- 31 concepts and strategies, that in my opinion,
your financial advisor should know
and understand to correctly structure IUL,
indexed universal life.
By the end of this video episode,
you will understand some very critical
and basic knowledge and skills
that will make or break your success with max funded IUL.
(upbeat music)
So, I'm Doug Andrew
and I've been helping people optimize their assets
and minimize taxes now for north of 48 years.
During that 48 year career
'cause I'm approaching age 70,
I have licensed and trained thousands of financial advisors.
And as I teach them,
I'm amazed at what they don't know.
Even though they have all these licenses
and a lot of 'em have this alphabet soup behind their name
and they're trained to just follow the herd
of financial advice.
"Oh, just put money in tax deferred IRAs or 401-Ks,
you'll likely be in a lower tax bracket when you retire."
And that has not been true
or axiomatic for more than 30 years now
but they keep telling advisors,
"Hey what the public doesn't know won't hurt them."
Oh yes it does.
So, I've been very passionate about helping my own clients
understand better how to optimize their financial assets
and not outlive their money
and be able to make themselves immune
from dangers like taxes, inflation and market volatility
and be able to use strategies
that will keep their money liquid, safe,
earning predictable rates of return totally tax free,
so that they will not outlive their money in retirement.
So, my favorite financial instrument or vehicle
is a max funded IUL.
That stands for indexed universal life.
And so, my 11th book talks about the LASER Fund
because over 99% of indexed universal life policy
sold in America would not qualify as a LASER Fund.
LASER is an acronym
that stands for liquid assets safely earning returns.
And so, an IUL policy has to be structured correctly
and funded properly in order to reform
as a supreme dream solution
for all kinds of financial goals.
And so, I'm very passionate
about educating the general public,
that's why I have this channel
but also educating the advisors.
So, this episode,
I'm gonna go through 31 video episodes
that I have a version for you
because many people, general public,
they watch these episodes
and they end up knowing far more than their advisor does.
And that's why they realize,
"Hey, my advisor doesn't understand this."
And so, they off times come directly to me
and then I point them to advisors who do understand it.
And so, then the advisors say,
"Well Doug, I need to learn as much as my client knows
because my client has watched these videos
and read your books."
And so I go,
"Okay, you need to go through these 31 educational videos
at a minimum
before you can really effectively help your clients."
So, I'm gonna go through these in this episode
and just give you a glimpse of it.
You may not be able to read 'em up here
but I'm gonna use it
so that I can go through in order.
So again, I have this library in a format for you to learn
but I also have the exact same topics
in a different format for financial advisors.
And if your advisor does not know these different concepts
and strategies,
you may wanna rethink your thinking and change advisors.
So, it starts out talking about
now what is the difference between term whole life
and universal life?
And that universal life
was actually designed by EF Hutton for living benefits
more than for the death benefit.
That's why it's different than whole life.
Whole life is primarily used for death benefit.
Number two, what does it mean to maximum fund
an indexed universal life?
What does that really mean under IRS guidelines?
Maximum funded under those IRS guidelines,
so it'll be tax free.
Number three.
Why is cash value
that grows inside of an insurance policy tax free?
So, where does it say that in the Internal Revenue Code?
And so, IUL is tax free
and it's like a sacred tax free cash cow.
You can understand that
and you will understand it better than your advisor,
unless they probably watch the same education.
And number four, doesn't universal life insurance cost more
the older you are?
If your advisor says insurance
gets more expensive as you get older,
they don't know what they don't know.
So, this can get cheaper the older you get.
Have you ever seen an insurance policy get cheaper?
Well, then you haven't seen one
structured correctly like this.
Number five.
Why can't you fund a universal life policy
all in one fell swoop, one lump sum?
If you want tax free access, you can't do that.
You have to spread it out over five years,
whole life takes seven years.
You wouldn't believe how many insurance agents
don't understand why whole life takes seven years
and universal life only takes five.
Now, the next series.
Number six, what's the difference
between fixed, variable and indexed universal life?
I usually talk about the difference
between fixed and variable
'cause fixed came out first and then variable.
Now, variable means your money's exposed to risk
in the market.
So, seeking higher returns
with variable life insurance means higher risk.
So, the next video is what is indexed universal life
and how does it work?
Well, you get to participate when the market goes up
and you don't lose when the market goes down.
And a lot of people, even advisors go, "How does that work?"
They think I'm talking about indexed mutual funds.
No, I'm talking about indexed universal life.
You don't lose due to market volatility.
The eighth episode,
what does it mean to lock in your gains and reset?
I compare this to a ratchet wrench
where you're tightening the bolt and every time you reset,
you're not un-loosening the progress you've made.
That's indexed universal life.
Every year you get to lock in the gains.
Meaning like in 2017,
a lot of our clients locked in gains of 16%, 25%.
I had a client with a million dollars
and before 2017, ended up with 1,250,000 one year later.
The next year, if the market crashed 40%,
they would still keep their 1,250,000.
You lock in your gains every year and you reset.
Meaning if next year the market crashes,
you may not make anything the next year but you don't lose
what you made the year before or years before.
Well, a lot of advisors don't understand that.
You will but your advisor ought to understand that
or you ought to change advisors.
So, I use the metaphor of a ratchet wrench.
What are linking methods
that are used with indexed universal life?
A lot of advisors,
even insurance agents don't understand the linking methods
to be able to do this.
One year point point to point.
Two year point to point.
Five year point to point and so forth.
What does it mean to rebalance your IUL portfolio?
Yeah, you wanna diversify.
You can diversify like crazy
with different IUL policies, companies
but also with the indices, the linking methods
and caps and no caps.
Oh my heavens, you talk about diversification
but you're diversifying among superior vehicles.
And so, you tweak your returns by rebalancing every year.
You wouldn't believe how many advisors I say, "Rebalance,"
and they go, "What, what's rebalance mean?"
Ooh, that should be a red flag.
Now, in the next series, number 11 episode.
And I do these in order.
When you watch them,
you will learn a precept and then another precept
and another precept that builds on the previous ones
and that's why I do it also for the advisors
'cause they don't know what they don't know.
But once they watch these,
now at least they know as much as you do,
if you read my books or watch these.
So, how can I access money outta my IUL, the cash value,
totally tax free?
And that comes after
under section 7702 of the Internal Revenue Code.
And I explain simply there's a sad way,
there's a dumb way
and there's a smart way.
And if your advisor does not understand those three ways,
that should be a red flag.
The next episode, why borrowing my own money
in an IUL instead of withdrawing it
is probably the smartest thing to do?
How to become your own bankers and do what millionaires
and billionaires do, where they borrow money at 4%
and they continue to earn 25% on their money
that they didn't withdraw out of an IUL policy.
This is incredible
and I can't believe how many advisors don't understand this.
They're totally clueless.
And they talk about the banking concept with whole life.
And I'm like, "What?"
If you really believe in the banking concept,
you need to understand about this with universal life
'cause it'll knock the socks off of
what a whole life policy can do,
if you understand the banking concept,
how to become your own banker.
The next episode, do I have to pay back loans
on my indexed universal life policy,
if you take out loans?
No, you'll learn.
No, it's not due and payable during your lifetime.
It's washed away when you die
but see you grandfather yourself if you want
to put money back in,
you can pay back a loan and reinvest tax free
but you're never obligated to.
A lot of advisors don't understand that one.
Why would I want to pay the most premium into an IUL policy?
If an advisor doesn't understand that and you do,
you ought to change advisors.
You self-insure.
You are paying for less and less of the risk
as the years go on,
so the insurance policy is getting cheaper as you get older.
And if you don't understand that, watch that episode.
Next, what are the key elements of a prudent investment?
Liquidity, safety and rate of return.
An IUL policy passes those tests,
those key elements with flying colors.
Most advisors in America have their client's money
in investments where it fails the liquidity, safety
and rate of return test.
Now, the last of the first 21 here.
What are the actual historical rates of return?
You will see (sound of bell ringing)
that you can achieve average returns of 7 to 10%.
And some years, you will earn 25, 61%, even 153%
like some of our clients did in the year 2021.
So, you can see actual performance in history
'cause there's a lot of advisors that go,
"I've never seen one do that."
Oh really?
So, you think they don't exist?
Have you ever seen your brain?
How do you know that exists?
Their reasoning is ridiculous.
Next, how does IUL compare to other investment alternatives?
So, you will see charts and graphs
and this knocks the socks off of most other investments
that are subject to volatility or taxes or inflation
and they just don't keep up.
IUL does.
Next, can IUL be used for financial goals
other than retirement?
I go through and show it's the dream solution,
like a financial Swiss army knife
for many goals like college funding,
working capital for business, real estate management,
emergency funds, estate planning,
lump sum pension maximization
if you're a retiring school teacher.
There's all kinds of goals.
Next, how come my advisor didn't tell me about this?
Now, this is really telling.
Most of them don't understand it
and they're not gonna talk about something
that they don't understand
but they're firms want them to churn your money
in the market.
They don't make as much money if they do this.
And yet, they're told to say, "Oh, insurance,
the agent's getting rich off of you."
No, universal life, if you invested $1/2 million,
your fees might end up being 20 or 30,000
over the life of the policy to the agent,
compared to asset managers that charge you 1%
on that 1/2 million as it hopefully grows to 8 million
over 30 years,
they'll make over a million dollars in fees
but they act like the insurance is expensive.
Ha.
I can outperform them almost any day
and the fees are dramatically less.
And so, there's 10 reasons why everybody isn't doing this
and why your advisor doesn't tell you about it.
How can I tell if an advisor knows how to structure an IUL?
There are 14 questions
in this video that you should ask your advisor
and if they can't answer them off the cuff,
that's a red flag.
And they're listed in my book that I'm gonna gift you
here at the end.
How do I stay balanced with my investment portfolio?
Yes, you balance it between four different buckets.
I'm not telling you to put 100% of your money
in the tax free bucket, even though some of our clients do.
We've taken many couples from a highest tax bracket
to 0% tax bracket.
But I would recommend between 40 to 60%
of your retirement income,
not even show up on your 1040 tax return.
The IRS will know you're receiving it
but they'll know it's tax free.
And we talk about it in that episode.
So, that's 21 basic episodes that you can watch
but your advisor ought to watch the same episodes
that I recorded for them.
And if they don't, then you may wanna rethink your thinking.
Now, there's 10 additional bonus ones
and these are the advisors that I point my students to.
They also learn how to make their clients immune
from the negative impact of taxes,
inflation and market volatility.
They become a tax-minimization specialist.
They help people understand that the missing structure
between the strivers, arrivers and thrivers
because you want to be able to thrive
and not outlive your money.
The advisors that watch this episode
understand that at retirement planning
is something totally different
than maybe what you did for your retirement planning
and how to solve the IRA 401-K dilemma.
You're not saving tax by continuing to defer
and take out RMD's, required minimum distributions.
The fifth episode, these are bonus episodes,
how to help clients do a strategic rollout, not a rollover.
Get your money out of those IRAs and 401-Ks
sooner than later,
strategically get the taxes over and done with,
reposition your money
into something that's gonna be tax free from now on.
A portfolio of IUL contracts
and you'll enjoy tax free income forever after
and not outlive your money.
Then the last five bonus,
how to teach using real stories that people can relate to
'cause some people learn more or better by stories.
And examples of how a strategic rollout works
because if they don't do that, they're gonna miss out
on saving 1/4 million, a 1/2 million.
We saved one couple 1.2 million of unnecessary tax.
Understanding how money works.
How to become your own banker.
If you like the banking concept,
you do it with IUL, it's like bank on yourself on steroids.
Number eight, how to help people get out of debt
the quickest, smartest way?
It's not by sending extra principle payments
against your mortgage.
Keep real estate equity separate to increase liquidity,
safety and rate of return.
Many successful real estate investors use IUL
as their repository, their working capital account,
to keep their money liquid and safe,
instead of just plowing it back into the mortgage
and then they lack liquidity when something happens
in the market.
And I can tell you horror stories
about people who didn't learn that.
And then finally, how to perform strategic rollouts
and offset some or all of the tax by creating new deductions
or resurrecting deductions
that maybe your clients had been killing
'cause they didn't know what they didn't know.
Now, those are the 31 educational videos
that are an absolute must watch.
In fact, the ones that I do for financial advisors
in a group called IUL Insiders.
Before they can watch the second episode,
they have to answer correctly five to 10 quiz questions
on the first episode or they cannot watch the next episode.
They must answer the questions correctly
or understand the proper answer
before they can go to video two, video three
and they do that through 31 videos.
If they do not end up
answering 150 some odd questions correctly,
they're not allowed to watch the rest of the videos.
Don't you wanna work with an advisor
that has correctly answered those 150 questions
to optimize your assets and minimize your taxes?
Then maybe you wanna point them to IUL Insiders
so that they understand and learn something
because you can watch these episodes
and you will know more than they do.
And I've seen this happen over and over again.
So, folks, if you want to learn your first step,
besides watching the episodes on this channel,
is to claim your free copy of this book, "The LASER Fund."
It's 300 pages.
It retails for 20 bucks.
I will gift it to you free.
Here's how you claim your free copy.
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,
I cover the rest of that cost and I pay for the book.
I'll fire out a copy to you.
Now, if you'd like to listen and learn
and watch and learn,
there's options there for doing that.
There's even an 18 hour masterclass
and check out some of the online events
where we teach educational webinars
and so forth about these concepts.
But this is about you
and I hope that you will learn
and then that you will be able to find an advisor
who understands how to help you implement these concepts.
'Cause you do have to go through a licensed advisor
but I don't want you to make mistakes
by choosing the wrong advisor
or those that are not proficient.
Those are the saddest stories I ever hear.
(upbeat music)