- What are the steps to establishing a tax-free LASER fund
for your financial goals?
In this educational episode,
I'm going to address, how do you open a LASER fund?
What's a LASER fund?
It's a max-funded, indexed universal life insurance contract
that is structured correctly and funded properly
so you can use it for all kinds of financial goals.
And people ask, how do I open one of these things?
I'll explain next.
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So I'm Doug Andrew.
I've been helping people optimize their financial assets
and minimize taxes now for nearly five decades,
48 and a half years
as of the recording of this video episode.
And so if you've watched very many of my educational videos,
my favorite financial vehicle or instrument
that allows people to accumulate their money
totally income tax free
and then they can access money tax free,
not just at retirement but even long before retirement
for their business
or for their kids' college funding, whatever,
any goal five years or longer down the road.
They can access money totally income tax free.
And then during their golden years,
they can turn on tax-free income
and every million dollars they accumulate
in a portfolio of LASER funds
can generate usually 80,000 to 100,000 a year.
That would be 8% to 10% payouts
for the rest of their life,
usually without depleting principal,
totally tax free.
And when they ultimately die,
anything that's left in there
transfers and blossoms and transfers tax free.
Now when I say blossom, it just means it increases in value.
If I died tomorrow,
I'm right now just about 70 years old,
every million in a portfolio of LASER funds
would blossom to about 2 million,
about double that and transfer tax free.
There's nothing else
in the Internal Revenue Code that does that.
So my favorite vehicle is what I call the LASER fund
because LASER's an acronym
that stands for Liquid Assets Safely Earning Returns.
So I want my money liquid so I can access it when I need it.
And two, I want it safe,
not only safe because of the institution,
the last domino that would fall
if the total American economy collapsed.
And even if the American dollar became worthless,
of course I don't know if it would matter
if you had your money at that point.
You ought to be able to grow carrots in your backyard
if it got that bad.
But the last domino that would fall
would be the multi-trillion-dollar insurance industry,
which is not only the backbone of America
but the backbone of the world, okay?
This is where banks and credit unions put their money.
They would be failing
far before the insurance industry would begin to fail, okay?
And so you would have a lot of forewarning
to access your money, but if it gets that bad,
I guess, like where would you put your money?
Some people say, well, gold and silver.
Well, at the end of the day,
you can't eat gold and silver either.
So you've got to be able to convert it into those things,
food, clothing, shelter that you need to survive, okay?
So I put my serious cash into vehicles
that pass the liquidity test, the safety test,
and then I want to earn a rate of return
that will be equal to or greater than
the inflation rate at any given time.
And I've always been able to outpace the inflation rate
by using max-funded, indexed, universal life.
When inflation, in 1980, hit 10%, I was earning 15.5%.
In the year, from 2020 to 2021,
and when inflation actually hit about 15%,
the real rate of inflation,
many clients were earning 25% and 61%.
So that's why it's my favorite vehicle.
Now if you are going,
golly, I've never heard of this before,
be sure and search on this channel, subscribe.
I have a lot of educational videos
that talk about the merits
of max-funded, indexed, universal life.
And when it's structured correctly and funded properly,
it qualifies to be called a LASER fund.
It passes the liquidity, safety, rate of return test
with flying colors and it's totally tax free.
And so when you do it correctly,
you're grandfathered under the Internal Revenue Code
under three sections to accumulate money tax free
and be able to turn on tax-free income
or access it for any need,
and when you die, it blossoms and transfers tax free.
And so people then ask,
well, how do I open one of these things?
How do I set it up?
Now it's sort of interesting
because they'll use a term like how do I open a LASER fund?
Because when you would go to a bank or a credit union,
you would walk in and say,
I need to open a checking account.
Well, we'll use that term, how do you open a LASER fund?
But it's really, how do you establish one?
How do you create one?
How do you qualify for a LASER fund, okay?
So in this episode, what you have to do,
because this instrument requires
that there is life insurance on an individual
and that individual has to qualify for the life insurance
because life insurance is the vehicle
that allows you to accumulate the money tax free
and then be able to access the money tax free,
and when you die, it blossoms and transfers tax free.
Now most people who would come to me
for nearly five decades,
they wanted to put their money into an instrument
that would give them liquidity, safety,
rates of return, and it was tax free.
They weren't really coming to me wanting or needing
life insurance per se.
They didn't object to the life insurance benefits.
I've never had anybody turn down a life insurance benefit
if somebody died.
We don't object to the benefits.
If your employer offered you free life insurance this year
as a company benefit,
most people would say, oh, thank you, how much can I get?
Yeah, I'll take as much as I can get
if it's not costing me anything.
Well, nothing's free.
But when you structure it the way I'm gonna talk about here,
the insurance is coming along for the ride being paid for
with a minuscule portion of money
that would otherwise go out the window in unnecessary tax
if you put your money into traditional accounts,
like IRAs of 401ks,
where you would have to earn 15% to net 10 after tax
when you start withdrawing the money.
In a LASER fund, I only have to earn 11 to net 10
and I've done that many, many
at 10 and 20-year periods, okay?
That 1% is not tax.
It's the cost of the insurance
that the IRS says has to be there
in order for it to be tax free.
But if I earn seven, I can net six.
If I earn 10, I can net nine.
If I earn 25 one year, I net 24
over the life of the contract
because that's not really a cost.
It's a benefit, if you understand what I'm talking about.
So insurance is involved.
So I'm gonna simplify this.
There's basically five parties
when you set up an insurance contract, okay?
And an IUL is an insurance contract
with an insurance company.
So the insurance company is the insurer, okay.
Now if an insurance company
is going to set up a life insurance policy,
even if you're designing that policy
the way I'm talking about,
where you're taking the least amount of insurance
that the IRS will let you get away with,
and you want to put in the most money or the most premium
that the IRS allows
so it turns into a tax-free cash cow,
you still need to qualify for the amount of insurance.
So let's just use an example.
Let's say I want to reposition in the next five years
$500,000.
I could set up a LASER fund to accommodate 50,000,
500 bucks a month,
500,000, 5 million.
Let's just use 500,000.
So if I want to sort of be grandfathered
to be able to put in up to 500,000,
the IRS said, well, if you want to have tax-free access,
the fastest that you can put in that 500,000
would be about 20% a year.
I'm just gonna be very general here.
At my age, I could put in about 100,000 a year.
And if I put in 100,000 a year for five years,
I now have my 500,000 in there and I've max funded it.
I can't put any more in.
If I did,
the insurance company would be forced to refund it to me.
Now there's no limit
to what that half a million can grow to.
The half a million,
based upon my actual average returns historically, 9.62%,
will double every seven and a half years.
A half a million would double
to a million in seven and a half years
and then double to 2 million in another seven and a half.
And then to 4 million, then to 8 million.
Yeah. In 30 years, 500,000 can grow to 8 million.
And we've had clients who have achieved that
totally tax free.
So when you're structuring a LASER fund
or a portfolio to do that,
you could buy a lot of life insurance for $500,000.
That's not the objective.
You want the least amount of insurance.
And so if you're 60 years old, it might be twice that.
If you want to be able to put in 500,000
and have it be tax free as it grows
and when you access the money,
the amount of insurance required might be a million.
But as you put in that 500,000,
that qualifies as part of the million
and so the insurance company is only gonna charge you
for the net difference.
And as that 500,000 doubles to a million,
you're self-insuring.
You can learn about this on this very channel.
So the actual cost of the insurance,
even as you get older, is going down.
But coming back to qualifying when you open one,
you have to justify.
It's called the reason and justification
for a million dollars of life insurance
because the insurance company underwriter knows,
well, you don't have to put in 500,000
into this million-dollar policy.
You could put in 10,000 bucks, and if you died,
they're on the hook to pay out a million, okay?
And so even though you intend on putting in 500,
and they're only on the hook for the remaining 500,000,
nonetheless, you don't have to.
And so they have to make sure
that you qualify for a million.
What does that require?
Well, the insured, who has the insurance on them,
the insured has to prove that there is an insurable interest
between them and a beneficiary that's named
when you're actually underwriting the policy
when you're taking it out, when you're opening it.
So let's say I was opening one
and I was naming my wife as a beneficiary.
I have to prove that if I died,
my wife would suffer economically by virtue of my death
or my children or my trust or whatever.
And so you have to prove when you open one,
that there is an insurable interest.
There's a reason and justification
for, let's say, a million dollars of death benefit.
And because somebody's gonna suffer economically,
by that amount, if I happen to die sooner than later.
And that's very easy to prove when you've got a spouse,
you've got children or what have you, does that make sense?
And so there is the insured and there's the beneficiary.
Now the owner of the IUL policy is usually the insured
but it doesn't have to be.
So when would you maybe own one and you're not the insured?
Because sometimes the owner can't qualify
for the life insurance.
Maybe they've had a heart attack in the last year.
By the way, you'd be shocked how many people do qualify
even if they've had a heart attack or episode
or diabetes or what have you.
So don't rule yourself out,
because even if you are insurable and you get rated,
you can squeeze down the death benefit low
so the cost of insurance doesn't cost you
at age 60 or 70 any more
than a 20-year-old athletic marathon-running female.
You can learn about that on this channel.
And also by reading a book
I'm gonna gift you here in a few minutes
at the end of this episode, so stay with me.
But if the owner of the policy
cannot qualify for the insurance,
the owner can own an IUL policy
on a surrogate like their spouse or their kids.
So it's the owner of the IUL policy
that gets all the tax-free growth
and all the tax-free income.
So you don't have to be the insured to be the owner.
There are many people that own them
on their spouse, their kids.
And so think about this.
You have the owner, you have the insured,
they're normally the same, but they don't have to be.
You have the premium payer.
That's the one who's putting the money in.
Well, I've had grandma and grandpa
paying premiums into a policy on mom or dad
and the kids are the beneficiaries, okay?
Or a trust or whatever.
And so you have the insurer, the insured,
the owner, the beneficiary, and the premium payer.
They can all be different parties,
even though normally the one paying the premiums
is the owner and is the insured.
They don't have to be. Does that make sense?
So how do you open one?
You go to a licensed professional.
You have to go through somebody who is licensed.
If you went straight to an insurance company and said,
I want an IUL,
they would send you to somebody who has a license.
And I would be a little bit worried,
because unfortunately they may send you to somebody
who does not understand
how to structure them correctly and fund them properly.
Just having an insurance license
does not mean you know how to do it correctly, believe me.
And so you have to go through a licensed individual.
You fill out an application.
And you have to approve
that there's a reason and justification
for the amount of insurance applied for.
You can qualify for insurance
based upon a factor of your income when you're young,
maybe 30 times your income.
When you're older
and maybe it's only eight or 12 times your income
or maybe it's one times your net worth.
You have to qualify financially by guidelines
and you have to qualify health-wise.
Once you get that taken care of
with a specialist who knows how to do this,
if you get approved, then you have the policy
and then you can begin to fund it.
You can minimum fund it.
You could put in 5,000 and 10,000 or you can put in 100,000.
They're very, very flexible.
But the most, in this example,
if you took out one that would accommodate 500,000,
would be maybe 100,000 per year.
If you try to put in more than that, it would create a MEC
and it would not be tax free when you access it.
So you want to go through a specialist
who understands the parameters
so that you're optimizing it
and minimizing the taxes and also the costs and the fees.
But it's actually pretty simple to open one
but sometimes they have to get your medical records
from the doctors' offices that you've seen.
And sometimes they take a month or more
to send medical records
because the underwriter of the insurance company
is gonna check out and make sure
that you're qualified from a health standpoint.
Does that make sense?
So you talk to an IUL specialist.
They will fill out an application. Create illustrations.
They will justify it by health
and by your income and net worth.
And then once you get approved, you're off and running
and you can begin to fund it in accordance to your plans
in compliance with IRS rules
to accumulate your money tax free,
access your money tax free,
and when you die, it will blossom and transfer tax free.
It's an incredible tool. It's my favorite vehicle of all.
So if you wanna learn more about this,
I want to gift you a copy
of my most recent best-selling book called "The LASER Fund."
It's 300 pages jam packed with information.
200 pages is on this white side.
It's for the left-brain learner.
It has all the charts and graphs and explanations.
If you're more of a right-brain learner,
you flip it over to this side,
about 100 pages, 12 chapters with 62 actual client stories.
And you don't have to pay $20 on Amazon for this.
I will gift you a copy.
Here's how you claim your free copy.
You go to laserfund.com.
Click on the link below, laserfund.com.
You contribute a nominal amount
towards the shipping and handling.
I'll cover the rest of that
and I'll fire out a hard copy to you.
There's also options there
if you would like to listen and learn, watch and learn.
We teach online webinars for your education.
Of course, there's this YouTube channel.
I want you to subscribe to the channel. It's free.
I post a new educational video almost on a daily basis.
But this is about your brighter future.
While you're in that website,
you may want to set up a time to pick the brain
of one of the top IUL specialists in America that we train
to see how this may benefit you
and how easy it is to open up a LASER fund correctly.
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