- Does IUL work?
Welcome, I'm Doug Andrew.
This is my son, Aaron Andrew.
He's one of the top IUL specialists in America.
If you've watched very many of my educational episodes
on "3 Dimensional Wealth,"
you will understand that
one of my favorite financial instruments, bar-none,
is a max-funded indexed universal life insurance policy,
but it must be structured correctly
and funded properly to perform as illustrated,
and so oftentimes when people come to us,
they want to optimize their assets, minimize taxes,
and be able to prepare for a comfortable retirement
or some other long-term financial goal,
and so when they understand
that a properly structured,
maximum funded index universal life policy
can accommodate money to accumulate it tax free,
then be able to access that money,
totally income tax free, somewhere down the road,
and then when they ultimately die,
whatever's left behind usually blossoms
and transfers income tax free
is done under three sections
of the Internal Revenue Code,
Section 72(e), 7702, and 101 (a).
So we usually then show them an illustration,
repositioning assets that they want to set aside
over a certain time period,
and so an illustration is created.
What if you were to fund this in five years or 10 years,
and then, at some point in time,
start taking out tax free income?
And so sometimes people will say,
"Well, come on, this sounds too good to be true.
"Do you have some illustrations
"of actual clients who have achieved
"what you're illustrating here?"
And of course we have other financial advisors,
naysayers that say, "Well, I've never seen
"any of these policies perform as illustrated."
So the purpose of this series is
to show you numerous examples
of how clients have actually outperformed the illustration.
(upbeat music)
So we have a CPA,
very conservative and very detailed,
that you met, what in 2000...
- 2009. - 2009.
So as of the recording of this episode in 2022,
it's been about what, 13 years?
- Yep, we're in...
Yeah, the 12th year's when we're gonna show,
but we're about to get into the 13th year now.
Yeah. - So Aaron is gonna show you
what the performance has been,
what was illustrated,
and how it's actually outperformed,
what was illustrated,
and then I'm gonna come back on,
because I want you to study
how you can apply these strategies
in your particular set of circumstances,
and I wanna gift you a copy of
our most recent 300 page best-selling book
called "the Laser Fund: How to Diversify
"and Create the Foundation for a Tax-Free Retirement,"
like you're gonna see this client has done.
So take it away, Aaron.
- Okay, well, let's take a look at these clients.
This is a CPA, and of course CPAs are well known to,
you know, people put 'em on a pedestal that they know all,
and not all CPAs understand this,
but this CPA does.
So this CPA came to me
and he had read one of our books
like "the Laser Fund," for example,
and came and said,
"Hey, I want one of these
max-funded indexed universal life policies
with the guarantees of zero that you can't lose.
Zero is a hero,
and with an insurance company that's been around
for 150 years, with the safety,
the guarantees of protection,
the death benefit that comes along for the ride,
and then also to be able to take out
tax-free income via loans down the road,
like Doug was saying a minute ago, my father.
So now let's take a look at this client.
So he came to me, you know, very detailed,
super detailed client,
and yeah, we meet every year
and we look at the annual statements
and we see how the policy's performing and so forth,
but we looked at two different examples.
So back in 2009, in about July,
when he went forward with the policy,
we went forward with this contract
and here's one way we looked at it.
He wanted to put in $400,000.
So you can see, he wanted to put in about $399,000,
you know, just shy of $400,000 at age 56,
his death benefit was...
$1.1 million was what the death benefit amount was gonna be,
and in this example,
we show it putting in the maximum amount under tax code,
so we don't create a MEC, so it's not taxable.
This helps keep it tax-free.
We put in the maximum for two years
and then we put in a $30,000 to max it out
until year 10, the last bit of $29,000,
and that maxes it out.
The max you can pay in to have this structured properly,
in this example.
Now he could do it a little faster though,
so he says, "I know I can do this,"
but he might be able to do this.
So this is what's so cool about the flexibility
is another example that we looked at
and he did somewhere in between this.
So this is kind of three examples,
and this one, well, let's go down,
and we'll look at the main one right here.
So in this example,
we showed it maxing it out over six years.
So this is the max he could do,
78, 78, 78 in year six,
and the last little bit of $9,400 in year six
to max it out.
Same death benefit.
This is the same policy.
So because it's not a whole life,
it's an index universal life, in this example,
he can have lots of flexibility,
so he can decide through the years,
do I have the money?
Can I maximum fund it
or take a little bit longer and still max it out,
but max it out over 10 years,
which was this example,
maxing it out over a 10 year period.
He did somewhere in between, all right?
He did somewhere in between
where he did mostly over the six years, I believe,
but he might have taken into the seventh,
or eighth, or ninth year in this example.
So if we look at his example here,
let's look at 2000 or 10 years into it.
So in 10 years, he should have had 473
from what we illustrated.
Now, again, these things could perform
at lower than illustrated or more than illustrated.
We're showing some examples that illustrated better
than what we, you know, had projected.
So this client, for example,
let's go back up here to the top,
and in these examples that we ran,
I ran three examples for him.
So some companies, for example,
this one, we ran an example of a scenario,
one, two, and three,
and in scenario number one,
I ran 10% in a five year account,
a 10% illustrated rate.
We showed nine and a half in another five year account,
8% in a one year account, and a little bit in the fixed.
So we did 30%, 30, 30, and 10 in the fixed is
what we had illustrated back then.
So 60% of the money,
we're showing nine and a half to 10% illustrated rate.
In scenario two, we showed a little bit lower rate,
9%, eight and a half, and seven,
and over here in scenario three,
we showed eight, seven and a half, and six,
showing a more conservative example, more aggressive.
So this is the more aggressive
kind of middle that we showed.
Again, this is back in 2009, about 12 to 13 years ago.
So looking at these examples,
this does not show the accumulation of value,
this is the surrender value,
for those that are a little more familiar,
but in this example, in 10 years,
if we funded it like this,
we should have had in the 10th year,
473, 446, or 421 in those three different scenarios.
So 473, 446, 421.
In 2019, by the end of the policy year here,
this is showing in July of 2019,
he had $558,000 inside the policy.
So once again, this policy,
this is the annual policy statement
for an index universal life.
This is the, you know, the client, I'm the, you know,
the advisor or producer on this.
So in this example, he's averaged, by the way,
nine and a quarter percent is what he's averaged
since the beginning of this policy,
but this last year, well, not this year, this was in 2019,
he had earned $51,000 of interest.
$9,000 came out in policy charges
at $1.1 million of death benefit is his insurance amount,
but 558.
So again, $558,000.
We had projected at those three different examples that
in year 10, there'd be no surrender charge.
So the surrender value would be the same
as the accumulation at that point.
He'd have 473, 446, and 421,
and again, how much does he have?
$558,000, which is way more than $100,000
in these examples, in the comparison.
So we are way ahead of schedule,
but if he would've maxed it out, I'm a little detailed.
So we're getting there.
You know, if he had earned the high returns here,
the highest return examples that we could've showed
like 10%, 9%, and 8%,
and if he would've maxed it out all the way,
by year 10, he would've had $535,000.
So $535,000 by year 10, he has again, right now,
$558,000 inside the policy right now.
So we're ahead of schedule.
It's pretty cool.
So we are ahead of schedule of what we had illustrated
back in 2009, even though some of those accounts,
the caps have come down through the years,
because interest rates have come down through the years.
We've still outperformed what we projected,
even with those very high projections,
because the policy's done very well still.
Really, really good.
And you can see he's got a lot of money here
in the two year account right now.
We've kind of had money in different accounts,
some of the five year.
Now we've kind of transitioned to be more conservative,
so what we do is we manage these through the years.
He's got money in the two year,
not money in the five year accounts anymore
that are a little bit more long-term.
Well, let's fast forward to right now.
So the annual statement almost a year ago,
at the recording of this video,
we're still a month away from his anniversary date in July.
So this is July of 2021,
and this statement,
he earned $95,000 of interest
through that last policy year.
He's got 650.
Those fees have come down.
He's down to $3,000 in fees.
Now the fees go down as he's gotten older in this
because of the way the policy's structured.
So he's got only $3,000 of charges
coming out now, a year.
He's got $654,000 in the policy.
So where would we be at that point?
The one that was maximum funded
to give the benefit of the doubt of where we're at here.
We've gotta go down.
I gotta go down to page 24 for a second here,
because I gotta show one without loans,
because this CPA has not needed to take out loans yet.
So we showed him taking out, in this example,
there's a few different ones, but in this example,
we showed him starting to take out $56,000,
but right now, last year in July of 2021 is year 12.
He should have under the projections, $630,000,
that's illustrating 10%, nine and a half, and 8%,
illustrated rates in those different accounts that we used.
So $630,000 is where we should be at.
Now we are at 654.
So we're at 654 instead of $630,000.
So we're ahead of schedule by about $24,000.
We're ahead of schedule
because the policy's performed better than we illustrated
even at those high examples.
Now, if I show scenario two and three,
that you saw a minute ago, we are way ahead of schedule,
way ahead of schedule on those two examples
that we ran for him.
Now let's fast forward to right now.
This statement is as of April.
The last quarterly statement is as of April of 2022.
At the time of this recording,
this is June, the beginning of June of 2022.
So we're about to hit his anniversary statement
in another month,
but right now his policy has got 667 in it.
So we're at 667.
We should be around 630,
but here's the neat thing with this policy right now,
we've averaged 9% in this since the beginning,
but if we look down here, we have got...
And by the way, just to show you that he has maxed it out.
There's the max.
He can pay into the policy
called the guideline single premium.
That's the max he can pay in is 399 like we showed
and he has maxed it out.
So he has max, he's done well.
You know, he's been maximum funding the policy and so forth,
and again, the policy was dated
back in July of 2009,
but what I wanted to show you in this example is
we are about to hit some two year accounts.
As you guys start to understand these things,
right now the S&P's been pretty volatile
through this year of 2022,
but as of right now,
he has a lot of money on these two dates.
So with indexing,
I know we don't have time to get into all the details,
but those that have watched other videos,
with indexing you're linked to an index
or linked to the S&P on these two year accounts.
He has all of his money now in two year accounts.
The S&P in those dates,
back in 2020,
the S&P is $3,300,
and about $3,380, basically back then.
Right now, at the the time of this recording,
we're at about $4,000 or so,
where the S&P is right now,
and so if the S&P stays flat
for the next couple months,
which of course, it's not,
it's gonna go up and down a little bit,
but if it stays flat,
he has got in these two dates coming up,
$68,000 and $196,000 of values of money that
is on those dates that is gonna get a return.
So if the market stays flat over the next couple months,
because we don't know what it's gonna do,
these two accounts will earn about $60,000 of interest.
What we calculated right now, where the S&P is today
and where it could be in another couple months,
he could earn another $60,000 of interest,
and we would see that
in another couple quarters of the statement,
that he would have another $60,000 added
to that number right there.
So basically, bottom line,
we have outperformed what we illustrated,
even though we showed three examples.
So if we go back here,
we showed three examples here of a scenario,
one, two and three,
you know, high interest rates, 10, nine and a half,
eight, nine, eight and a half, and seven,
and eight, seven and a half, and six,
these three different scenarios,
putting 30% in these two accounts,
30% in this one year account, and 10% in the fixed.
In that example, we outperformed all three,
even the high interest rate example.
We outperformed that through the 10th year,
and even through the 12th year,
and we're on track to sell a performant
by the 13th year coming up here in a couple months.
- So thank you, Aaron.
You know, it's interesting,
we have a lot of CPAs
and engineers that absolutely love
a max funded IUL and laser funds
because they're so technical, and they're thrilled,
because they go through these with a fine tooth comb,
and they're just so picky about so many things,
and yet they see performance,
and they love it when we outperform the illustrated rate,
even though you illustrated some at 10 and at nine.
So hopefully this is giving you insights
into opportunities where,
yeah, IUL really does work.
It's the real deal,
and if you want to study more about it,
and if you have not claimed your free copy of this book,
here's how you can do it.
You simply go to laserfund.com,
L-A-S-E-R fund.com
or click on the link below.
You contribute a nominal amount
towards the shipping and handling,
have some skin in the game,
and I'll cover the rest of that cost,
and I will pay for the book and fire it out.
Now Aaron is a co-author
with your other brother, Emran,
and this has been flying off of our warehouse shelves.
Why?
Because it's 300 pages of charts, graphs, explanations,
14 chapters on this left brain side of the book.
If you're more of a right brain learner,
if you learn by stories,
you flip it over and read this one.
This has 62 actual client stories and examples.
So this will teach you how to diversify
and create the foundation for a tax-free retirement,
and hopefully when you're in there,
you can take advantage of
picking the brains of an IUL specialist like Aaron,
to see how you can employ these strategies
in your particular set of circumstances
and see illustrations,
and we would love to sort of under promise
and then over deliver for you,
for your brighter future, for any of your financial goals.
- Now one thing to add to that real quick is
on this side of the book he was just talking about,
I just recently updated chapter six,
which explains exactly these five year accounts,
the two year account I was explaining.
It goes into detail in chapter six
about the five year account,
the two year account,
and some extra features with multipliers
that aren't even in this example
that can get the returns
up another three, four, five, you know, 6%, historically.
Yeah, chapter six,
which is updated with a lot of this content
on how this indexing works right there.
- Yeah, there have been some clients
because of what we call rebalancing,
when you meet with him annually, you're tweaking this,
and this is why from March of 2020 to March of 2021,
some people switched over at your recommendation
to a one year, point to point with no cap,
and they locked in gains of 61.33%.
You had a client that had 850 some odd thousand
in March of 2020 without adding a dime.
One year later, he had $1,382,000, right?
- Yes. - Yeah.
- He made over a half a million tax-free,
so you have no idea what kinds of opportunities.
That's what he's talking about.
We have updated the book, chapter six, check it out.
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