- Does IUL work?
In this series,
our goal is to give you some examples
and illustrations that will prove,
is IUL really worth it?
I'm Doug Andrew,
and this is my son Emron Andrew.
He's one of the top IUL specialists in America.
Also the co-author with me and my other son, Aaron,
of two books,
but the most recent best-selling book is "The LASER Fund."
And stay with us to the end of this episode,
I wanna gift you a free copy of that book
if you don't already have one.
But in this particular episode,
our goal is to show you examples of IUL policies.
And if you're not familiar with what IUL is,
that's index universal life.
When an index universal life contract
is structured correctly and funded properly,
it is deemed what I call a LASER fund.
LASER is an acronym that stands
for liquid asset safely earning returns.
So as a financial strategist
and retirement planning specialists now
for nearly five decades,
it's my preferred financial vehicle
that allows people to accumulate their money tax free
and then be able to access that money income tax free.
And when they finally die,
anything in there blossoms and transfers income tax free.
And so a lot of times when people hear about it,
they go, "Wow, this sounds too good to be true.
Could you show me an illustration
of actually how somebody has done this,
maybe 10 years down the road,
what actually has happened
instead of this hypothetical illustration?"
So we're about to show you an actual illustration
where Emron came across a client
that had an underperforming, actually non-performing,
whole life policy.
And he was able to do a tax-free 1035 exchange
from the cash value in the whole life policy
over into an indexed universal life policy.
You're gonna be blown away
with how this has far outperformed the illustration.
So get ready, Emron take it away.
Show them how well this has performed,
and then I'll come back in and make sure you get a free copy
of our most recent best-selling book, "The LASER Fund."
(gentle music)
- Well, I'm excited to be with you
and excited to be able to take you deeper
into the actual results of the IUL LASER fund.
And like my dad said,
this particular client that we're gonna go to look at here,
we actually put this policy in force
in the first quarter of 2009.
So you we're looking at about 13 years.
We're 13 years into this life insurance policy,
and so we wanna see the results.
And all I wanna do is I wanna start
by looking at the actual results.
We're gonna go where are we at today.
So as we look at it here,
we're gonna have a death benefit here
of about $300,000, okay?
So we've got a death benefit here right there
of 300,000, is where it's currently at.
That's the net death benefit
because this client has actually
already started accessing...
They've accessed some tax-free money out of this policy.
Down here, you can look at that.
We've got about 32,000.
So they've accessed a little over 32,000,
it's the current total balance on his policy loans
of what he has taken out of his insurance policy
or what that balance is at.
But if we look here, we've got 110,000.
So let me go here.
We've got $110,000 of current accumulation value.
So that is right here,
this $110,000 represents the account value
that he gets to earn interest on.
So whenever he gets credit interest...
And you can see over here, he's been averaging 12.88.
So when we're averaging 12.88%,
he's averaging 12.88 on the $110,000,
even though he's already taken out $32,000 of that money.
So that's one of the beautiful aspects of the IUL
is that I can keep on earning interest on my money
even after I've taken it out.
So I'll keep on earning interest on that full 110.
And like I said, we've been averaging a 12.88% on this
for the last 13 years.
Net that he has access to,
is that his surrender value down here,
which represents that $77,000.
So he has $77,000,
this is 13 years into the policy
and he originally funded this, again,
with a 1035 exchange of just under $50,000.
And you can see, we've got a good diversification in here.
He's had some money in the fixed account at times.
We don't have any in the fixed account right now.
Obviously, the loan account right here
has got $32,000 in it.
The one-year index account,
it has average 7.98%.
We don't have anything in that one right now,
but we've got some in the high cap, 77,000,
it's where most of most of the money is.
It's between the high cap and the loan account.
We've had money in the one-year no cap before as well.
And overall, again, that is what gives us
that 12.88% average.
So let's go ahead and take a look at
what the policy was projected.
So this is what we've done.
We've done and we're at 110, a net of 77,000.
Let's go back and look and see
what we had projected 13 years ago.
So if we look at this 13 years ago, and we pull into this,
we're gonna go in and we can see right here...
Where we look at, we've got the 1035
from the underperforming whole life policy right here
at again, $47,996.
Now, that whole life policy already had
an $11,000 loan sitting on it.
So not only was the whole life policy was underperforming,
but it was again dragged down because of this loan.
And he was paying more like 8% on this loan,
6 to 8% on the loan are only earning 4, 5%
on the net of $36,000 here.
So he was losing money due to this loan
rather than making money.
And over inside the IUL,
we're now transitioning over
to where he can either get a zero cost loan
or he can even get a participating loan
where he can make money on this.
So as we zoom in on this,
what we wanna see here as well
is looking at what the cash value was projected to be.
So if we go here, this is the accumulation value,
right here, okay.
So that's the projected accumulation value.
And I'm gonna go down to where we're supposed to be
right here in the year 13.
And we're also gonna look at the...
And we'll zoom in on that a little bit.
Okay, so on this accumulation value,
the year one, he puts the money in,
he'd have $34,000 over the years, so it was gonna grow.
It actually dipped down just a little bit,
and then it would jump back up with some interest here,
that was with some of the five year
interesting crediting strategies
that we have available inside of this particular IUL,
is that we can actually defer the interest
till the fifth year and then we can get a big bump,
so we go from 33,000 up to 45,000,
which we obviously took advantage of
and utilized inside this policy.
But as we continue to go through here...
And hey, you'd have another bump here in year 10.
$63,000 right here.
And he would have about $63,000 here in year 13,
even after his five-year bump,
if we scroll that up just a little bit,
he would have 94,000.
So even after he gets his five-year bump,
in another two years, he was projected to have 94,000.
Now, if you remember in this year right here,
we're already in this year and we have 110,000.
So we're obviously outperforming this.
I mean, we're outperforming this by 40, 50, almost $50,000,
but $47,000, we're ahead of schedule.
We're ahead of schedule, 47,000, not quite double,
but dang close to double,
outperforming this policy over here.
And my surrender value,
I'm even outperforming it with my surrender value.
My surrender value right here is projected at 77,000, okay?
So even with the loan being taken out here, even if I...
Over here, we would try to be paying back the loan
or have it existing right here.
But over here, I'd have $77,000
on this side of the ledger right here as well.
So we're outperforming it not only with 110,000,
but I'm also outperforming it
even with the net surrender value with a larger loan.
Again, my loan is up at 30 something thousand,
$32,000, because this client did take out
an additional $20,000
during these last 13 years.
They've needed it for whatever purposes that is
and they've been able to access that $20,000 tax free.
But this really shows the power
and the potential of a maximum funded IUL.
And we said that because again,
in order to get these results,
whenever you're looking at a strategy
that we talked about in the LASER fund,
you've gotta follow the strategy.
If you step outside of the strategy,
you may not see these kind of results.
But if you wanna have an opportunity
to see these kind of results,
you follow the strategy,
you follow it to the T,
and then you set yourself up to have the opportunity
to see these kind of results.
And this is a beautiful one right here,
to be able to get in and see an account,
where we go in and we were only expected to have 63,000,
we now have 110,000 with $77,000 net, averaging 12.88%.
Again, we were only projecting, back 13 years ago,
averaging between 8 to 9%, right?
We're looking at 7, 8, 9%,
we're outperforming that up at 12.88%,
making it a big difference for this client and his family
as they continue to work towards accumulating the money
and be able to access this
for supplemental retirement income needs
or any other needs that they stand in need of.
- Well, thank you, Emron.
If that didn't blow you away...
So let me understand,
this client had this underperforming whole life policy
that probably would've crashed and burned sooner than later.
- Absolutely, especially with them taking out more money.
If he was to continue to take out more loans, absolutely.
- So the net, after the loan balance
on the whole life policy,
was only 30 something thousand, correct?
- On the existing policy,
we have a current loan of 32,000.
- Correct, but the whole life policy had a loan on it,
so the net 1035 exchange, if you subtract the loan balance
- Yes. - it was only in the 30,000.
And then he goes and takes out another 20,000.
So really, the net that came over
from the whole life policy,
if you wanna look at it that way, is only about 12 grand
and he has 77,000 in here after subtracting
all of the old loan and the new loan, right?
- Yeah, so he would he would've transferred
a net of about 33,000, right?
About 30,000. - Right.
- Yes. - But then he took out
another $20,000 loan. - Correct.
- So I'm just saying, - Yes, yes, yes.
- as far as money in versus what he's pulled out,
he's only put in a net maybe of about 12 grand
and he's got 77,000 now net out of this policy
earning at 12.88%.
So this is another example where, whoa,
he's gotta be super grateful that he met you
and was able to perform far better with an IUL
over the whole life policy.
- Oh, absolutely.
We meet every year.
And I mean, we thank each other up and down.
He's one of my dear friends now.
And absolutely, him and his wife are more than thrilled
with the results they've been able to get
over the last 13 years.
- So if this is intriguing you,
I would recommend that you study this book,
"The LASER Fund."
It's flying off of our warehouse shelves.
To claim your free copy,
simply go to laserfund, L-A-S-E-R, fund.com
or click on the link below.
You contribute a nominal amount
towards the shipping and handling,
I'll cover the rest of that.
I'll pay for the book and fire out a hard copy to you.
It's 300 pages, charts, graphs, explanations on this side.
If you learn more by stories,
if you're a right brain learner,
you flip it over to this side
and there's 62 actual client stories
of how a properly structured IUL policy
can be a financial Swiss Army knife.
You can use it for all kinds of financial goals
as a dream solution.
So this is about you and your brighter future,
claim your free copy.
And while you're in there,
there's options there to listen and learn, watch and learn.
You can even set up a time to talk to an IUL specialist
to see illustrations of how this can perform
in your particular set of circumstances.
(gentle music)