- Hi, Doug Andrew here.
Welcome to this episode in the "Does IUL Work?" series.
It's our objective here to show you illustrations
of actual clients who have owned IUL insurance policies
for maybe 10 years or longer,
and how many of them, not only perform as illustrated
but outperform as illustrated.
And so I'm excited to have my son, Emron
who's one of the top IUL specialists in America.
He's also a co-author with me
on a couple of my bestselling books
and I wanna gift you one at the end of this episode,
so stay with us.
But Emron's gonna show an illustration
of a school teacher who is now retired
and what she was illustrated,
what about 12 years ago in 2010? Okay.
And according to this episode
which is mid 2022,
how well this has done compared
to what you illustrated for her.
So take it away, Emron
and my favorite vehicle is a max-funded IUL
and you're gonna see how they really do work.
Take it away.
(upbeat music)
- To kind of go through this,
I met this wonderful lady back in 2010,
a little bit after the 2008 crash
and she really wanted to create greater predictability,
especially financially.
She wanted to protect herself from taxes.
She knew that her estate pension
was gonna be subject to taxes,
their 403(b) was gonna be subject to taxes,
everything she had was subject to taxes
so this was a great move to be able
to diversify some of the funds
to be able to create some tax-free accounts here.
And when I met her back in 2000, in late 2009
and started their policy in early 2010,
we put this together to be able to put money in
over the course of the next 10 to 12 years
and then she was looking at retirement.
She was gonna retire sometime between a year's 10 and 15
so we wanna make sure she had the flexibility
of being able to do that.
Stop putting money into the policy.
So she's gonna put money in for the next 10, 11 years
and then she's gonna stop putting money in
and at some point she wants start taking money out.
No, like I said, she actually retired
a little over a year ago
and has been loving and enjoying retirement,
and being able to access and be able
to start to looking at accessing some of the funds tax free
out of her IUL laser fund.
But as we look at this,
I wanna start with the end in mind here
so this is now from 2010 to today
so we're looking about 12 years later.
12 years into the policy here,
she has been averaging, 9.56% per year.
That's been the average. It's been up and down.
We've had a couple of years where the market went down
and we got zeros,
other years the market goes up and she gets a better return.
You can see across the board right here,
she's gotten anywhere between 2.79% on the fixed account,
7.97 on the one year account,
11.23% on the one year high cap,
she's had as high as 28.8% on the no cap
and she's at 11.25% on the five year high par index account,
giving her an overall,
that overall average of 9.7 total of all the account
or the index accounts have been averaging 9.79.
and her overall account
with the fixed account in there is 9.56.
Now, today, 12 years later,
she is looking at an account balance right here
of a $70,913.
Her surrender value is the exact same number here.
so there is no surrender charge on this policy.
After 10 years though, surrender charge
has been eliminated on this policy
so she has access to all of her funds
if she needed or wanted it
or if she just wanted to take out a tax-free loan,
you could see she could access up to out of the $70,900.
She could go access 70,686.
So just about all the money except for $300
if she wanted to access it, be a tax free on a policy loan
and the death benefit overall
on this one here $150,000, right?
We have $150,000 death benefit, $70,000 of cash value.
If you understand how we structure, how we teach,
how to structure these insurance policies correctly,
she's not paying for $150,000 death benefit anymore.
She's only paying for the difference
between the 150 and the 70,000
so she only has about,
she's only paying for an $80,000 life insurance policy
not $150,000 life insurance policy
which is allowing the cost of the policy
to come down because she's paying for less and less risk
which I'm driving the fees down on the policy
which is allowing the policy to perform even better
than we had originally illustrated.
Now let's go ahead and take a look at that.
Let's look at the original illustration.
So if we dive in,
here's the original illustration right here.
So she started this right here at age 59
so at age 59 is when she started this
and her premium schedule was right here
for those 11, 12 years.
So in the first 11 years here, we were looking
at putting in starting out with $9,662
and then she was gonna drop it down to $3,245
and do that all the way until year 11.
Putting in a total of about 47, 48, just under 50.
Well, it's actually right here,
we've got a total of 48,000, sorry,
down there at the very bottom.
Let me just try to highlight
that a little bit and we'll try to zoom in on that.
Okay, we've got a total of $48,530
that has been past paid into this policy.
Now, in the year 13 here,
so if we go in and we're looking at year 12,
okay, so right here, sorry, we'll go in
and year 12 we'll highlight that
you're across the board right here,
and then we'll zoom in again.
So if we look at this in year 12,
she's projected to be at $63,781,
both in her accumulation value
and in her surrender value.
You can see that they equal each other
at the end of 10 years.
So the end of 10 years,
they're almost equal in in year nine,
they're equal in after year 10, 11
and at the end of year 12.
So we just wrapped up year 12 of this life insurance policy
so she supposed to have $63,781 in her policy
according to the original illustration.
But if we go back again and look at this again,
remember she's actually sitting at 70,000, right?
She's sitting right here at $70,913, not at the 63,000,
giving us our performance there of $7,000
or if we go back here and look at this,
if we go back, if she's supposed to have $70,000,
when would she eventually hit that 70,000?
Well, she wasn't gonna hit that until 63.
She goes right here at $94,000 right here.
She's gonna hit that $70,000
or she would be with that five-year indexing.
She's gonna hit there in another
this is year 12, 13, 14, 15
so near 15 is when she's projected to go to 94,000
and right here, we're actually already at,
oops, sorry, We're already at the $70,900
with three more years to go
to be able to continue to earn interest on that
and if we continue to get almost a 10% return on that,
that would be almost another three years.
That's almost gonna be another 20 something thousand dollars
on top of that 70,000
if we keep on averaging nine and a half percent.
So that would be the the 70,000 plus the 90
plus another 20, $25,000 on top of that,
we're right on queue.
We're a little bit ahead of schedule on this policy,
on the actual results.
Client, she has been extremely pleased with it,
extremely happy with the results.
And we're looking forward to continuing to provide her
above average results on her life insurance policy.
- Thank you Emron for giving us this illustration.
She's gotta be tickled with the results of this IUL policy.
And again, this is not a large bucket
as we call these IUL policies.
We sometimes use the metaphor of a bucket
but she was able to fund this with money for her retirement
and even though she hasn't started
taking out income yet, has she?
- No, she hasn't.
She's looking at maybe in the next year or two,
but she hasn't had to take out income yet,
but she knows she can.
- And do you remember on the original illustration
what the interest rate was illustrated at?
- I believe the original illustration was
at eight and a half percent.
- So sometimes we have naysayers that go,
"Oh yeah, show us what actually happened.
You illustrated at eight and a half."
Well, she's actually been averaging 9.56, okay.
One percentage point ahead of it.
And this isn't just unique.
This happens a lot.
And so this is just one illustration where IUL does work.
It can be an amazing instrument
as a supplement to retirement.
If you wanna learn more
about how an IUL policy can benefit you
for long term goals like retirement
or college funding for your kids and grandkids,
you want to study this book, "The Laser Fund."
If you do not have a copy, you can claim one for free.
You don't have to go to Amazon and pay 20 bucks.
I will gift you a copy of this for free.
You simply go to laser fund, L-A-S-E-Rfund.com
or click on the link below
and you contribute a nominal amount
towards the shipping and handling.
You don't have some, skin in the game.
I'll cover the rest of that
and I'll pay for the book.
I'll fire out a hard copy of this to you, a physical copy
and there's also options there
to listen and learn, watch, and learn
but while you're in there,
there's educational virtual events that we hold
but you can even talk to an IUL specialist like Emron
to see how these IUL policies can be structured
to help you achieve your goal.
So this is about you and your brighter future.
(soft music)