- It doesn't matter how old or healthy you are,
you can own a LASER fund.
In this video educational episode,
I'm going to address the question,
how to qualify to own a LASER fund?
Get ready.
You're gonna gain insights into an opportunity
that maybe you didn't know existed before.
(bright music)
So, I'm Doug Andrew.
I've been helping people optimize assets, minimize taxes now
for nearly five decades, helping people primarily save
for long-term goals, such as retirement,
maybe college funding for their kids and grandkids
or working capital for their business
or real estate management or emergency funds
or estate planning.
And my favorite vehicle, without question,
that allows people like you
to accumulate their money tax-free
and then be able to access that money totally tax-free,
and at the end of the day, when they die,
anything they leave behind in that account blossoms
and transfers income tax-free is what I call a LASER fund.
Now, a LASER fund is a properly structured,
max-funded indexed universal life insurance contract.
A lot of Americans buy indexed universal life
and sadly, I would say the vast majority do not qualify
to be deemed a LASER fund, in my opinion,
because I want to optimize the internal rate of return.
I have actually averaged 11.17% for the last 25 or 30 years
ever since EF Hutton first introduced this in 1980.
Back then, they didn't have indexed universal life,
they introduced universal life.
And then 17 years later, in 1997,
because interest rates came down,
they introduced indexed universal life,
so you could still earn higher rates of return
in the 8, 9, 10% range or higher.
And so I've actually averaged 9.62% since 1980
with a combination of universal life
and then later on adding indexed universal life.
With indexed universal life, I've averaged 11.17
and that's by rebalancing.
But in this episode, I'm going to assume
that you sort of already understand that a LASER fund
has to be structured correctly and funded properly
to accumulate your money tax-free under Section 72E
of the Internal Revenue Code.
If you don't understand that,
I have other episodes that explain them.
And then to be able to access your money
without triggering any tax,
you have to comply with Section 7702
of the Internal Revenue Code.
And then at the end of the day,
Section 101A says anything that I leave behind
blossoms, increases and transfers income tax-free
because it's a death benefit.
I'm 70.
If I died, every million I might have
in a portfolio of LASER funds would blossom
to about 2 million tax-free.
And so nothing else does that in the Internal Revenue Code.
So a laser fund is my favorite vehicle for long-term goals,
like retirement and what have you.
You have to comply with three tax citations,
TEFRA, DEFRA, and TAMRA.
Those are tax citations I also explain on this channel.
So the people that I train are experts in making sure
when they establish one that you set it up correctly
and fund it properly under TEFRA, DEFRA,
and TAMRA guidelines so that you can accumulate access
and transfer your money totally tax-free.
Well, assuming you sort of understand what one is,
people ask, "So how do I qualify to own one of these?"
Maybe you're not in the best of health or whatever.
So let me simplify this by saying when you open a LASER fund
or set one up or take one out,
there's, generally speaking, five parties involved
in establishing an insurance contract,
a life insurance policy, a LASER fund, okay?
There is the insurer, that's the insurance company,
the one who's ensuring the insured's life.
So you have the insurance company or the insurer.
Then you have the insured.
That is the person that the life insurance
is gonna be put on.
You have the owner who owns the insurance policy,
which most of the time is the insured,
but it doesn't have to be.
You have the premium payor,
that's the one who's paying the premiums
on that life insurance policy, which normally is the owner
and the insured.
But the premium payor does not have to be the owner
or the insured, okay?
And then you have the beneficiary.
The beneficiary is the one that's named
at the time the policy is taken out
or it goes through underwriting.
The beneficiary is who's named
to receive the life insurance proceeds
upon the insured's death, okay?
So those are the five general parties involved
when you open a LASER fund,
which is an indexed universal life insurance policy.
Okay, so here's the basic rules.
When you apply for a life insurance policy,
such as a LASER fund, you must prove to the underwriter
the reason and justification for the insurance policy
the amount of insurance you're applying for.
That surprises some people.
Some people go, "Why can't I just take $10 million
of life insurance if I want?"
Well, because there are crazy people in the world
that belong to cults and they will take out 50 million,
$100 million life insurance policies
and then strap bombs around themselves
and blow themselves up so that they leave behind millions
of dollars tax-free to their cult or their organization
or whatever because they're gonna be saved in heaven
if they do that.
Yeah, believe me, there are nuts out there.
So you cannot just go take out
as much life insurance as you want.
You have to qualify from a financial standpoint
and also from a health standpoint.
So the general qualifications
when you are applying for life insurance,
whoever is the insured has to be insurable, okay?
And so you have to pass, you know, the health exams
and what have you.
And it doesn't mean you have to pass with flying colors.
You could have even had a heart attack
and they did heart surgery
or you could have had quadruple bypasses seven years ago
and if you got a clean bill of health, you qualify.
Sometimes people rule themselves out
because they're diabetic or they had a heart attack.
No, you would be surprised how many people actually qualify
because under TEFRA and DEFRA,
if you can qualify for the insurance
and even if the insurance company rates you
at a higher risk than a standard person
that hasn't had a heart attack or diabetes or whatever,
if they rate you a table A, B, C, D, it doesn't matter,
you can squeeze down the death benefit
under TEFRA and DEFRA, so that your rate of return,
you can earn 11 and net 10 just like a healthy, 22-year-old,
athletic, marathon-running female.
See, you can earn 11 and net 10 like she can
because even though a friend of our family
who was 78 years old when he came to us,
he had three blocked arteries.
They did treat it with angioplasties, okay?
He had adult-onset diabetes,
he had a prostate cancer episode,
he had six sisters predecease him and three brothers.
He was rated table D, but he was able to earn 11 and net 10.
He put in a half a million bucks
and started pulling out 50,000 a year tax-free
back in the 1980s.
He got 11, netted 10 just like the 20-year-old
because the amount of insurance he was required to have
was way less than if a 22-year-old had walked in
with a half a million.
Now, most 22 year olds don't have a half a million,
but, folks, TEFRA and DEFRA gave parity,
meaning equality if you're using it for living benefit.
That's why it's imperative you go to an agent
that understands how to do this right.
So, but you have to be insurable.
Now, what if he had not been insurable?
What if the insurance company had said,
"Nope, we don't even wanna insure you."
Hm, okay.
Then we use a surrogate.
A surrogate could have been his wife
if she passed the physical exams.
It could have been his adult children
or many adult children.
It could have been a business partner.
And so you can use a surrogate
and he would own the IUL policy on his wife or his kids.
The owner of the insurance contract
is the one that gets all the tax-free accumulation
and the tax-free growth and the tax-free income.
So if your goal is tax-free accumulation and income,
it's ideal if you're the owner and the insured,
but you don't have to be the insured.
You can own one on your spouse.
We've had many, many people buy these on their spouse.
Heavens, I own these on my wife.
My wife owns 'em on me.
I own 'em on my kids.
My kids own 'em on me.
Hello.
The owner gets the tax-free accumulation
and tax-free access.
Now, there's another requirement.
You have to qualify financially.
So when you're young, if you're the insured,
you can qualify usually as a factor times your income.
So let's say you're making a hundred thousand a year.
Usually in your 20s and 30s, when you're young,
you have little children,
an insurance company, without question,
will ensure you for 30 times your income
'cause if you happen die,
your widow, your family's gonna need about 30 times that
or about 3 million bucks
to be able to have the music lessons, go to college,
go to school, and not outlive their money
because there's a long time before your widow
would probably die or your children.
Now the older you get, if you turn 60,
you will not qualify for 30 times your income.
Your income will likely be higher,
but maybe you'll only qualify for six
or eight times your income or one times your net worth,
sometimes higher than that because your net worth
might be 3 million at that point.
So without question, they'll ensure you
for one times your net worth because you may owe a state tax
if you die or you're wanting to replace assets
and so you can qualify for a factor times your net worth
or a factor times your income.
But the older you are, the factor is lower.
Does that make sense?
So there's not just Scott, no, the sky's the limit.
There is a limit based upon your net worth or your income
the older you get.
Now, one other requirement when you apply.
You must prove to the underwriter
that there will be an economic loss suffered
by virtue of the insured's death by the beneficiary
named at the time of underwriting.
In other words, you can't just name anybody a beneficiary.
You've gotta say this beneficiary will suffer economically
a million dollars or a million and a half dollars
for these reasons by virtue of this insured's death.
That's called an insurable interest.
If you cannot prove an insurable interest, an economic loss,
they're not going to approve you.
Now, you can change the beneficiary
the month after you take out the policy to a church,
a charity, or whatever.
But when you are qualifying,
you must prove an economic loss is gonna be suffered
by the beneficiary named on the application.
Does that make sense?
Once you do that,
you can have a parent
own policies on their spouse or their children.
The premium payor could be the family trust
or the grandparents.
So the premium payor could be a different party
than the owner, which is a different person or party
from the insured.
The insured has to create an economic loss
by virtue of their death to the name beneficiary
at the time of the application to get approved.
Once you've done all of that, later on,
the owner is the one who now can make changes
in the beneficiary.
They can change the owner, they can't change the insured,
they can sell the policy, they can do whatever they want.
So when people say, "How do you qualify for one?"
You have to qualify financially.
Those are called financial underwriting guidelines.
And by medical guidelines, the health.
But don't rule yourself out.
Just because you have a few health issues
or you're diabetic, chances are even if you're rated,
you can squeeze down the death benefit under TEFRA and DEFRA
and you can get the same internal rate of return
as a healthy 20-year-old.
If you do get turned down, you can apply to another company.
Sometimes some companies approve others and others don't
or you can use a surrogate.
Hopefully this has opened your mind to some opportunities
that you did not know existed before.
But those are some ideas on how to qualify
to own a LASER fund.
And then you can deposit the money in there.
It's usually the owner that will then benefit
from that money and be able to access it while you're alive.
So even grandparents can fund money for their children
or grandchildren and it's their money to use for college
or for the down payment on a home or for their retirement
depending upon how you wanna set it up
in what we call a family bank.
Hopefully this has given you some ideas.
If you wanna learn more how to establish a LASER fund
and how flexible they are, read my book, "The LASER Fund".
Here's how you can claim your free copy
of this 300-page book, which is actually two books in one.
One of them is 200 pages, 14 chapters
with all the charts and graphs for the left-brain learner.
For the right-brain learner, you flip it over to this one.
This is 12 chapters, about a hundred pages
with 62 actual client stories.
You claim your free copy by going to laserfund,
laserfund.com or click on the link below.
You contribute a nominal amount
towards the shipping and handling,
have some skin in the game.
I'll cover the rest of that cost.
And I will pay for the book.
I'll fire out a hard copy to you and there's options there
if you like to listen and learn, watch and learn,
check out some of the educational webinars
we teach on a regular basis.
We have master classes.
But if you want to talk to an IUL specialist
to see how a LASER fund could be established correctly
for you with no cost, no obligation,
you can put your name into their appointment calendar
and pick their brain on how this phenomenal financial tool
can be a tool for your brighter future.
'Cause this isn't about me, this is about you
and how you can qualify one way or another.
(bright music)