capped account. But the gains in the uncapped can be large---albeit erratic over time---such as when the market dips, say, 15-20% or more. In a down market, I can also use short-term arbitrage loans from the IUL to buy index funds through my brokerage (preferably in a non-taxable account). With my particular insurance company's policy, I can earn up to a +4.75% spread on a one year point-to-point indexed loan segment---plus the gain from the brokerage index funds themselves. It's a way to get some extra juice when the stock market bounces back. (But I certainly wouldn't count on getting indefinite positive arbitrage in retirement, as shown in many illustrations.) Again, there's the risk that the loan spread might be negative---which could cost me net interest if the market does not bounce back sufficiently. I could certainly use a wash loan, but in a down market the probability of making positive arbitrage on the loan is pretty good. Nevertheless, over time I've come to the opinion that these complex intricacies of IUL may actually make the policy **less** attractive since there are more moving parts and more policy micro-management required. It can be a pain---especially if someone is unfamiliar with the process. But if you maximum fund the policy and don't mind going in the weeds a bit, you can use the niche features to your advantage and give your wealth building a little extra boost. Or you could just simplify and do it all with Whole Life. As I commented before, I do think that the risk-adjusted return on Whole Life is better when compared to IUL. When you factor in the additional return risk of an IUL---combined with its greater need for active management---I have come to the conclusion that Whole Life is a better proposition for the average person looking for a safe place to store their wealth over the long term. But while I have my IUL, I will work it as hard as I can. :) Cheers!
@Max Passion Hey Max. Fortunately my loan rate is fixed in my IUL, so I do have some safeguard there. I am, however, hoping to convert a term policy of mine to Whole Life in the near future. A fixed loan rate there would be wonderful, too!
I am a big fan of whole life because of the guarantees. Plus if you structure it properly, you still keep much of the flexibility people like in an IUL policy. The biggest difference between the two are the guarantees. Since I view a properly structured life insurance policy as a storage vehicle (not an investment), I like whole life. I think you should be cautious of anyone selling you as IUL being a great "investment". I have lots of videos on this concept you can check out. Let me know if that makes sense or if you have other questions.
tracy lieu I would just call Caleb’s team if I were you. I am not sure what your current situation is, but if it can be done, he can help you figure it out. Go to life180.andasset.com and you can set up a conversation with him and get a copy of his book for free so you learn more about the strategy.
@@haidao5060 It is easy to make a statement like that... Also, it is easy to make that happen during the longest bull run in the stock markets history.
Depends on what you want to do with the policy. I am happy to have a conversation with you to see if this makes sense for you and give you some clarity on how it might fit into your life personally.
Hey what's up man just ran across your channel today, just subscribed. So in your opinion who is the ideal client for an IUL or is Whole life always a better fitted product? There's never a product which is BETTER right? More so situational on our client's end goal? Thought's on this? Also what do i need to do to get a free book? :)
Hey Darren, thanks for the note. Here is how I break it down. I would never say one is better than the other (Whole Life vs IUL) as an all encompassing statement. However, I will say that for how I use it and how I coach entrepreneurs to use it, whole life is the better product. If you are someone who wants a little more upside and is ok with a bit more risk, then an IUL works. To me, it doesn't make sense to go that route most of the time... To get a free book? Shoot me an email at Chris@LIFE180.com with your address and I will make sure Caleb's team shoots you one.
I heard you mention Don Blanton. I'm reading his Personal Economic Model book and it's quite good so far. It doesn't seem to get into products until maybe the last chapter, which I haven't read. Have you read the book? Is he more of an IUL guy?
Don is much more of a WL guy. He has adjusted his software to allow for IUL'S, but I know he prefers whole life based on personal conversations with him.
@@LIFE180 I see. Is he someone you respect in the industry or are there others you'd rather learn from? I just heard someone else mention him and bought one of his books. His Personal Economic Model book is good so far, but probably not as easy an introduction to WL/IB as The And Asset.
@@johnp7739 I never really got into his PEM much. Don't get me wrong, It's right on the money, but I have other ways I like to talk about how money works. I know a lot of people who use the PEM with a lot of success. Don in general is someone I have immense respect for in the industry.
Have you ever looked into MPI (Maximum Premium Indexing)? It allows you to leverage the cash value to increase dividends. So you to grow money exponentially, 0% floor with 11-12% cap based off S&P 500. Any opinion?
I am not extremely knowledgeable in this product yet. I will research. My gut is that all new product designs by insurance companies are designed to offset the risk to the insured, so that's a negative. Not sure if that's the case with this? Remember that with all indexed life, the 0% floor is never a pure floor because you always have insurance costs. That needs to be taken into account. Do you know any specific companies that offer this MPI?
SunCor Financial locates in AZ. Spoke to Dan Thompson and he is in support even though he has always been in support of whole life instead of IULs. It’s structured different where they leverage the money in the policy to compound the dividends. Look into it, it appears that it could be revolutionary in the invest/life insurance space.
I have never heard of that phrase before, but Maximum Premium Indexing sounds like a marketing phrase for what is Indexed universal life. 0% floor with caps tied to S&P. If the market is negative you are protected at ZERO, but if they are above 12, you are capped at 12%. Anywhere in between 0-12 you would get that number. That's how they market all IUL. And if you are young and in a good economy, it works. But the problem is as you get older and when you have several negative years back to back. The 0% floor does not account for internal fees, so there will be a negative impact on the account (especially early in the contract or if you are 60+).
My IUL policy has a coverage lock and a price lock....my cost of insurance DOES NOT change. What are you saying? I can literally show you my policy and my cost of insurance will never change
Matt, send your policy. Not only does your cost of insurance change, the ability for the insurance company to increase your fees and costs is built into the contract.
You guys are nice and seem to have good intentions......but.....I chose to watch this video for an explaination of what the title of this video is about ( IUL vs WL which is better? )....with details and examples....and you did none of that. Just rambling on and on about how bad IUL is and your personal stories and experiences from the past ( and promoting your book ). Very disappointing based on the title of this video.
Another thing critics say is unless you get 6% every year an IUL does not work, the illustration basically shows an average. Because an IUL has a guaranteed floor on 0% let's say out of a 16 year period half of those years you had a gain of 12% and the other half you got 0%, well that's the same as getting 6% every year. At the end of the day someone has to increase their contributions over time and if you do not that's why they don't work. I know you aren't comparing to a 401k but a 401k is designed to increase contributions over time as well.
I have a IUL policy and I had it for almost 5 years now. I didn’t know much about it so I was just putting $100 every month but since I learn about the benefits of whole life and IUL I started putting $500 every month. Should I stay on IUL or terminate it and start a whole life policy?
What kind of link for agents are you looking for? We are working on an agent training platform because we are seeing such a need and desire. Is this something you are interested in?
Caleb is, I am not. I love it and use the strategy for my business, but I do not sell personally anymore. If you need anything, you can reach out to Caleb using this link: www.BetterWealth.com/LIFE180
All you both did was knock the iul. Why ypu not mention the law of diminishing needs? What about the cost of insurance decreasing as your income grows. You also stop paying at the age you have request.
Law of diminishing needs? If that's the case, why do the richest people in the world have the most insurance? 🤔 Law of diminishing needs is a broke person's mindset. How does cost of insurance decrease as your income grows?
@@LIFE180 so you built them for years. Your video title was the difference between IUL & whole life correct? Why did you not compare the fees in a whole life vs a IUL? I like whole life for the instant cash accumulation. Why do you prefer it vs IUL?
Right, that's a pretty common sales pitch. AND, it is fine if they do that. HOWEVER, expectation management on how much supplementation is key. The assumptions on illustrations are horrible most of the time. It will normally produce about 20-30% the amount of income in best case scenario compared to what they illustrate it at....
Is this a serious question? Of course. I'm not an agent. I can't sell you anything. These are strategies that are great for entrepreneurs and Real estate investors. Don't compare it to investments, compare it to a bank account. The investment should be the real estate. Not the policy.
Can you please answer the following questions. 1. Can you provide details how dividend is calculated on the policy 2. Does the cash value go to my family if i die ----level contract cash value never belongs to the client ----company 3. Do you provide the year by year ledger on the policy cost 4. What is the loan rate i will pay if i borrow the money---- is it a fixed rate or a variable rate. I had a whole life policy but after doing a thorough research i am hands down with IUL any day because i was able to calculate the IRR ont he policy against the whole life. Please provide apple to apple comparison. Whole life policy is also not bad but its like being in a flip phone policy..... financial industry has really changed and people should do their own research before making any decision but understand how the product actually works.
I understand what you are saying. The answer about a ledger on the breakdown of the costs in a WL policy is, "not really". But here is my mindset on that. I don't care about the fees breakdown. I only care about actual performance. And the performance of a whole life policy (after fees) is way better (if structured properly) thank people give it credit for. Loan rate should be fixed, but it can vary by company. Just like the IUL, the death benefit is what your family will get. If structured properly, the death benefit will increase as the cash value increases. Dividend is created by the over all performance of the general account of the insurance company. When you buy a policy with a mutual company, you are the equivalent to a shareholder of publicly traded company. Your money is stored in their general account and then you are paid accordingly. The comment on the flip phone is a good one. Pretty funny. And I can see why on the surface you would think that. However, I would equate it to saying that what if a flip phone was simpler, but your new smart phone was more prone to getting a virus...and if it got one, you would lose everything you put into it???🤔🤔 Listen, I get on paper that IUL's are sexier. I would never deny that. However, after spending several years with real conversations with people who were really hurt by those policies it made me start digging. At the end of the day, let me ask you this... Does it make sense that a life insurance company would create a product that: 1. Pays higher commissions to the agent (40%+ more in many cases) 2. Offers higher upside to the client 3. Offers no more downside to the client 4. And still keeps all the risk? It doesn't make any sense. That's how IUL's are sold....that's not how they work. I spoke to an actuary who was involved in product design for IUL's and they flat out told me that IUL'S are designed to shift the risk from the insurance company to the insured. Period. For the purpose of the use I coach entrepreneurs to leverage the policy....I believe it is a big mistake. And for those who say they are okay with that risk...I say buy term, save a minimum of 1 year of income in liquid location, then start investing in an S&P 500 index.
@@ronrutjr Most do know what it is, but they do not see life insurance as an investment. Most wealthy clients are looking for a safe haven to park money, not invested in life insurance. Most BOLI ( bank own life insurance) buy whole life. I've never seen a corporation buy and IUL for a key person insurance. As my mentor told me "don't do what banks tells you, but do what the banks does."
Working on the fix. It didn't seem bad on my end when I listed after my editor edited it... All future content will be better. Thanks for the heads up!
Fees in a UL contract go down as you increase cash value the problem with whole life is that it's the most expensive form of life insurance to begin with due to guarantees and the irr only grows at 4% a year and you can never have both the CV and db in WL and the loan charge is usually greater than what your earning in the policy
Mario, you can talk Circles on those topics, but the bottom line is the fees inside of IUL go up more with age. You can do WL with a non-direct recognition company easy. Plus, if you take a loan in an IUL, it's either a wash loan or you're taking risk because the policy could get zero...then when you add in fees it is horrible. Especially for older people who are using it for retirement. The bottom line is that no insurance policy should be considered an investment. It's a storage vehicle to give you leverage. WL is the most guaranteed product. Insurance companies offset the risk to the insured with IULs.
@@LIFE180 Fees inside the IUL policy Decrease over time as the net amount of risk goes down But the COI goes up Until you eventually hit corridor When you take a look at the market we typically Have 4 to 5 years of 0 In a 20 year period So the chances of Positive arbitrage Are good and if you always wanted something Safer you have the fixed loan option
@@LIFE180 IUL premiums are fixed for life once approved through underwriting. If a parent gets an iul for a newborn the premium will be rated as a newborn for life. Unless the owner of the policy allows it to laps by not paying premiums. Also comes with an income rider, guaranteeing tax free retirement for life, or until 120 years old whichever comes first. All of this while still maintaining a hefty death benefit due to structuring it to increase to avoid a MEC
@@Simonsaysboxing The health rating is guaranteed. The cost of insurance and internal expenses go up. You can do guaranteed lifetime income riders with some companies (not all), but when you do that, it cuts down on potential (as the insurance company triggers the rider and guarantees income based on account status at the time of trigger). Rarely will it look like the illustrations shows 20 years later though when you go to trigger the income.
I think is dumb when people discuss what’s better and what’s not. I think IUL is a great product and I also think WL is great. But Is like saying Apple is very than Android or biased. Everything has there pros and cons but is up to the agents to structured correctly for their clients. Regardless of that, good video
I think my problem with IUL is more around the nature of how people sell it. It's very dangerous. It isn't bad...it's just isn't all people make it out to be...
I am mid way through this video and i understand what your saying so far. Right now I am pursuing both but i am currently analyzing a illustration of a IUL based on what I want my policy to look like.Honestly i think what really matters is structuring your policy they way you would want it to actually be and understanding your policy 100% before you sign because a illustration is not the policy and the illustration should tell you that.READ AND UNDERSTAND IT COMPLETELY! ASK TO PUT IN LAYMAN'S TERMS. So i understand that some key things may not be on the actual IUL policy vs. the illustration. I think if you understand a IUL than you understand the risk already b/c to my knowledge its base off the performance of a IUL. I am still learning but I just wanted to speak on that.
The part your missing is the terms of the contract in an IUL. The insurance company has the legal right and ability to change the internal costs of your policy every year. That's why the guaranteed column is there, to account for the increased costs, along with reduced performance in the market. The insurance company can not change costs in a WL policy
You don't get it if that's your statement. My risk tolerance is extremely high. I invest in real estate, businesses, cryptocurrency, and plenty of other opportunities that I don't get into. A properly structured whole life policy is just the best way to do it. Just because I have a high risk tolerance doesn't mean I need to trust the over valued stock market or invest in over priced assets like mutual funds.
@@LIFE180 14:25 "1) Most people are being sold a bill of goods that they don't understand" Yet WL fees aren't shown and the actual rates of return are almost always lower than illustrated? "2) It's not going to give them the result that they want" yet as you say, people buy IUL for investment purposes, and if funded correctly they'll end up with much more money that WL. Also, with wash loans available instead of the high loan fees on WL, they'll be able to access it without fees that are often equal or higher than their "Guaranteed" return. "3) They're taking on a lot more risk than they should, especially when there are better opportunities out there.," Now you're telling clients what their risk tolerance should be, and inserting your preference for more guarantees on what's "best for them?" I respect WL, but it's not a better product for someone who's leaning more toward cash accumulation.
@@only1dliv It seems our disagreement is philosophical. Responses to your statements numbered to match: 1) There is a lot of talk about whole life fees. Honestly, that argument is misguided. At the end of the day, who cares about fees. Compare apples to apples. What other guaranteed products will give you what a WL policy will give you? I compare it to a bank account. Keep your money there and there are less fees, but you also wind up with less money. PLUS - I would only buy a whole life policy based on the guaranteed column. You are missing the fact that I only suggest having a WL policy as a bank account on steroids. That's it. Focus on guarantees in the insurance product and get your returns and take your risk elsewhere. Want to invest in stocks, go for it. Real estate, even better. Have a business you want to launch or invest in? Fantastic. Want to become a hard money lender, this is a phenomenal way to do it. 2) People are sold IUL's for investment purposes. Your statement, "if funded correctly they'll end up with much more money that WL", is incorrect. It should say, "has the chance to end up with much more money". Because they are not guaranteed. Sure, they have done great over the past decade....no doubt..... But there is a reason insurance companies pay a much higher rate of commission for IUL's than WL. They can afford to because there is less risk to the insurance company. I don't know about you, but I think the next 10 years won't see the type of success as the past 10 years. Plus, the policy is 100% exposed to the will and fee changes of the insurance company as they get older. I personally don't have enough confidence in any company over the next 20-30 years to not change a contract when they are legally able to that won't benefit them and hurt me. WL GUARANTEES this can't happen to you. 3) All Caleb is saying is that if you have a higher risk tolerance, don't put it in an IUL. It's an insurance contract...not an investment. I could not care less what someones risk tolerance is. If it is high, WL is still a better option because I can still have a system that will create a greater return than having that money sit inside of an IUL. If it is low, the WL policy guarantees will DESTROY the IUL's. For someone who is looking for cash accumulation, I don't think they should be looking to an insurance product to create accumulation... If you are selling people on that, well, that's too bad. I coach entrepreneurs to create a system using WL to purchase Real Estate or build their business to invest for cash flow. The accumulation mindset of investing will be dead within a decade. You can use our strategy to take calculated risk (watch my LIFE180 Pyramid video), consistently increase your cash flow (passive income), and then flip the switch and create tax free income during retirement with the policy if you want.
LIFE180 1. How can it be misguided when the returns aren’t as illustrated and the cost to access the money is often more than the guaranteed return? I respect using it as a bank account on steroids, but I don’t agree that one should over look IUL if they are looking for higher returns. The things one can do with IUL’s and their wash loans make it a great tool to use in coordination with other businesses/real estate, that other products have a hard time competing with. Also, many companies IUL’s have the option for guarantees that still illustrate to outperform WL policies. 2. I agree that it shouldn’t be primary, but it is definitely a strong tool. Many companies have actually consistently lowered their fees over the years, so the possibility of change isn’t something people should run from. Now, while “has the chance to end up with more” is correct, no one expects the market to completely tank for years on end or else everyone would stop buying stocks and we’d all be buying Put’s. If it did tank for 10yrs, and averaged say 4-5%, a properly funded IUL would still come out stronger than WL in the long run. If someone is looking for a tool to expand retirement and has an insurable need, I’d say trusting insurance companies with your money following the S&P is a safe bet overall. Plus, there’s a reason Buy/Sell’s are booming with IUL sales. More cash for those with an insurable need. 3. It’s just off putting to think things like hard money lending (which most don’t have the capital for), Bitcoin (which has no real product or dividend potential), or a 5-7% cap rate on real estate (which as we see now, again, can fail) are considered good, yet IUL’s aren’t seen as a good option? Just comes off as biased in my opinion.
@@only1dliv 1. The cost to access the money should never be higher than the guaranteed return. Where is that coming from? Maybe I am misunderstanding your statement...? In summary for everything else (hard to be as detailed responding from my phone)... Once again, I simply philosophically disagree with using an insurance product and a vehicle for accumulation. And while the may be a chance an IUL will put perform WL, it's not guaranteed. Furthermore, there is a massive moral hazard in the way they are sold. More agents a going to IUL selling not because they are better, but because they can often make 50% higher commission rates. The nature of an IUL is the insurance company offsetting the risk it would take in a WL policy and putting it back on the insured... I worked with a major IUL provider (one of the largest), and I saw time and time again people having their contracts blow up in their face. Those are hard conversations to have with people who trusted an agent to do right by them. Then I had to go in and try to fix it and help them get back on track. As for the real estate comment...if you buy RE the right way, it should never fail. People run into trouble with their finances because they take too much risk far too early with too little understanding of the consequences. I could not care less if our properties go down in value and I lose half my net worth. The cash flow is still there. They are not leveraged with a ton of debt. And I would say if your cap rate is 5-7% you're investing in the wrong markets... Here is what I know, I was a top performing agent at a well known company. I got tired of it. They pressure you to sell proprietary products to earn credits to win awards and trips. That's the culture. All hidden behind the vail of helping people. Financial products are simply tools. You can't put your money anywhere these days and set it and forget it....I don't care if it is stocks, mutual funds, or and IUL. You need a more active strategy. You need to commit to your own future. You need to educate yourself. You need to invest in things that not only you understand, but that you can have a direct impact in the results. That's why I prefer whole life. If you align with the fundamental belief that the best investment you can ever make will be in yourself, WL is the way to go.
Hey Ron, It's hard to give specific advice on a RUclips video. If you would like to talk with someone who can let you see what it would look like to do this for yourself, set up an appointment to speak with Caleb's team at life180.andasset.com
I see in one of your replies, you say “yes! If you’re going to sell an IUL, it should be max funded with min death benefit but the problem is 99% of agents don’t do this.” But nowhere in the video do you say that. And it hurts us agents who actually do it. You say over and over in your video that you “want to be fair” but you don’t say anything about the IUL that can be positive in any way. They’re empty words. You say you don’t wanna say just bad things, you wanna be open and fair, but that’s it. You don’t back it up with any words after it. So you’re really not being fair. I’ve been an agent for over 12 years. I always sell the IUL min db, max funded. I tell clients they need a minimum of 15 years for this to grow and be used properly. Otherwise I don’t sell it. I don’t sell it as children’s college funds as there won’t be enough time to accumulate. I illustrate at 5.5% and also tell clients it can be lower, it’s not an investment but it’s great to tier permanent and term life insurance because you need more insurance when your kids are younger. But it’s nice to still have $100-200k to pass as a legacy and pay off debts, funeral costs, etc. sometimes I even do it option B then switch to A in retirement to save them money. I’m very conservative. I even tell them not to do too much in the IUL because in order to maximum the benefits, you should always max fund it. So do only about $300/m here and the rest of your retirement with a match or a Roth product where the monthly is flexible unlike the IUL. And even when they ask if they can contribute more later, I say no because I’m minimizing DB so much that you will Mec it out if u do. So let’s be fair to agents like me who do the right thing.
Hey Crystal, First, I love your passion for what you do. On the scale of IUL agents, you seem like one of the good ones. You're few and far between. I love how you have a 15 year time horizon and you try to set proper expectations. I would say at this point (this video is a bit older) that it's worse now than it was then. Cap rates are reducing. Marketing cap rates will never hold long term. That's my issue with selling IUL. The IUL expert I work with and trust is saying that his comfort level for illustration assumptions is in the 4-4.5% range. Could they perform better? Maybe. That's why he likes IUL...the potential of possibly being a bit better. But 5.5% would be absolute best case scenario....not what should be illustrated. I've been getting feedback like this a lot lately. What I have come to realize is that there are many IUL agents like you who have amazing hearts and want to do right by the client. I used to be that guy selling IUL. Once I learned how they really work, I couldn't do it anymore. Can you really explain how a company pays your IUL policy the indexing rates that it does? Do you really understand the fundamentals of the movement of the money in your policy, the general account of the insurance company, and how they purchase options? Do you understand the different moving parts in all of that which make IUL'S dangerous because it is IMPOSSIBLE for companies to keep cap rates above 6% long term? I know this stuff because I was on the inside. If you can write out the explanation on how this works, I'll be impressed. But I'll also be surprised that you're still selling them. I'm going to do a video on this topic to teach everyone what the life insurance companies really don't want you to know. They always say they take a portion of your account and buy options...it's really not that simple... that's a fact. I hope you're subscribed so you get notified when this video comes out. I may even try to do it live today...
@@LIFE180 thank you for taking the time to reply to me. No, I can’t say that I can explain all that. With that being said, I think, again, that every product has pros and cons. If there was one perfect product with no risk, then all the others would become obsolete. Even putting your money in a “risk-free” product bears risk of hyperinflation deflating your money, and so forth. If you suggest like in your video that you shouldn’t invest in anything you don’t fully understand, then I’d venture to say that 90% of people would never invest in anything unless it’s super simple and risk free, but again those come at a cost of low returns. I’m not saying people shouldn’t do their due diligence and try to somewhat understand what they’re investing in, but if we had the time to thoroughly understand everything, then we wouldn’t need agents and advisors. And many people just don’t have the capacity to learn at that level. I’m not sure that structuring a policy the way I do is riskier than stocks and mutual finds because I mitigate the risks as much as possible. And you can’t deny that some people do need or want permanent life insurance. And the question, why wouldn’t companies lower their caps to 6%? Because they have to stay competitive. If their fees go up and caps drastically go down, then no one would buy them. And I’m not sure how the return is at 4% on the cash value side (not the overall return including the fees) when the market has performed extremely well since 2008 (or 2018). And there are uncapped strategies. Check out Allianz’s uncapped Bloomberg and Pimco. They even let you lock in rates. You can set a floor of let’s say 10%, and once it hits 10%, lock it in for the rest of the year. Another thing to consider is that with IULs (compared to mutual funds), you can borrow money at a fixed 5% rate and turn your cash into a stream of income while avoid paying income taxes which you otherwise would do on an annuity. Paying 5% while still being able to collect arbitrage on certain years vs paying income taxes sounds good to me. Your thoughts?
@@hcrystalh That's a lot to unpack. I would make a couple simple responses... 1. Regardless of it being more or less risk than the stock market or mutual funds, the fact that you can't explain how they function tells me you should not be selling them. Once you understand how they actually work, if you are still comfortable with the risk, then keep selling them... 2. Borrowing is not a fixed rate of 5%. There are variable options and fixed options. The fixed options create anywhere from a pure wash loan to a 1% net fee. Variable loans can change and if you take variable loans and they increase rates, it get's ugly fast. It's just gross because these are REAL risks, but they don't let you illustrate them.... 3. People should 100% understand the risks they are taking and understand the moving parts of anything they invest in. Not that they have to actively manage it, but they need to know what the need to be concerned with. What's dangerous about IUL's is people buy the hype of how they illustrate (agents and prospects). When 99% of agents can't explain how they actually work, that's a dangerous position for the industry. SUMMARY - Agents NEED TO KNOW IN DEPTH how they work. Clients need to understand the basics. If not, it's not an ethical sale.... That's just my opinion in general, not an attack on you. 4. While you say every product has it's pros and cons, that's a lazy statement to me. You say you know this product has its cons, but you can't articulate them to me...yet you sell it anyway....? Think about that for a minute...
@@LIFE180 I understand what you’re saying and agree with you to an extent. But I think you feel this way towards iuls because you’ve been in the game. But if you’re going to hold this true for every salesman with every product, that’s just not realistic. Then 90% of salespeople out there are lazy. Car salesmen do not know 100% about every product they sell. Furniture salesmen do not know 100% the pros and cons of every material, the structure, the mechanisms, etc. Real estate agents, pharmaceutical sales reps, the list goes on and on. You’re saying that they need to know the basics, but what you’re talking about is not the basics. You even admitted it took you all these years of being in the industry to understand what you know now. In an ideal world, every salesman would know the products they are selling inside and out, but to get to that point would be analysis paralysis. Even doctors don’t know everything. But we need them. I highly doubt every financial advisor selling securities knows them inside out. Even insurance agents don’t know whole life policies inside out, yet you’re ok with them selling them because YOU personally have done YOUR due diligence and believe it’s a good product. But not everyone will have the same opinion. I’m not saying that you can’t have your opinion. Of course you can. It’s your channel. And I’ll probably continue watching your content and learning from them. I just think if you’re going to be “fair” or make blanket statements, they should apply across the board and not just about whole life or against IULs. If I know what you know, maybe you’re right and I would stop selling them. That’s not the part I’m arguing. So we don’t have to argue about that. Because I’m admitting you probably know more. But I just don’t think it’s fair to say certain statements if it’s not gonna apply appropriately to everything and everyone. Just seeing it from all angles.
@@LIFE180 I think also, IUL agents would be more apt to listen if you did go into greater depth and explained why IULs are “bad” compared to whole life policies. But really explain the mechanics and then allow us to formulate our own opinions, whether we agree with you and decide if we want to continue selling them. Instead of NOT explaining it in great detail and just saying IULs are bad and whole life is good and if you sell iuls, you are either a horrible person or ur lazy because u don’t know ur sh*t. That IS a personal attack. You know personally that in our industry, it’s really hard to be trained and find a good mentor. Few and far in between. So the ones who are more diligent watch videos like these on our own to try to learn, but I have yet to find one that really goes in depth and detail about them and one that’s honest, not trying to push sales. If you made a video like that, coming from a teaching standpoint with no hidden agenda, but also stayed neutral and said “hey, here’s the info. You decide.” Then maybe more of us agents would be more open minded. But there are far too many videos like these that attack the IUL without going into detail. So then it makes us wonder if the person making the videos really knows what they’re talking about or not. And then we’re back to square one.
The nature of an illustration is actual numbers with too many moving parts to illustrate on a white board. I could do a simpler explainer on a white board if that would help?
Unfortunately these two either are blatantly misleading you or the other option which is equally worse don’t understand life insurance. Great low cost infomercial.
The one on the right is super brain washed by his mentor. Live for 40 years at least before giving this kind of advice. By the way IUL beats the returns on whole life by a whole lot. Wholelife you must pay premium until policy end, unless you have "paid up by age 60 type policy" (premiums alot higher), IUL pay up to level before becoming MEC ( modified endowment contract) and you can stop paying premium at age 60 for a policy starting at age 35. Ya your going to have some low years but some companies offer a small percentage say .25% while if you were in 401K your going down with the market.
John, that may be the most ignorant and uneducated comment I have seen regarding whole life insurance. None of that is true. IUL does have a bit more upside, sure. But only if you structure it perfectly, which most agents that focus on selling IULs don't because you have to take such a huge haircut on your commission. Second, that person you are telling should live 40 years first has probably spent more time mastering this industry in his 5 years in the business than most people spend in 30-40 years. "Super brain washed". I would say you are brain washed on IUL if these are your comments. Just sayin...
@@LIFE180 read my 1st reply again thats what I said, also you don't dispute whole lifers pay premium until the end of policy which can be avoided with IUL.
To watch the updated 2022 Comparison of IUL vs Whole Life, watch this video:
ruclips.net/video/zHUsh82zYA0/видео.html
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I respect the opinion. I disagree that Whole Life is just straight out better than IUL. I've seen people benefitting tremendously from both. As someone who also holds securities licenses, I ABSOLUTELY AGREE that neither one is, should be sold or should be bought as an investment. Good job overall on the video.
Thanks!
@@LIFE180 So, just to confirm I understand.. The point to your video is that WL does NOT have SO many "admin" fee's because the risk is taken on by the carrier? Where as the IUL sends the risk to the client and makes them pay all the added admin fee's... ?
The illustrations that I’ve seen with both, especially using IUL have been designed (not by me) by using the life chassis for the living benefits. Most I’ve seen have exceeded the original illustration tabular values. These were all non-mec limited pay contracts.
Hi, what about a retirement vehicle vs a 401k or IRA?
I am trying desperately to understand the difference between WL & IUL and all I can find is that both sides seem to make the same argument against each other. I keep hearing the terms "properly funded" and "properly structured" by again, both sides seem to use these same terms as the "miss" on the other side. Can someone REALLY articulate the differences? I also constantly hear the pitch about the insurance company taking on the risk vs the client, and that also is extremely confusing. How so exactly?
Great question. Each one focuses on the properly funded and structured aspect because while both types of policies are vastly different, they can each be really harmful if not designed properly....which effectively means structuring it for the minimum death benefit and maximum cash value possible according to regulations.
That said, I am a huge believer that while whole life insurance is an amazing asset for the right person, it is not a great investment. People who sell IUL'S sell them as investment alternatives. That's dangerous in my opinion.
Watch this video on why:
ruclips.net/video/c7Wjzefcvog/видео.html
@@LIFE180 Thanks!
@@straitjacketstudios no problem. Hopefully that gives some more understanding. If not, hit me back and we can continue the conversation. Maybe I'll make a video to specifically help you.
You can keep IUL costs low by max-funding it. It just sounds like you philosophically disagree with the idea of people using insurance as an investment vehicle, esp one that investors don't fully understand. You are advocating for its use as a savings vehicle instead. While it's true that there are not guarantees in an IUL contract, you can 1035 out (into say a whole life if you must) if things are not going as you had hoped
ContrarianFire Yes, you can 1035 out if you must, but the problem is that when IUL’s normally have problems is later in life when costs co way up and insurability goes down. You can only 1035 into another policy if you are incurable in the first place....
@@LIFE180 so why not retire before 65?
Universal life is NOT an IUL. That's where you're wrong. Indexed crediting is the way to go. Not Universal life
Agreed, People think UL is the same as IUL. In the IUL you have a FACE AMOUNT that will NEVER increase in cost and a term side that WILL. Example my wife has a policy that we got that has a set amount for the FACE AMOUNT and for the Annual renewable term side the first year it cost $8.... PER YEAR... for $900,000... That's a steal if you ask me. now we're at about $21 PER YEAR. I would just say ask all the questions you have, and ALWAYS over fund. There's IUL companies that are MUTUAL as well, meaning the policyholders are shareholders.
@@dagobertocruz158 I think what they're laying out is that, the cost of insurance for IUL shoots up dramatically when you're 65+ because the nature of annual renewable term. I agree in the early years when you're young, the COI is pretty cheap, but the real issue is when the index doesn't perform as expected, and the gap between your cash value and the face amount doesn't get smaller as planned when you get older, then COI will put huge stress on the index performance if that makes sense.
@@johnnysitu I agree with what your saying. The thing is... they're painting the IUL as a UL that's One. They're painting the IUL as a bad product as if they're devastating Two. I prefer IUL over Whole life anytime. The agents need to be trained properly, that's what!
You have the option of turning off the term rider with some companies. Some companies offer living benefits, which is a huge benefit in case and insured lets say slips and falls breaks their head and remains paralyzed. A regular life policy wont pay if they don't pass away, living benefits will certainly pay. I can go on for days. IULs are PHENOMENAL for high income earners, tax exempt growth, end less retirement income and death benefit for that grieving family.
Dagoberto Cruz I think it is not the argument that which one is better, IUL does come with higher upside potential, the issue I am seeing is a lot of agents demonstrate 6-7% compound interests for index performance, which to me it’s not feasible. WL is just more stable because everything is guaranteed, so when it comes to infinite banking concept, which is what these guys are talking about, WL is more favorable for the job. IUL on the other hand, if structured properly for high cash value, it’s good investment alternative considering its tax benefits etc.
@@johnnysitu But they're not explaining that to the public rather than highlighting the negatives on the IULs. 6% I think Is a good average, Remember the floor is going to to keep bad years at 0% and the cap lets say 10% that conservative. Because there's UNCAPPED IULs out there btw just saying. Either way, The S&P 500 5 Year average is 9%, 10 Year average 6%, 15 average 5%,, 20 year average almost a 4%. IUL's are for the long haul! The illustrations show an average, which is fine in my books as long as the cash value isn't loaned more than 90%. If you know infinite banking you know that you can borrow from your policy and it's like the money is still there 🤯 you'll continue earning interest. The last time the market had more than a three year negative streak was the early half of the great depression.
This was an excellent video. Whole life is an excellent product. IUL is an excellent product also as long as the customer understands that there are no guarantees. Only the death benefit is guaranteed. As long as they understand the risk level of IUL its all good. By the way, you should not sell IUL to anyone over 48 years old.
What is the theory on the "no IUL over 48 years?"
@@straitjacketstudios For one thing, the fees *really* start to get expensive when you're reaching middle-age. Moreover, the compounding effect that makes an IUL a better "long-term investment" may not pay off if they bought an IUL this "late". Speaking of which, that downside protection that comes with an IUL needs several recessions to make the opportunity cost worth it. At that point, it's better to lock in a modest rate.
I like both and for the IUL contract to flourish like the ones I've been presenting for over 20 years, you MUST be Maximum funded. As far as life insurance companies increasing expenses on current policy holders, well it's never happened with exception of I think 3 of them out of the thousands that offer IUL. Your insurance cost go down as your cash value increases, which typically happens when you Max Fund them.
Hey Paul, I hear IUL agents mention the fact that fees have NEVER been increased. To me that is a very short sighted thought process. Given the fact that IUL's in general are younger than me....there really hasn't been much time for them to see a need to change the fees. However, in the long term low interest rate environment I believe we will be remaining in, that will put stress on the insurance companies. The IUL contracts will wind up having to pay in extra fees to cover the guarantees of the Whole Life policies. If the fixed income market won't accomplish it, it'll come from somewhere. And I know for a fact (based on direct conversations with IUL designers) that this was one of the intentions of IULs - a hedge for the company.
When you say the cost of insurance goes up give me a figure of that that looks like? because if someone cash value is 500K and they are getting an average of 7% returns then unless the cost of insurance is over 1 or 2k per month then I dont see it being a problem.
I believe the pt here is that if you can do the same in another product w/o the coi increasing every year why wouldn't you choose that product instead? Why put the risk on the client when you can choose a carrier that will take (on) the risk?
Finally I got the ideas how those work.Thank you
You are welcome. Glad it helped
Wow thanks guys! Super informative.
You're welcome! Glad you found it helpful. Lots more IUL videos on our IUL playlist you can find at RUclips.com/LIFE180
I have done both. Every time I write an IUL, death benefit is minimum non mec, every time. Has to be max funded
If you are going to sell IUL, it needs to be MAX CV / MIN DB, NON MEC, yes! The problem is that 99% of agents won’t do that....
@@LIFE180 i agree. I know there are lots of agents out there that like to get that big front load on a policy for a client that cannot afford that payment on that huge death benefit. I like to take care of people. I can appreciate your video. Thank you!
@@LIFE180 but COI will still increase yearly, wasn't this the biggest pt to your video?
@@rp_FGBWA7700 right, increasing costs AND the fact that you lack control as the policy holder. The insurance company can change cap rates and fees whenever they need for their benefit.
@@LIFE180 How is that that owner has "control" though.. Well, let me back up a minute... The "cash value" portion is then invested into the actual market, yes? I understand that you can NOT have tax-free income with WL, this is true , yes?
You say if you have a few 0% years in a row then the fees eat you up. Well in a 401k if you have two or three negative years in a row then the fees will eat you up and you will end up putting money into to something that is losing money.
I was not comparing an IUL to a 401k....we were comparing it to whole life. I am against 401k's as well. See the new video series on the 10 Perils of Your 401k
LIFE180: Leading Into Financial Excellence ok fair enough whole life may be safe but the upside is not there compared to an IUL. I understand the video but you all make it seem like 100% of the time an IUL will fail. If structured correctly and an IUL with the right company it can work wonderfully. The markets aren’t going to be 0% 3 straight years. That’s really the only way the policy will not work.
@@LIFE180 Yeah Im against 401k's as well, why would you take advantage of a company giving you free money and if it's structured properly average 9-10% Sounds just ridiculous!! Remember the last ten years bud, I've already shut you down on that ;)
Great video! Is Caleb still offering a copy of his book "The AND Asset" to agents? I recently joined WFG (which is a whole other story), but was interested in reading the book as a means to self-educate myself since the training I'm currently getting is sub-par at best. I know this video is a couple of years old, so if not, I still plan to purchase it.
I just recently joined as well. Can you provide any info on what you found out?
Hey sir I want to create a 3 policy Whole life for my 3 20 something year old children at 800,000 per for 10 years where I’m paying off the first year in full
Hi Fred,
You can email me Chris@LIFE180.com so we can speak directly on this - and I can give some guidance and connect you with the right people on the team to help if it makes sense.
I'm so glad I watch this video. I was just on a call with an agent. I mentioned to him that we wanted to start investing in Real Estate and he told us that we could borrow against the IUL policy to invest??? I got a not so good gut feeling about what he was trying to sell us. Was I wrong? My husband want us to get this policy... Please help:(
I would avoid using an IUL for the purposes of investing in Real Estate. If you would like to talk with Caleb's team, he can help give some guidance and at least give specific ideas on execution. Use this link:. Https://life180.andasset.com
I’m just getting into IUL sales just wrote my first 2- I am whole life gal for the last 20+ years. These products seem very complicated to explain the illustrations to clients and I’m not comfortable doing what I don’t understand. Thank you for clarifying this information for me.
You explain better then Doug Andrew
thanks for sharing your knowledge and experiences
What is best IUL or whole life?
The only way an IUL does not work is if you think you are going to put $100 bucks in it the whole time combined with the fact if the market stays flat and negative. If you start an IUL at about $200 and increase it on an every two or 3 years basis then you will be fine. To say that an IUL does not work is basically acting as if the market will be negative every year which will not happen.
My IUL policy has a floor of 0.75% and a cap of 15% and if you look at the past 20 years of the market, the average would’ve been around 8% given my floor and ceiling, therefore, this vastly out paces a whole life......all the while.....with my IUL I have the OPTION to choose a fixed interest rate which will yield almost the exact same numbers as guaranteed dividend paying whole life. So that means if u have the option to choose a fixed interest rate with an IUL that will yield very similar numbers to a whole life, then why not get an IUL? Cuz IULs are evolving and you have the option to choose the fixed interest rate at the beginning of the every year whereas with a whole life you don’t have the option to switch
The question is will the insurance company will keep the cap at 15%. How long have you had the policy? I believe the cap will be quite a bit lower in 10 years.
Victor Cuevas I am a licensed agent and I just talked to my carrier and they stated that their 15% cap will not be going down anytime soon. However, if their cap does go down...I always have the option to choose a fixed interest rate of currently 3.50%....so what’s the point of getting a whole life over an IUL if your argument is that IULs have market volatility? Because like I said before I can literally show you that I can choose a fixed interest rate on my IUL if I so choose...
3.50 percent won't help much after costs are subtracted, especially in the first 10 years. Way below what a good whole life policy pays. These policies are sold by most agents at high illustrated rates. So once the cap is dropped 2 or 3 percent, the whole thing starts to go south. If the illustrated rate is 9 percent, or 8, the agent should also run at 5.5 or 6 percent tops and show the client. Even at 5.5 it can look decent. That way there is some breathing room. I want IULs to work. And if the insurance companies can guarantee a cap to within 2 percentage points, you'd have a super product. Won't happen. I'm looking at them again because some improvements have been made. I wrote a ton of IULs pre 2009. Designed them perfectly. But when you start at a 15% cap and end up 8 or 9 years later with a 6% cap, not much you can do. The policy is devasted in those first critical 10 years. Not to mention when the insurance company starts asking for more premium. If you have a 15 year surrender period, the client gets hammered in a 1035 exchange or upon surrender. That's why I graduated from the Infinite Banking Institute in 2013 and started writing whole life. I've found a couple IULs that could work, but I see that IULs are still being sold as they were 15, 20 years ago...as if nothing negative will happen and everything in the policy stays the same forever. The risk still lies on the client with no real guarantees. Like I said, I'd like to see them work out, but as an advisor licensed for 25 years writing terms, ULs, IULs, and whole life, I speak from long term experience. Most agents writing IUL don't have much experience writing them. And those who are designing them right don't have many policies on the books for more than 4 or 5 years. I got into IULs 15 years ago after attending boot camps with experts and learning to do these the right way. But after the interest rates dropped to practically zero, the caps started dropping like crazy. And interest rates are still low and will stay there for a long time due to this economic downturn due to Covid 19. The third major downturn in the economy in 20 years.
What I want to always see on the IUL policies is how the GUARANTEED column of the illustration looks. If it breaks down, then the insured should go whole life. All IUL agents like to dismiss the guaranteed column like, "that'll never happen". IUL in general is around 30 years old....so there isn't really enough history to know. And look at all the things happening in the world that "have never happened before". Take the guarantees of whole life and take the risk when you deem it appropriate through policy loans.
@@LIFE180can you please explain to me how the guarantee column works? What is it illustrating? A 0% return alway? Or what is it exactly.
My understanding on the guarantee is that if let’s say you have the money on a 401k and the market performs bad 10 years in a row most likely you’ll have $0 left correct? O. An IUL yea the policy will lapse but you’ll have money so I still don’t get how that’s a bad thing.
You just like WL and got married to it that’s all but bashing on IULs when you know they are far more powerful than “other type of investments/savings” seems unbiased.
Might as well put the money in a savings account then cause the way you bash on IULs makes it look like anything is better.
Maybe WL is better for IBC but still think the concept can be used with an IUL.
I talke with Dominic Rahun; he sounded as if I was too old to start now. have anybody who can help me?
I appreciate this video, I just subscribed to your channel!
Great to have you here!
How about you try to do a video with Doug Andrew on Whole Life is the way to go and of course he would be on the IUL side. I am a licensed agent and have studied IUL in and out and even own one myself. Also watching Doug’s videos here on RUclips I’m pretty convinced that if structured properly and funded properly an IUL will perform nicely.
Would be happy to do a video like that with Doug. Agents can think what they want and say what they want. The dangerous part of IUL’s is they are sexy. They have some interesting features that make them fun to talk about and sell. They illustrate very well. The problem for me is that I have had far too many conversations with the people who ACTUALLY DESIGN AND CREATE the product. When you know why the insurance companies are going towards IUL (hint: it’s not for the benefit of the client), you realize that if you are looking to buy WL or IUL, I will stick with the WL.
@@LIFE180 maybe you should do a video showing possibly an illustration with the detailed print included showing why the IUL is designed to put the company at no risk and transfer it to the client. If that video already exist point me to it. But at this point I can’t see how the risk is on the client especially with the FIFO feature on the back end.
@@TheOpinionSports that"s the problem with WL's, their illustration is very restrictive when it comes to cost.
Dude, be careful here.Doug Andrew and his sons have some serious ethical problems. They have repeatedly used IULs inappropriately. Doug Andrew is a con man.
I have a completely unrelated question. I had a LI agent tell me I HAD to give my bank account info in order to apply for coverage on an IUL. I have never had to do this when purchasing a term product but was looking at an iul or wl product. I would rather see what health rating I get and what premium would be before providing that info. Just seems a little backwards to me. Any feedback would be appreciated!!
You should only need to give your bank account information when applying if you are looking to bind coverage at the same time. That is a little trick agents use to get you to commit to the policy, typically. Maybe they were just new to the biz and were trained to do it that way...? But it certainly shouldn’t be required to apply and get a rating.
That agent is not very well trained. From what I have heard, agents would run a more general analysis on your income vs expenses plus generally how much money you have saved before continuing to sell insurance. If that agent has not run that analysis, run away to a new agent.
When would be a good situation to use an IUL?
If you understand the risks in IUL and the actual math behind the actuarial science then you realize they are not really designed to out perform whole life long term. Check out this video: ruclips.net/video/zHUsh82zYA0/видео.html. I go through the history of IUL regulations to STOP IUL companies from being able to illustrate at the irresponsible rates they do....yet they keep maneuvering and creating different riders that don't really get the policy to perform better long term...they just get the policy to look better on paper to sell better. This is why there are so many class action lawsuits on IUL companies. That said, IF you understand all this and want to take all the risk in IUL for a potential 0.5% better long term IRR than whole life, have at it.
AG 49-B is coming and it will turn the IUL market on its head.
Yearly renewable term? This guy must have moved over to the whole life side a long time ago. IULs are improving every day
IUL's still have life insurance companies with the ability to increase fees and costs in the policy. Let me ask you a question, in the long term low interest rate environment we are inevitably entering, where do you think these companies are going to turn to get the money they need? It won't be the whole life policies because they can't. IUL's will support the Whole Life contracts.
So much noise about IUL, thanks for sharing your insight.
As a relatively new agent in this business, how would you go about selling IULs to clients. What key things would you mention to them so that they are much more understanding of this concept and know the risks involved with it.
Brian, I would say that it is all expectation management. Illustrate at a 5.5% assumption and set it up for min death benefit and Max cash value.
If you show them those set of assumptions and the policy still works for them, I think you are safe. However, fundamentally, I still disagree with the idea of using insurance "as the investment", which most IUL companies are essentially doing.
@@LIFE180 thanks for that! Also, if not using it as an investment how would you go about using it? As in what purpose would it serve to the client to use it as? Once again thanks for all of this info!
@@brianwest6752 I have created a lot of content on this specific topic because it's one of the most misunderstood elements of life insurance. Your policy itself is a storage vehicle. Read the book The AND Asset by Caleb (who I filmed this video with). And watch some of our other content. It's stuff that every new person to the industry should understand. Feel free if you have questions as you go through the other videos. I will respond in comments.
@@LIFE180 thanks so much for this.
LIFE180 why are you against IUL as an investment? You can’t lose, but you can get a max return of 10% base on an index of the S&P 500. The stock market has averaged an 8% return over the last several decades with the risk of losing 40% in some years! An great investment should be liquid, safe, tax advantaged, and have a good predictable rate of return. My IUL has all of those things, plus if I get disabled or get chronically sick, then I can use the death benefit while I’m alive to take care of my medical and living expenses! What other investment do you know of that can do all of those things simultaneously?
Said it before, and am saying it again, as soon as people can quit trying to get a life insurance product to compete favorably with true investment products, the simpler life will be for everybody. Think about it; you ain't gonna win a Kentucky Derby with a Clydesdale!
I have heard numerous times agents say cash value policies are not an investment. Can you clarify the criteria used to define something as an investment or not an investment? You are talking about IRR and risk. Arent they both metrics used to define an investment?
An investment is defined by risk. Whole life insurance, if used and designed properly is guaranteed and is a banking or savings alternative- not an investment. Because you can't lose your money. Investments carry with them risk, and thus the possibility of losing money. Never invest in life insurance. Use it as a banking alternative and you can create amazing leverage to create a hedge to reduce the risks in other investments.
Well number one iul is not as risky as they make it seem because as you're getting older you're supposed to switch from option b to option a at which point you start to self ensure yourself and the term insurance inside an iul although the cost per thousand goes up it actually becomes decreasing term so you're buying less units of insurance every year you build more cash number two you failed to mention that iul's also hold the same provision found in whole Life policies which is the fixed interest rate account which credits you 3 - 5% so if you always wanted something safer due to fear that the markets will not perform you always have the same fixed account option available
I will respectfully disagree with this statement. In theory, what you are saying is correct, but at the end of the day, you are taking on unnecessary risk when comparing to a whole life policy.
The major risk is the fact that contractually, the insurance company has the ability to alter the terms of the contract in a major way. That is not possible with whole life. IUL has been great the past 10 years in the largest bull market in stock history. But that's the only reason it has been so popular. Wait to see the next decade. It won't be nearly the same.
@@LIFE180 yes but you're also talking in theory no one can say with certainty how the markets going to perform the next 20 years whether you're talking about the domestic markets or international markets and like I said before are you all also carry the fixed interest account and the only way an Ensure can jack up the rates is if they're becoming insolvent because they would have to file with the state commissioner and show proof of adverse mortality they cannot just change the rates overnight if they wanted to plus mutual insurance companies already profit a lot from the high cost of a whole life policy and the high interest rates that are typically associated with these accounts this is how insurers manage to stay afloat and continue to pay dividends during the great depression and the last great recession we had in the 2000s
@@429mas That is actually not true. Contractually, the life insurance company can increase insurance and admin costs any time...it is built right into an IUL contract.
Conversely, we simply have a difference in philosophy. You are claiming that IUL's are a great investment tool. I am stating that if you are ever using an insurance product as an investment vehicle, you're looking at it wrong. Insurance companies are not good with investing or growth. They are great with guarantees and security. That's why I like whole life. The guarantees are FAR SUPERIOR. Then you can access your money to invest in actual investment opportunities when they present themselves (like cash flow Real Estate, Business, AirBnB, Flipping houses, Turo, Outdoorsy, etc...).
@@LIFE180 I don't view cash value strategies as Investments I view them as assets and yes guarantees are nice to have but they're also expensive while taking on a bit more risk becomes more cost-effective there are no deals with insurance plus most of the people buying whole life for the IBC concept are not successful entrepreneurs or Real Estate Investors
@@429mas I have no idea where you are coming up with the statement that most IBC users are not real estate investors or entrepreneurs....🤔. If they aren't currently, they need to be. If not, IULs or whole life won't be good for them because if you're simply relying on policy performance, you'll be very disappointed. The real power comes from the leverage the policies give you. Period. But for that to work, you need to fit it into a strategy.
Having watched the video and after reading several comments, I’ve concluded that the only thing that is guaranteed is that people don’t listen very well.
HAHAHA, well said. I am baffled daily by the responses I have to make. But I have committed to trying to respond to EVERY comment. And so it goes....lol
I like having IUL because I can strategically use it in different ways than a Whole Life policy. But I will say that I think Whole Life has a better risk-adjusted return, and is better for the general public because of its simpler design and more secure policy longevity.
Curious to hear how you can use an IUL in different ways than whole life?
@@LIFE180 Thanks for asking!
****Nothing I say below is an endorsement of IUL over Whole Life.****
When the stock market (S&P 500) drops, I can allocate IUL funds to the uncapped strategy (with spread percentage that you must overcome). This does, however, require some tedious wrangling with policy forms and/or dealing with customer service reps who often don't fully understand the policy mechanics themselves.
There's also the risk that the spread deduction will leave you with less interest crediting than compared to the capped account. But the gains in the uncapped can be large---albeit erratic over time---such as when the market dips, say, 15-20% or more.
In a down market, I can also use short-term arbitrage loans from the IUL to buy index funds through my brokerage (preferably in a non-taxable account). With my particular insurance company's policy, I can earn up to a +4.75% spread on a one year point-to-point indexed loan segment---plus the gain from the brokerage index funds themselves. It's a way to get some extra juice when the stock market bounces back. (But I certainly wouldn't count on getting indefinite positive arbitrage in retirement, as shown in many illustrations.)
Again, there's the risk that the loan spread might be negative---which could cost me net interest if the market does not bounce back sufficiently. I could certainly use a wash loan, but in a down market the probability of making positive arbitrage on the loan is pretty good.
Nevertheless, over time I've come to the opinion that these complex intricacies of IUL may actually make the policy **less** attractive since there are more moving parts and more policy micro-management required. It can be a pain---especially if someone is unfamiliar with the process. But if you maximum fund the policy and don't mind going in the weeds a bit, you can use the niche features to your advantage and give your wealth building a little extra boost.
Or you could just simplify and do it all with Whole Life. As I commented before, I do think that the risk-adjusted return on Whole Life is better when compared to IUL. When you factor in the additional return risk of an IUL---combined with its greater need for active management---I have come to the conclusion that Whole Life is a better proposition for the average person looking for a safe place to store their wealth over the long term.
But while I have my IUL, I will work it as hard as I can. :)
Cheers!
@Max Passion Hey Max. Fortunately my loan rate is fixed in my IUL, so I do have some safeguard there. I am, however, hoping to convert a term policy of mine to Whole Life in the near future. A fixed loan rate there would be wonderful, too!
Why do you keep saying UL instead of IUL? I can't tell if you two are even talking about the same product
I just listened again and don't hear UL anywhere....it is IUL the entire time.... Maybe I speak fast (which I sometimes do) and it was hard to hear?
what is the title of your book
jam Master Caleb’s book is www.AndAsset.com. If you would like to get a free copy and talk to someone on his team, visit life180.andasset.com
So what is the best insurance to buy? Whole life or IUL?
I am a big fan of whole life because of the guarantees. Plus if you structure it properly, you still keep much of the flexibility people like in an IUL policy. The biggest difference between the two are the guarantees. Since I view a properly structured life insurance policy as a storage vehicle (not an investment), I like whole life. I think you should be cautious of anyone selling you as IUL being a great "investment". I have lots of videos on this concept you can check out.
Let me know if that makes sense or if you have other questions.
LIFE180: Leading Into Financial Excellence
How can I transfer cash value from IUL to whole life?
tracy lieu I would just call Caleb’s team if I were you. I am not sure what your current situation is, but if it can be done, he can help you figure it out. Go to life180.andasset.com and you can set up a conversation with him and get a copy of his book for free so you learn more about the strategy.
IUL for sure. We have lots ppl with 10 yrs projection and its 99% correct.
@@haidao5060 It is easy to make a statement like that... Also, it is easy to make that happen during the longest bull run in the stock markets history.
How much do a person need
Depends on what you want to do with the policy. I am happy to have a conversation with you to see if this makes sense for you and give you some clarity on how it might fit into your life personally.
@@LIFE180 send me contact
This video is just talking about fears as the IUL is a monster and WL is the only thing that works. Don’t let your fears to influence others
Fears as the IUL? I am talking facts on how insurance companies handle the IUL'S and how they never perform as sold. Prove me wrong.
Hey what's up man just ran across your channel today, just subscribed. So in your opinion who is the ideal client for an IUL or is Whole life always a better fitted product? There's never a product which is BETTER right? More so situational on our client's end goal? Thought's on this? Also what do i need to do to get a free book? :)
Hey Darren,
thanks for the note. Here is how I break it down. I would never say one is better than the other (Whole Life vs IUL) as an all encompassing statement. However, I will say that for how I use it and how I coach entrepreneurs to use it, whole life is the better product. If you are someone who wants a little more upside and is ok with a bit more risk, then an IUL works. To me, it doesn't make sense to go that route most of the time...
To get a free book? Shoot me an email at Chris@LIFE180.com with your address and I will make sure Caleb's team shoots you one.
@@LIFE180 are you still sending those books?
@@templar3221 books shipping every day
I heard you mention Don Blanton. I'm reading his Personal Economic Model book and it's quite good so far. It doesn't seem to get into products until maybe the last chapter, which I haven't read. Have you read the book? Is he more of an IUL guy?
Don is much more of a WL guy. He has adjusted his software to allow for IUL'S, but I know he prefers whole life based on personal conversations with him.
@@LIFE180 I see. Is he someone you respect in the industry or are there others you'd rather learn from? I just heard someone else mention him and bought one of his books. His Personal Economic Model book is good so far, but probably not as easy an introduction to WL/IB as The And Asset.
@@johnp7739 I never really got into his PEM much. Don't get me wrong, It's right on the money, but I have other ways I like to talk about how money works. I know a lot of people who use the PEM with a lot of success. Don in general is someone I have immense respect for in the industry.
Have you ever looked into MPI (Maximum Premium Indexing)? It allows you to leverage the cash value to increase dividends. So you to grow money exponentially, 0% floor with 11-12% cap based off S&P 500. Any opinion?
I am not extremely knowledgeable in this product yet. I will research. My gut is that all new product designs by insurance companies are designed to offset the risk to the insured, so that's a negative. Not sure if that's the case with this? Remember that with all indexed life, the 0% floor is never a pure floor because you always have insurance costs. That needs to be taken into account.
Do you know any specific companies that offer this MPI?
SunCor Financial locates in AZ. Spoke to Dan Thompson and he is in support even though he has always been in support of whole life instead of IULs. It’s structured different where they leverage the money in the policy to compound the dividends. Look into it, it appears that it could be revolutionary in the invest/life insurance space.
@@LIFE180 actually there are companies who offer zero fees for years which didn't gain and had a 0%floor
@@CdotForbes13 great info. I'll be looking into this
I have never heard of that phrase before, but Maximum Premium Indexing sounds like a marketing phrase for what is Indexed universal life. 0% floor with caps tied to S&P. If the market is negative you are protected at ZERO, but if they are above 12, you are capped at 12%. Anywhere in between 0-12 you would get that number. That's how they market all IUL. And if you are young and in a good economy, it works. But the problem is as you get older and when you have several negative years back to back. The 0% floor does not account for internal fees, so there will be a negative impact on the account (especially early in the contract or if you are 60+).
My IUL policy has a coverage lock and a price lock....my cost of insurance DOES NOT change. What are you saying? I can literally show you my policy and my cost of insurance will never change
Matt, send your policy. Not only does your cost of insurance change, the ability for the insurance company to increase your fees and costs is built into the contract.
Great unbiased video.
You guys are nice and seem to have good intentions......but.....I chose to watch this video for an explaination of what the title of this video is about ( IUL vs WL which is better? )....with details and examples....and you did none of that. Just rambling on and on about how bad IUL is and your personal stories and experiences from the past ( and promoting your book ). Very disappointing based on the title of this video.
Sorry man. This is probably more what you're looking for:
ruclips.net/video/zHUsh82zYA0/видео.html
Another thing critics say is unless you get 6% every year an IUL does not work, the illustration basically shows an average. Because an IUL has a guaranteed floor on 0% let's say out of a 16 year period half of those years you had a gain of 12% and the other half you got 0%, well that's the same as getting 6% every year. At the end of the day someone has to increase their contributions over time and if you do not that's why they don't work. I know you aren't comparing to a 401k but a 401k is designed to increase contributions over time as well.
I have a IUL policy and I had it for almost 5 years now. I didn’t know much about it so I was just putting $100 every month but since I learn about the benefits of whole life and IUL I started putting $500 every month. Should I stay on IUL or terminate it and start a whole life policy?
I don't see the link for agents, can you post that?
What kind of link for agents are you looking for? We are working on an agent training platform because we are seeing such a need and desire. Is this something you are interested in?
Yes I would be interested in an agent training site!
@@LIFE180 How can I get on that list to be on an agent training platform? I could use some training:)
So you aren't licensed anymore?
Caleb is, I am not. I love it and use the strategy for my business, but I do not sell personally anymore. If you need anything, you can reach out to Caleb using this link: www.BetterWealth.com/LIFE180
Great! I'm an agent and I love Whole Life
Awesome!
All you both did was knock the iul. Why ypu not mention the law of diminishing needs? What about the cost of insurance decreasing as your income grows. You also stop paying at the age you have request.
Law of diminishing needs? If that's the case, why do the richest people in the world have the most insurance? 🤔
Law of diminishing needs is a broke person's mindset.
How does cost of insurance decrease as your income grows?
Also, just because you can stop paying at the age you request in an IUL, doesn't mean the policy is paid up and won't lapse.
@@LIFE180 so you built them for years. Your video title was the difference between IUL & whole life correct? Why did you not compare the fees in a whole life vs a IUL? I like whole life for the instant cash accumulation. Why do you prefer it vs IUL?
@@joegutierrez5430 I've got a playlist with over 50 videos on it explaining all that and answering all your questions.
My IUL was initially presented to me as a supplemental retirement.
Right, that's a pretty common sales pitch. AND, it is fine if they do that. HOWEVER, expectation management on how much supplementation is key. The assumptions on illustrations are horrible most of the time. It will normally produce about 20-30% the amount of income in best case scenario compared to what they illustrate it at....
interesting video - the music is really distracting i must say... would rather focus on what you're dicussing!
Yep. Agreed. I have since gotten my editor to not add music.
Be honest guys, and tell the world that,whether you guys have bout any kind of insurance?
Is this a serious question? Of course. I'm not an agent. I can't sell you anything. These are strategies that are great for entrepreneurs and Real estate investors. Don't compare it to investments, compare it to a bank account. The investment should be the real estate. Not the policy.
Can you please answer the following questions.
1. Can you provide details how dividend is calculated on the policy
2. Does the cash value go to my family if i die ----level contract cash value never belongs to the client ----company
3. Do you provide the year by year ledger on the policy cost
4. What is the loan rate i will pay if i borrow the money---- is it a fixed rate or a variable rate.
I had a whole life policy but after doing a thorough research i am hands down with IUL any day because i was able to calculate the IRR ont he policy against the whole life. Please provide apple to apple comparison. Whole life policy is also not bad but its like being in a flip phone policy..... financial industry has really changed and people should do their own research before making any decision but understand how the product actually works.
I understand what you are saying. The answer about a ledger on the breakdown of the costs in a WL policy is, "not really". But here is my mindset on that. I don't care about the fees breakdown. I only care about actual performance. And the performance of a whole life policy (after fees) is way better (if structured properly) thank people give it credit for.
Loan rate should be fixed, but it can vary by company.
Just like the IUL, the death benefit is what your family will get. If structured properly, the death benefit will increase as the cash value increases.
Dividend is created by the over all performance of the general account of the insurance company. When you buy a policy with a mutual company, you are the equivalent to a shareholder of publicly traded company. Your money is stored in their general account and then you are paid accordingly.
The comment on the flip phone is a good one. Pretty funny. And I can see why on the surface you would think that. However, I would equate it to saying that what if a flip phone was simpler, but your new smart phone was more prone to getting a virus...and if it got one, you would lose everything you put into it???🤔🤔
Listen, I get on paper that IUL's are sexier. I would never deny that. However, after spending several years with real conversations with people who were really hurt by those policies it made me start digging.
At the end of the day, let me ask you this...
Does it make sense that a life insurance company would create a product that:
1. Pays higher commissions to the agent (40%+ more in many cases)
2. Offers higher upside to the client
3. Offers no more downside to the client
4. And still keeps all the risk?
It doesn't make any sense. That's how IUL's are sold....that's not how they work. I spoke to an actuary who was involved in product design for IUL's and they flat out told me that IUL'S are designed to shift the risk from the insurance company to the insured. Period.
For the purpose of the use I coach entrepreneurs to leverage the policy....I believe it is a big mistake. And for those who say they are okay with that risk...I say buy term, save a minimum of 1 year of income in liquid location, then start investing in an S&P 500 index.
I paid for the book around 2 months ago but still waiting for it.
email Chris @ LIFE180.com and I will follow up with Caleb's team with you and connect you to them if you haven't received it yet.
2 months is pretty bad service. smh
@@KieranTong Guess what? I still didn’t get it
Most professional estate planners use whole life for wealthy clients.
That would change if they understand how IUL worked.
@@ronrutjr Most do know what it is, but they do not see life insurance as an investment. Most wealthy clients are looking for a safe haven to park money, not invested in life insurance. Most BOLI ( bank own life insurance) buy whole life. I've never seen a corporation buy and IUL for a key person insurance. As my mentor told me "don't do what banks tells you, but do what the banks does."
Music is so distracting. It’s very hard to concentrate
Yes, music is annoying
Music on the background is very distracting
Working on the fix. It didn't seem bad on my end when I listed after my editor edited it... All future content will be better. Thanks for the heads up!
Don’t choose increasing face amount, it will make your policy so expensive when you get old
True. You can also change from increasing to level when you stop funding the policy or when you get older. Depends on objectives.
Fees in a UL contract go down as you increase cash value the problem with whole life is that it's the most expensive form of life insurance to begin with due to guarantees and the irr only grows at 4% a year and you can never have both the CV and db in WL and the loan charge is usually greater than what your earning in the policy
Mario, you can talk Circles on those topics, but the bottom line is the fees inside of IUL go up more with age. You can do WL with a non-direct recognition company easy. Plus, if you take a loan in an IUL, it's either a wash loan or you're taking risk because the policy could get zero...then when you add in fees it is horrible. Especially for older people who are using it for retirement.
The bottom line is that no insurance policy should be considered an investment. It's a storage vehicle to give you leverage. WL is the most guaranteed product. Insurance companies offset the risk to the insured with IULs.
@@LIFE180 Fees inside the IUL policy Decrease over time as the net amount of risk goes down But the COI goes up Until you eventually hit corridor When you take a look at the market we typically Have 4 to 5 years of 0 In a 20 year period So the chances of Positive arbitrage Are good and if you always wanted something Safer you have the fixed loan option
@@LIFE180 IUL premiums are fixed for life once approved through underwriting. If a parent gets an iul for a newborn the premium will be rated as a newborn for life. Unless the owner of the policy allows it to laps by not paying premiums. Also comes with an income rider, guaranteeing tax free retirement for life, or until 120 years old whichever comes first. All of this while still maintaining a hefty death benefit due to structuring it to increase to avoid a MEC
@@Simonsaysboxing The health rating is guaranteed. The cost of insurance and internal expenses go up. You can do guaranteed lifetime income riders with some companies (not all), but when you do that, it cuts down on potential (as the insurance company triggers the rider and guarantees income based on account status at the time of trigger). Rarely will it look like the illustrations shows 20 years later though when you go to trigger the income.
Risk lol, you've used that word 100 times to describe an iul
Because it is sold like it has no risk...
I think is dumb when people discuss what’s better and what’s not. I think IUL is a great product and I also think WL is great. But Is like saying Apple is very than Android or biased.
Everything has there pros and cons but is up to the agents to structured correctly for their clients. Regardless of that, good video
I think my problem with IUL is more around the nature of how people sell it. It's very dangerous. It isn't bad...it's just isn't all people make it out to be...
I am mid way through this video and i understand what your saying so far. Right now I am pursuing both but i am currently analyzing a illustration of a IUL based on what I want my policy to look like.Honestly i think what really matters is structuring your policy they way you would want it to actually be and understanding your policy 100% before you sign because a illustration is not the policy and the illustration should tell you that.READ AND UNDERSTAND IT COMPLETELY! ASK TO PUT IN LAYMAN'S TERMS. So i understand that some key things may not be on the actual IUL policy vs. the illustration. I think if you understand a IUL than you understand the risk already b/c to my knowledge its base off the performance of a IUL. I am still learning but I just wanted to speak on that.
correction: base off of the performance of the stock market
The part your missing is the terms of the contract in an IUL. The insurance company has the legal right and ability to change the internal costs of your policy every year. That's why the guaranteed column is there, to account for the increased costs, along with reduced performance in the market. The insurance company can not change costs in a WL policy
Enough talking.. show me some numbers.
The numbers are in this video: ruclips.net/video/dxIXcJNlAVI/видео.html
"My risk tolerance is EXTREMELY HIGH" -Two guys that only trust the product with the most guarantees lol
You don't get it if that's your statement. My risk tolerance is extremely high. I invest in real estate, businesses, cryptocurrency, and plenty of other opportunities that I don't get into. A properly structured whole life policy is just the best way to do it. Just because I have a high risk tolerance doesn't mean I need to trust the over valued stock market or invest in over priced assets like mutual funds.
@@LIFE180 14:25 "1) Most people are being sold a bill of goods that they don't understand" Yet WL fees aren't shown and the actual rates of return are almost always lower than illustrated? "2) It's not going to give them the result that they want" yet as you say, people buy IUL for investment purposes, and if funded correctly they'll end up with much more money that WL. Also, with wash loans available instead of the high loan fees on WL, they'll be able to access it without fees that are often equal or higher than their "Guaranteed" return. "3) They're taking on a lot more risk than they should, especially when there are better opportunities out there.," Now you're telling clients what their risk tolerance should be, and inserting your preference for more guarantees on what's "best for them?"
I respect WL, but it's not a better product for someone who's leaning more toward cash accumulation.
@@only1dliv It seems our disagreement is philosophical. Responses to your statements numbered to match:
1) There is a lot of talk about whole life fees. Honestly, that argument is misguided. At the end of the day, who cares about fees. Compare apples to apples. What other guaranteed products will give you what a WL policy will give you? I compare it to a bank account. Keep your money there and there are less fees, but you also wind up with less money. PLUS - I would only buy a whole life policy based on the guaranteed column. You are missing the fact that I only suggest having a WL policy as a bank account on steroids. That's it. Focus on guarantees in the insurance product and get your returns and take your risk elsewhere. Want to invest in stocks, go for it. Real estate, even better. Have a business you want to launch or invest in? Fantastic. Want to become a hard money lender, this is a phenomenal way to do it.
2) People are sold IUL's for investment purposes. Your statement, "if funded correctly they'll end up with much more money that WL", is incorrect. It should say, "has the chance to end up with much more money". Because they are not guaranteed. Sure, they have done great over the past decade....no doubt..... But there is a reason insurance companies pay a much higher rate of commission for IUL's than WL. They can afford to because there is less risk to the insurance company. I don't know about you, but I think the next 10 years won't see the type of success as the past 10 years. Plus, the policy is 100% exposed to the will and fee changes of the insurance company as they get older. I personally don't have enough confidence in any company over the next 20-30 years to not change a contract when they are legally able to that won't benefit them and hurt me. WL GUARANTEES this can't happen to you.
3) All Caleb is saying is that if you have a higher risk tolerance, don't put it in an IUL. It's an insurance contract...not an investment. I could not care less what someones risk tolerance is. If it is high, WL is still a better option because I can still have a system that will create a greater return than having that money sit inside of an IUL. If it is low, the WL policy guarantees will DESTROY the IUL's.
For someone who is looking for cash accumulation, I don't think they should be looking to an insurance product to create accumulation... If you are selling people on that, well, that's too bad. I coach entrepreneurs to create a system using WL to purchase Real Estate or build their business to invest for cash flow. The accumulation mindset of investing will be dead within a decade. You can use our strategy to take calculated risk (watch my LIFE180 Pyramid video), consistently increase your cash flow (passive income), and then flip the switch and create tax free income during retirement with the policy if you want.
LIFE180 1. How can it be misguided when the returns aren’t as illustrated and the cost to access the money is often more than the guaranteed return? I respect using it as a bank account on steroids, but I don’t agree that one should over look IUL if they are looking for higher returns. The things one can do with IUL’s and their wash loans make it a great tool to use in coordination with other businesses/real estate, that other products have a hard time competing with. Also, many companies IUL’s have the option for guarantees that still illustrate to outperform WL policies.
2. I agree that it shouldn’t be primary, but it is definitely a strong tool. Many companies have actually consistently lowered their fees over the years, so the possibility of change isn’t something people should run from. Now, while “has the chance to end up with more” is correct, no one expects the market to completely tank for years on end or else everyone would stop buying stocks and we’d all be buying Put’s. If it did tank for 10yrs, and averaged say 4-5%, a properly funded IUL would still come out stronger than WL in the long run. If someone is looking for a tool to expand retirement and has an insurable need, I’d say trusting insurance companies with your money following the S&P is a safe bet overall. Plus, there’s a reason Buy/Sell’s are booming with IUL sales. More cash for those with an insurable need.
3. It’s just off putting to think things like hard money lending (which most don’t have the capital for), Bitcoin (which has no real product or dividend potential), or a 5-7% cap rate on real estate (which as we see now, again, can fail) are considered good, yet IUL’s aren’t seen as a good option? Just comes off as biased in my opinion.
@@only1dliv 1. The cost to access the money should never be higher than the guaranteed return. Where is that coming from? Maybe I am misunderstanding your statement...?
In summary for everything else (hard to be as detailed responding from my phone)... Once again, I simply philosophically disagree with using an insurance product and a vehicle for accumulation. And while the may be a chance an IUL will put perform WL, it's not guaranteed. Furthermore, there is a massive moral hazard in the way they are sold. More agents a going to IUL selling not because they are better, but because they can often make 50% higher commission rates. The nature of an IUL is the insurance company offsetting the risk it would take in a WL policy and putting it back on the insured... I worked with a major IUL provider (one of the largest), and I saw time and time again people having their contracts blow up in their face. Those are hard conversations to have with people who trusted an agent to do right by them. Then I had to go in and try to fix it and help them get back on track.
As for the real estate comment...if you buy RE the right way, it should never fail. People run into trouble with their finances because they take too much risk far too early with too little understanding of the consequences. I could not care less if our properties go down in value and I lose half my net worth. The cash flow is still there. They are not leveraged with a ton of debt. And I would say if your cap rate is 5-7% you're investing in the wrong markets...
Here is what I know, I was a top performing agent at a well known company. I got tired of it. They pressure you to sell proprietary products to earn credits to win awards and trips. That's the culture. All hidden behind the vail of helping people. Financial products are simply tools. You can't put your money anywhere these days and set it and forget it....I don't care if it is stocks, mutual funds, or and IUL. You need a more active strategy. You need to commit to your own future. You need to educate yourself. You need to invest in things that not only you understand, but that you can have a direct impact in the results. That's why I prefer whole life. If you align with the fundamental belief that the best investment you can ever make will be in yourself, WL is the way to go.
Guys, your generalized solution is not helpful. I talked with one of ur reps but he didn't offer solutions. Is there a solution 4 a 68 year old man?
Hey Ron,
It's hard to give specific advice on a RUclips video. If you would like to talk with someone who can let you see what it would look like to do this for yourself, set up an appointment to speak with Caleb's team at life180.andasset.com
I see in one of your replies, you say “yes! If you’re going to sell an IUL, it should be max funded with min death benefit but the problem is 99% of agents don’t do this.” But nowhere in the video do you say that. And it hurts us agents who actually do it. You say over and over in your video that you “want to be fair” but you don’t say anything about the IUL that can be positive in any way. They’re empty words. You say you don’t wanna say just bad things, you wanna be open and fair, but that’s it. You don’t back it up with any words after it. So you’re really not being fair.
I’ve been an agent for over 12 years. I always sell the IUL min db, max funded. I tell clients they need a minimum of 15 years for this to grow and be used properly. Otherwise I don’t sell it. I don’t sell it as children’s college funds as there won’t be enough time to accumulate. I illustrate at 5.5% and also tell clients it can be lower, it’s not an investment but it’s great to tier permanent and term life insurance because you need more insurance when your kids are younger. But it’s nice to still have $100-200k to pass as a legacy and pay off debts, funeral costs, etc. sometimes I even do it option B then switch to A in retirement to save them money. I’m very conservative. I even tell them not to do too much in the IUL because in order to maximum the benefits, you should always max fund it. So do only about $300/m here and the rest of your retirement with a match or a Roth product where the monthly is flexible unlike the IUL. And even when they ask if they can contribute more later, I say no because I’m minimizing DB so much that you will Mec it out if u do. So let’s be fair to agents like me who do the right thing.
Hey Crystal,
First, I love your passion for what you do. On the scale of IUL agents, you seem like one of the good ones. You're few and far between. I love how you have a 15 year time horizon and you try to set proper expectations.
I would say at this point (this video is a bit older) that it's worse now than it was then. Cap rates are reducing. Marketing cap rates will never hold long term. That's my issue with selling IUL.
The IUL expert I work with and trust is saying that his comfort level for illustration assumptions is in the 4-4.5% range. Could they perform better? Maybe. That's why he likes IUL...the potential of possibly being a bit better. But 5.5% would be absolute best case scenario....not what should be illustrated.
I've been getting feedback like this a lot lately. What I have come to realize is that there are many IUL agents like you who have amazing hearts and want to do right by the client. I used to be that guy selling IUL. Once I learned how they really work, I couldn't do it anymore.
Can you really explain how a company pays your IUL policy the indexing rates that it does? Do you really understand the fundamentals of the movement of the money in your policy, the general account of the insurance company, and how they purchase options? Do you understand the different moving parts in all of that which make IUL'S dangerous because it is IMPOSSIBLE for companies to keep cap rates above 6% long term?
I know this stuff because I was on the inside.
If you can write out the explanation on how this works, I'll be impressed. But I'll also be surprised that you're still selling them. I'm going to do a video on this topic to teach everyone what the life insurance companies really don't want you to know.
They always say they take a portion of your account and buy options...it's really not that simple... that's a fact. I hope you're subscribed so you get notified when this video comes out. I may even try to do it live today...
@@LIFE180 thank you for taking the time to reply to me. No, I can’t say that I can explain all that. With that being said, I think, again, that every product has pros and cons. If there was one perfect product with no risk, then all the others would become obsolete. Even putting your money in a “risk-free” product bears risk of hyperinflation deflating your money, and so forth. If you suggest like in your video that you shouldn’t invest in anything you don’t fully understand, then I’d venture to say that 90% of people would never invest in anything unless it’s super simple and risk free, but again those come at a cost of low returns. I’m not saying people shouldn’t do their due diligence and try to somewhat understand what they’re investing in, but if we had the time to thoroughly understand everything, then we wouldn’t need agents and advisors. And many people just don’t have the capacity to learn at that level.
I’m not sure that structuring a policy the way I do is riskier than stocks and mutual finds because I mitigate the risks as much as possible. And you can’t deny that some people do need or want permanent life insurance. And the question, why wouldn’t companies lower their caps to 6%? Because they have to stay competitive. If their fees go up and caps drastically go down, then no one would buy them. And I’m not sure how the return is at 4% on the cash value side (not the overall return including the fees) when the market has performed extremely well since 2008 (or 2018). And there are uncapped strategies. Check out Allianz’s uncapped Bloomberg and Pimco. They even let you lock in rates. You can set a floor of let’s say 10%, and once it hits 10%, lock it in for the rest of the year.
Another thing to consider is that with IULs (compared to mutual funds), you can borrow money at a fixed 5% rate and turn your cash into a stream of income while avoid paying income taxes which you otherwise would do on an annuity. Paying 5% while still being able to collect arbitrage on certain years vs paying income taxes sounds good to me. Your thoughts?
@@hcrystalh That's a lot to unpack. I would make a couple simple responses...
1. Regardless of it being more or less risk than the stock market or mutual funds, the fact that you can't explain how they function tells me you should not be selling them. Once you understand how they actually work, if you are still comfortable with the risk, then keep selling them...
2. Borrowing is not a fixed rate of 5%. There are variable options and fixed options. The fixed options create anywhere from a pure wash loan to a 1% net fee. Variable loans can change and if you take variable loans and they increase rates, it get's ugly fast. It's just gross because these are REAL risks, but they don't let you illustrate them....
3. People should 100% understand the risks they are taking and understand the moving parts of anything they invest in. Not that they have to actively manage it, but they need to know what the need to be concerned with.
What's dangerous about IUL's is people buy the hype of how they illustrate (agents and prospects). When 99% of agents can't explain how they actually work, that's a dangerous position for the industry.
SUMMARY - Agents NEED TO KNOW IN DEPTH how they work. Clients need to understand the basics. If not, it's not an ethical sale.... That's just my opinion in general, not an attack on you.
4. While you say every product has it's pros and cons, that's a lazy statement to me. You say you know this product has its cons, but you can't articulate them to me...yet you sell it anyway....? Think about that for a minute...
@@LIFE180 I understand what you’re saying and agree with you to an extent. But I think you feel this way towards iuls because you’ve been in the game. But if you’re going to hold this true for every salesman with every product, that’s just not realistic. Then 90% of salespeople out there are lazy. Car salesmen do not know 100% about every product they sell. Furniture salesmen do not know 100% the pros and cons of every material, the structure, the mechanisms, etc. Real estate agents, pharmaceutical sales reps, the list goes on and on. You’re saying that they need to know the basics, but what you’re talking about is not the basics. You even admitted it took you all these years of being in the industry to understand what you know now.
In an ideal world, every salesman would know the products they are selling inside and out, but to get to that point would be analysis paralysis. Even doctors don’t know everything. But we need them. I highly doubt every financial advisor selling securities knows them inside out. Even insurance agents don’t know whole life policies inside out, yet you’re ok with them selling them because YOU personally have done YOUR due diligence and believe it’s a good product. But not everyone will have the same opinion. I’m not saying that you can’t have your opinion. Of course you can. It’s your channel. And I’ll probably continue watching your content and learning from them. I just think if you’re going to be “fair” or make blanket statements, they should apply across the board and not just about whole life or against IULs.
If I know what you know, maybe you’re right and I would stop selling them. That’s not the part I’m arguing. So we don’t have to argue about that. Because I’m admitting you probably know more. But I just don’t think it’s fair to say certain statements if it’s not gonna apply appropriately to everything and everyone. Just seeing it from all angles.
@@LIFE180 I think also, IUL agents would be more apt to listen if you did go into greater depth and explained why IULs are “bad” compared to whole life policies. But really explain the mechanics and then allow us to formulate our own opinions, whether we agree with you and decide if we want to continue selling them. Instead of NOT explaining it in great detail and just saying IULs are bad and whole life is good and if you sell iuls, you are either a horrible person or ur lazy because u don’t know ur sh*t. That IS a personal attack. You know personally that in our industry, it’s really hard to be trained and find a good mentor. Few and far in between. So the ones who are more diligent watch videos like these on our own to try to learn, but I have yet to find one that really goes in depth and detail about them and one that’s honest, not trying to push sales. If you made a video like that, coming from a teaching standpoint with no hidden agenda, but also stayed neutral and said “hey, here’s the info. You decide.” Then maybe more of us agents would be more open minded. But there are far too many videos like these that attack the IUL without going into detail. So then it makes us wonder if the person making the videos really knows what they’re talking about or not. And then we’re back to square one.
I'd like to see a White Board Illustration.
The nature of an illustration is actual numbers with too many moving parts to illustrate on a white board. I could do a simpler explainer on a white board if that would help?
Unfortunately these two either are blatantly misleading you or the other option which is equally worse don’t understand life insurance. Great low cost infomercial.
Blatantly misleading? How so? Watch my playlist on IUL and you'll probably learn something 😉
This was a garbage lack of detail Convo
Try this one if you think that was garbage. This is exact problems with IUL bs going on with specific details
ruclips.net/video/zHUsh82zYA0/видео.html
Typical airheads who attempt to sway individuals with IUL’s. These two don’t understand finances at all.
@@samuelamezcua2105 so with that, you're telling me you're an IUL fan?
@@samuelamezcua2105 airheads? Lol. I know more about how IUL works in my pinky than you.
The one on the right is super brain washed by his mentor. Live for 40 years at least before giving this kind of advice. By the way IUL beats the returns on whole life by a whole lot. Wholelife you must pay premium until policy end, unless you have "paid up by age 60 type policy" (premiums alot higher), IUL pay up to level before becoming MEC ( modified endowment contract) and you can stop paying premium at age 60 for a policy starting at age 35. Ya your going to have some low years but some companies offer a small percentage say .25% while if you were in 401K your going down with the market.
John, that may be the most ignorant and uneducated comment I have seen regarding whole life insurance. None of that is true. IUL does have a bit more upside, sure. But only if you structure it perfectly, which most agents that focus on selling IULs don't because you have to take such a huge haircut on your commission.
Second, that person you are telling should live 40 years first has probably spent more time mastering this industry in his 5 years in the business than most people spend in 30-40 years.
"Super brain washed". I would say you are brain washed on IUL if these are your comments. Just sayin...
@@LIFE180 Agree IUL has to be structured correctly using option B.
@@geary2 that's a start...but simply using option B isn't enough. Funding levels have to be maximized right to the MEC limits.
@@LIFE180 read my 1st reply again thats what I said, also you don't dispute whole lifers pay premium until the end of policy which can be avoided with IUL.
@@geary2 Your wrong on that point too.