- 38 reasons why an IUL
knocks the socks off of traditional advice.
In this episode, I'm going to disclose
and answer the question, what is an IUL account?
Get ready.
I'm gonna frankly overwhelm you
and hopefully you'll be interested in receiving a free copy
of my most recent bestselling book
called "The LASER Fund",
which is a properly structured
and maximum funded indexed universal life insurance policy
or account, an IUL.
Unfortunately, the vast majority of IUL policies
that are sold and owned in America
are not structured correctly and funded properly
to do what I'm gonna show you here.
If they are, then they would be deemed a LASER fund.
LASER, that's an acronym
that stands for liquid assets safely earning returns.
And so when it's structured correctly,
you have tremendous liquidity safety,
you're in predictable rates of return and it's tax free.
And if you do it correctly,
it'll knock the socks off of any other.
But there's like 38 different huge benefits
that most Americans are never shown,
and frankly, a lot of financial advisors don't understand.
(upbeat music)
So I've been a financial strategist
and retirement planning specialist
for more than 48 and a half years,
helping people optimize assets and minimize tax.
And in doing that, I've talked over 90,000 hours
in front of audiences, and many times I'll do this.
I'll say, "Folks, you're all familiar with this product.
Explain or yell out some uses for baking soda."
Now, invariably, the women in the audience
will speak up first
and they'll yell out, "Well, you can soak in the tub,
or you can take the odor out of the refrigerator,
or you can take the pop out of a pot of beans
when you're cooking beans or whatever," okay?
And then the man will usually say,
"Well, I clean my battery terminals with that stuff."
Yep.
And then finally somebody goes,
"Oh, it's good for baking. (laughs)
The obvious. So what's my point?
For years, I have been helping my clients
optimize assets and minimize tax
by using life insurance for life.
Most financial advisors use it for death.
In other words, they say,
"Oh, you just should, you know,
buy term insurance and invest the difference
because you wanna invest
to get a good rate of return over here
and you only use life insurance to pay off when you die."
And so, you know, you want to protect yourself
so that if you did happen to die sooner than later
with an untimely death, as we call that,
that your spouse, your kids that you leave behind
would've had the lifestyle, piano lessons,
going to school and college and what have you,
that you would've provided had you stayed around.
And so basically, if you're in your 30s,
and you have two, three children or whatever,
most insurance companies will let you have life insurance
up to maybe 30 times your income.
If you're making a hundred thousand a year,
you might qualify for as much as 3 million
of life insurance.
Now a lot of people don't understand
that you can't just go in
and apply for a bazillion dollars of life insurance.
You have to have the money to pay for it.
But there's even cults that would provide millions
to get you to do that.
And then you could be a hero
by strapping a bomb around your waist.
And yeah, there are crazy organizations
and cults out there that would do that.
So insurance companies will only ensure you
for up to a factor times your income when you're younger.
When you're older, they can still use that,
but they'll also ensure you
maybe up to one times your net worth.
So if you're 60, they may only let you get insurance
of maybe 12 times your income instead of 30.
But because if you died at age 60,
most of your kids would probably be out of the nest by then.
So you don't have to worry about that.
And your spouse has fewer years left in their life.
And so you don't need as much.
You only need about maybe 12 or 15 times your income
and your income's probably much greater,
or they'll let you ensure yourself
for maybe 100% of your net worth.
If you're worth a million,
they'll ensure you for a million, no questions asked.
But if it's 5 million, you qualify for 5 million.
Now some people think,
"Well, why would I own that if I don't need it?"
You gotta look at what it does instead of what it is
because for years I've been using life insurance
for living benefits, not just the death benefit.
And this was actually the idea
or the brainchild behind EF Hutton in 1980
when they introduced max-funded universal life.
Their objective was,
let's use life insurance for living benefits.
Instead of trying to get X amount of insurance
for the least or cheapest premium, let's flip it.
Let's take the least amount
of insurance the IRS will let us get away with
and put in the most premium the IRS allows
and it turns into a tax-free cash cow.
If you wanted to invest 500,000,
you could buy a bazillion dollars,
I mean a ton of life insurance for 500,000 bucks.
No, you take the least amount.
So when you're doing what I'm talking about,
if you were 60 years old and you had 500,000,
the minimum amount of insurance is only a million.
Now who pays 500 grand for a million?
Well, people who want to use it
for living benefits do.
When it was first introduced, you put in 500 grand.
Back in 1980 until 1990,
I never got credited less than 11 and 3/4%
on my universal life.
I earned as much as 15 and 1/2%.
But let's round it down to 11.
I was earning 11 and netting 10.
I had many, many clients who put in a half a million.
They were earning 11, netting 10,
and they pulled out 50 grand a year tax free.
It was totally tax free
because money inside of an insurance contract
for over 108 years now is a sacred cow.
It accumulates your money tax free
under section 72e of the code,
if you're wondering, and you can access money tax free.
So when they put in 500 grand
and started pulling out 50,000 a year, the interest,
it was totally tax free under section 7702 of the code.
'Cause they were able to structure the policy
with the least amount of death benefit
and to put in the most money
'cause their objective was for life, living benefits,
tax-free income.
But when they died, the half a million would blossom
to a higher amount, but it would double to a million.
But if you leave it in there to grow, that 500,000 grows.
And many of my clients with indexed universal life,
which was introduced later in 1997,
they have earned 11 and netted 10 still to this day
because indexed universal life
was introduced when interest rates started to come down.
And that allowed people to be able to participate
without your money at risk in the market
by linking your returns to an index.
But if that index or the S&P or the Dow Jones,
whatever thing you linked it to,
went down, you didn't lose.
The options expire worthless.
But where did they get the money to buy options?
The insurance company,
you relinquished the interest on your money.
So 500,000 normally was able to earn rates of return
still of 11.17 netting over 10%,
even going back to 1980 before indexing came out.
I've averaged 9.62% on universal life
combined with indexed universal life.
Let's round that down to 9.6.
If you understand rule of 72 math, you divide 9.6% into 72,
your money will double every seven and a half years.
Yep, we've had many people,
their money has doubled in seven and a half years,
a half million double to 1,000,00 in seven and a half years.
Now let's say you have a million
and you're starting to take out that income.
Well, see, for living benefits,
they can use this for all kinds of goals.
What I've been talking about,
it becomes the dream solution
and I call it the financial Swiss Army knife in my books,
and I wanna gift you a copy of this,
because you can use it for the death benefit,
but that's the secondary objective.
You want the least death benefit
the IRS will let you get away with
and you wanna put in the most money for what?
The retirement planning
so that you can accumulate a million.
Every million can generate 80, 90,
a hundred thousand bucks a year of tax-free income
from age 65 if you live to be 120
without depleting principal
based on actual historical rates of return
in this instrument called IUL.
If it's structured correctly and funded properly
and you rebalance, it's deemed what I call a LASER fund.
But when people see that, they go,
"Well, could I do this in lieu
of a 529 college savings plan?"
Absolutely.
In fact, why would you mess around
with one of those if your child doesn't need that money,
they have to pay tax on it.
If they got a scholarship
and they wanna use the money for a down payment on a home
or to start a business.
Why would you, you know,
you put it into a LASER fund and it's tax free
and you take it out as tax free
for whatever reason you need.
What about working capital for business?
Business owners go,
"Well, could I just keep my money in here
from my business working capital
and when I need to buy some inventory or do something,
could I access money?"
Yeah, you could borrow it out at like 2%
or you could borrow, "Why would I borrow my money?
Why don't I just withdraw it?"
Because if you borrow it at two or 5%,
you'll keep earning maybe nine, 10, 11 or 12%.
Would you borrow money
and pay 5% if you could keep earning 10? Yeah.
Would you hire an employee for 50,000 a year
that made you an extra a hundred thousand?
And all of a sudden, business people get it
and they wanna use it for a working capital account.
Same thing for real estate managers
that own rental properties.
It's way better than an emergency fund
that you put your money in one of these.
The safety rating is usually four or five notches,
sometimes six notches higher
than most banks and credit unions.
It's triple A compared to triple B.
And the rate of return goes from 1% in the bank
to even just 5% if you don't even link to an index.
You can earn five times as much money
and have five times the safety
or five notches higher in safety rather
by having this as your emergency fund.
If you have lump sums for capital transfer,
if you're using it for estate planning,
if you're a school teacher, police officer, a firefighter,
or you have a defined benefit pension,
take the no survivor benefit.
Don't let them talk you into a reduced amount
so that your spouse will continue to get your benefit
if you happen to predeceased, okay, them.
No, you want to take that differential,
get the full amount and put it into one of these
and you'll have way more flexibility.
And your spouse, if your spouse dies first and you remarry,
you're not disinheriting them nor your children
that you would be doing
if you took out the state's pension
under a survivor benefit.
General tax reduction principles.
So I want you to learn and study all the benefits of this
and here's why.
When you begin to understand everything
that's disclosed in this gift I'm gonna give you,
if you count them up, there's 38 major benefits.
Now there's some sub benefits here.
Liquidity, you're gonna access your money when you need it.
Safety, not only safety of the institution,
but safety of principal.
If the market goes down, you don't lose.
You may not make anything that year, but you don't lose.
And any year that you make money,
that becomes newly protected principal.
You will never lose in future years
money you made in past years
based on the market going down.
You will not lose due to that market volatility.
That's safety, and you earn predictable rates of returns.
Some years as high as 25 and maybe 61%
like many of our clients did last year.
But we're talking about average returns
of seven to 10% tax free.
These are the tax benefits, okay?
And not just tax deferred,
but there's a lot of legal advantages
'cause it's very hard to sue somebody
for the money inside their insurance policy.
Did you know that?
And the death benefit at the end of the day
is totally income tax free.
This is the only vehicle in the Internal Revenue code
that allows you to accumulate money tax free.
You can access it tax free.
When you die, it blossoms, increases
and transfers income tax free.
And that doesn't cost me anything.
It's not free, but it's being paid
for with a minuscule portion of money
that most people pay out in unnecessary tax.
So this is a mind map.
In liquidity, you'll understand it doesn't matter
if you need it because of job loss, emergencies.
This is an alternative to CDs.
Money markets paying way higher interest.
It's an alternative to an annuity,
alternative to IRAs and 401ks and so forth
that are gonna be taxed.
You have the ability to be able to not pay tax
on any of that money when you take it out.
You can manage all of these blades
on the financial Swiss Army knife,
but with IUL, your money is safe
due to the market volatility
which is gonna continue to happen.
And you have this peace of mind.
This is why many retirees love this
'cause they don't have to worry about timing the market
or having to slow down or stop taking retirement income
until the market bounces back.
Wall Street was not designed to create predictable income.
The rate of return,
you don't have to have pie in the sky rates of return
but there are periods where you will earn 16 and 25 and 61%.
We had some clients lock in gains last year
of 158% using multipliers.
The key is when the market goes down, you don't lose.
So the average rates of return are normally, you know,
between eight to 10%.
But if you rebalance every year or two,
then that's where you can tweak them to earn more
like 11 and net 10, which is what I've done.
That's why I point my students to professionals
that will show you how to do that.
But the death benefit is tax free.
It protects your creditors.
Creditors can't come and grab that, okay?
It's creditor proof.
Unless you named some creditors the beneficiary
of your life insurance.
But the death benefit is totally tax free.
It blossoms when you die.
The legal advantages for your estate planning
and if you have money inside of an insurance contract
is next to impossible to penetrate in lawsuits.
And I can't go into all the details right now
but if you want to have the utmost 38 advantages, okay,
over where most people have their money
they don't have those advantages.
You need to learn why this all comes back to this.
It's a max-funded index universal life insurance contract
structured correctly and funded properly.
If it is, it will be deemed a LASER fund,
liquid assets safely earning returns, okay?
And conservatively, every million that you have
in one of these can generate 80
to a hundred thousand a year tax-free income
if you live from age 60 to age 120 with that income.
Most IRA and 401ks will be out of money
in about 11 to 15 years due to the negative impact
of taxes, inflation, and market volatility.
On this channel, I show you how to eliminate those dangers.
And it's also disclosed in this book.
How do you get a copy?
Now I require some skin in the game.
You go to laserfund.com, L-A-S-E-Rfund.com,
click on the link below.
You contribute a nominal amount
towards the shipping and handling, okay?
I'll cover the rest of that cost,
and I'll pay for the book and fire out a copy to you.
It's 300 pages of charts, graphs and explanations.
You flip it over and this side has about a hundred pages,
12 chapters with 62, you know,
chicken soup for the financial soul stories
of how this financial Swiss Army knife works, okay?
But this is about you and your brighter future.
When you're in there,
there's options if you like to listen and learn
and watch and learn.
But check out the free educational webinars
we do on a regular basis.
And also you can actually fill in an appointment
to talk to an IUL specialist, if you'd like,
to see how a LASER fund could be designed
for your particular set of circumstances
so that you can have those 38 benefits that I alluded to.
(upbeat music)