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Indexed Universal Life Insurance (IUL) vs Whole Life Insurance Which Is BETTER? - YouTube
Channel: LIFE180
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hey everyone it's cable balloons here the author聽
of the and asset I am here in Arizona and a life聽聽
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180 studio with my good friend Chris Kirkpatrick I聽
guess and what we're gonna do is we're gonna break聽聽
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down a common question it's i UL versus whole聽
life I wrote a book on a strategy on how you can聽聽
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over fund whole life use it as the best place to聽
save your money have that money grow the rest of聽聽
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your life be able to utilize it to buy the things聽
invest in the things that you care about have it聽聽
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show up powerfully in retirement protect the most聽
important asset which is yourself and what I found聽聽
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is a lot of people are actually using my book to聽
promote their product when I'm and a lot of it is聽聽
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indexed universal life it's definitely the most聽
popular thing being sold on the market right now聽聽
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and there's a lot of things that you need to know聽
about this I will openly say I don't want don't聽聽
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want you using this strategy using IUL and the聽
hope is that we can just have a conversation as聽聽
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it relates to how that works the difference聽
and the reason why Chris is here is and you聽聽
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can kind of share your story yeah absolutely but聽
you used to sell a lot of this and you were gonna聽聽
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root for you mix universal life and I think we聽
need to be fair it's not for us to just say it's聽聽
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all bad it's all garbage would be very ignorant聽
yeah and I already know that this video is gonna聽聽
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get a lot of comments yeah and so I want to be聽
open-minded as well but I also want us to take聽聽
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a step back and really think through not just what聽
the illustrations look like em hmm but like what聽聽
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is actually gonna happen in 20 years yeah I mean聽
you just hit the nail on the head so for everybody聽聽
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who doesn't know my background I used to be聽
licensed I used to sell insurance I was a head of聽聽
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recruiting in development for a fortune 1,000 life聽
insurance company broker-dealer their focus was聽聽
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i UL they were one of the top IUL manufacturers聽
producer sellers in the world and the country i聽聽
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guess because we're pretty much it on the country聽
that really focused on these so we could save the聽聽
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world but but the bottom line you know with this聽
is there's a lot of people out there that that are聽聽
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selling this as an investment and i want to say聽
right out of the gate that's just thinking about聽聽
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wrong if you've watched any of our content if you聽
ever think you're gonna buy an insurance product聽聽
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to be in like a pure investment and that's that's聽
how you're buying it or you're buying it for that聽聽
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purpose I would say you're going about it the聽
wrong way and if any insurance agent is trying聽聽
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to sell you that this should be an investment then聽
I would look to talk to somebody else like because聽聽
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they don't understand all the moving parts to this聽
so the there's a couple things here so what I'm聽聽
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passionate about well I used to go around and I聽
used to sell this before I understood what I what聽聽
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I understood and when I used to recruit people聽
and training people and and and teach people how聽聽
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to structure I you ELLs to be you know kind of聽
across the map all the different structures that聽聽
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you can do and they are very flexible you can聽
do a lot of crazy things and what I would say聽聽
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is this what I love if you've watched our how to聽
structure a whole life policy how to you know we聽聽
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got a couple different versions out there now聽
you look at the illustration and you see the聽聽
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guaranteed column and you see the non-guaranteed聽
column and they're pretty close but the difference聽聽
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with whole heck policy when you look at the聽
non-guaranteed called I could make an argument聽聽
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that the non-guaranteed column is gonna actually聽
be less than actually performs in the future if聽聽
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it may not be but there could be arguments made聽
either way the good news is that the guaranteed聽聽
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column you could get that contract you could get a聽
whole life policy utilizing the guaranteed column聽聽
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and you're never gonna be hurt right like you're聽
gonna be in a better situation and so for me one聽聽
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of the things that made my shift in my life away聽
from being an IUL advocate and turning into a聽聽
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whole life advocate was I never want to have to聽
look at my clients in the eyes 10 years from now聽聽
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when they're hit retirement right and feel like聽
I got them into a product that actually had any聽聽
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chance of hurting yeah this is what I would say聽
two things number one is when I was running the聽聽
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bank's investment determined I actually helped聽
bail out another agency and guess what everyone聽聽
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was being sold these UL policies you know and they聽
were all getting letters in the mail saying if聽聽
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you don't put X amount of money you're gonna lose聽
you're gonna lose your they saw it as a retirement聽聽
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account but like they're gonna lose their whole聽
thing well let's talk about why but then the聽聽
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second thing is I get sick and tired of people聽
saying oh I I do whole life and I and universal聽聽
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life and and for those people that are super聽
conservative they don't want to lose anything聽聽
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I put their money in whole life and everyone else聽
who has a little bit of risk tolerance Chris you聽聽
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and I have pretty high risk telling I have like聽
maybe the highest risk tolerance of a night I know聽聽
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I have a company we work with people all around聽
the country I'm investing in things yeah we're聽聽
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we're putting hundreds of thousands of dollars in聽
marketing like yeah I have a pretty high response聽聽
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but if someone tells you that they'd have no聽
clue whether - about the room because they're聽聽
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seeing life insurance as an end result yeah and聽
you will lose if you think of a product is gonna聽聽
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is going to help you long term and that's gonna聽
be the end thing Society they know do you just聽聽
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hit the nail on the head well I think it's key聽
to understand so you know going back to the the聽聽
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ultimate flexibility you can design in IUL to look聽
similar to a whole life policy right but the thing聽聽
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when you can take a whole life illustration to聽
the bank you can never trust in IUL illustration聽聽
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and I will say you can make an IU out illustration聽
look like almost anything you want it to look like聽聽
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right I mean and they can be conservative like聽
I can tell you one of the practices with with聽聽
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the company that I was with the people would go聽
in and be like okay let's be really conservative聽聽
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let's just and let's illustrate this thing at 6%聽
and that's their idea of conservative is 6% and so聽聽
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that doesn't account for the fees and you know聽
everything that goes into the IUL contract now聽聽
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that the part about this that's crazy is when you聽
get a whole life contract with a mutually helpful聽聽
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life company I should add those guarantees are聽
ironclad you are like a stockholder in that you聽聽
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know mutual company you're here but you're part聽
of it that's what that contract is with an IU L聽聽
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unlike the with a whole life the insurance company聽
takes the risk they're offsetting that risk to you聽聽
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to to the policyholder so if you look really close聽
at the details you yeah the the fees are the the聽聽
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return of 6% if that's what you're illustrating it聽
at and they'll tell you well the hurry to return聽聽
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over the past you know 80 years or 30 years or聽
whatever it is is over 8% so I'm gonna be really聽聽
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conservative and I'm gonna show you 6% some of you聽
go crazy and go like five and a half percent but聽聽
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that still doesn't tell the whole story because聽
the fees if you really look at the fine print聽聽
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they're not guaranteed they're the fees are never聽
guaranteed in those they're they're always as an聽聽
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option first of all with an IUL every single year聽
you're getting like yearly renewable term that's聽聽
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what you're doing so every single year your cost聽
of insurance goes up period and so you they go聽聽
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up but they can even go even higher because well聽
the cost of insurance goes up but then there are聽聽
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internal administration fees that they never tell聽
you about that they have complete ability to jack聽聽
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up the rates on those for you like there's so many聽
like the bottom line is we don't have enough time聽聽
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to get into all the moving parts but let's go聽
back to the philosophy I said this but I want聽聽
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to highlight it yeah whole life when we have a聽
lot of videos there's a lot of whole life that's聽聽
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not being sold - right so yeah I'm not bullet I'm聽
not making a blanket statement here sure but whole聽聽
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life the insurance company keeps the risk okay the聽
insurance company that is like in in the business聽聽
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of risk management sure index universal life or聽
universal life is what they're saying is they're聽聽
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shifting the risk over to you and that is the big聽
difference yes there's levers and fees that on the聽聽
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UL that can go up and yes the index may not happen聽
that's not even the big point you know long-term聽聽
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it's life insurance is not an investment it's a聽
place to store capital as a place to protect your聽聽
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money is it a place to it there's a lot of other聽
it's an the ultimate and after that you know and聽聽
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on one side you can have a company that's been聽
in business over a hundred years managing that聽聽
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risk taking key things off the table for you or聽
you could roll the dice and and put your money in聽聽
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something that's not an investment but at this聽
point you could just call it an investment for聽聽
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sure and and and so with iul-s I'll say this is聽
another thing that agents doing what you just said聽聽
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kind of like spark this in my brain is they'll say聽
okay the whole concept is it's you get a range and聽聽
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I don't know exactly at this very moment what聽
companies are doing but it's usually you know聽聽
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you have a floor of zero so they sell you on the聽
fact that you can ever lose money if the market聽聽
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goes down it's in an index fund so if the market聽
goes negative 20% your that your capped at zero聽聽
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on the upside you know maybe the market does 25%聽
but you're gonna be capped at twelve or thirteen聽聽
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percent or whatever that might be so so the pitch聽
is like would you be okay guaranteeing that you聽聽
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know your you're never gonna have a negative year聽
you're not gonna have those massive 25 30 % years聽聽
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but is that worth it to you if you can get you聽
know maybe an average of eight and never have聽聽
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a negative you that's the pitch right right and聽
that's in it's valid and if we just look at the聽聽
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index sure it's a valid argument absolutely but聽
that doesn't look at the fees that thing is a聽聽
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zero year for you if you buy that policy is not聽
zero because they're still fees and if you have聽聽
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multiple zero years in a row which quite frankly聽
if you have a policy for thirty forty years you're聽聽
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going to have that happen from time to time maybe聽
a couple times during your policy if you have a聽聽
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couple zero years in a row they have the ability聽
to up the fees of the administration costs like聽聽
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those fees will eat into your insurance cost all聽
the while every year your insurance costs are聽聽
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going up so that compounds the law so it's really聽
not a zero sum kind of a percent situation and聽聽
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and it's really the the idea that you never want聽
to interrupt compounding there is zero like zero聽聽
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capability for an IU L to guarantee that you will聽
never interrupt compounding even though they sell聽聽
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you on the fact that it will another big issue聽
that I see with IU L is number one a lot of people聽聽
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are selling it as a banking strip like you can聽
do this my strategy or arthas reg where we teach聽聽
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with IU oh and by the way if anyone's sharing聽
with you that you can bank with it it there's聽聽
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a added risk there because now you're you dealing聽
with a alone arbitrage and it's it's really a kind聽聽
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of shady stuff and one of the even Nelson Nash聽
the founder of the infinite banking concept was聽聽
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very anti universal life for that reason so聽
then so then if you take a step back and say聽聽
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okay I mean doing universal life as an investment聽
alternative then like how do these things perform聽聽
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in retirement because let's just say you have a聽
million notes let's just say you have a million聽聽
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dollars of cash value how are we Ellis trading聽
that in retirement and what are the risks that聽聽
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you could face when you hit retirement I mean the聽
risks are huge I mean when you talk about so so聽聽
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there's there's this whole idea of like order of聽
returns right that are that are important and when聽聽
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you retire if the market goes negative and you're聽
taking if you're using an IUL as an income based聽聽
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strategy which is quite frankly why everybody聽
buys them that's how everybody's selling them聽聽
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is based on income tax free income at retirement聽
there's all sorts of content out there on that聽聽
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and it's I would just caution you against that聽
but but what happens is and I've seen it trust聽聽
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me I've seen this so many times it's you were in聽
the business it's it's new and mind-blowing like聽聽
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it's it's it's astounding to me that that that聽
it's even legal to sell it in this way because聽聽
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so many problems happen from it and so let's聽
just say you got a million dollars in cash you聽聽
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know in accessible cash in a policy and you're聽
65 and you're looking to retire and you want to聽聽
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use that they're gonna be able to illustrate it聽
out of that and my numbers are gonna be probably聽聽
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off but the ballpark could be close enough for a聽
conversation you might be able to pull out $60,000聽聽
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a year $80,000 a year which according to Monte聽
Carlo simulations seems really good because if聽聽
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you look at all of Monte Carlo methodologies out聽
there they're looking you know if they say four聽聽
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percent distribution on a million that's a pretty聽
conservative long-term game so to be able to聽聽
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illustrate six to eight percent salad once again聽
on paper looks pretty made at tax free right tax聽聽
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rate looks pretty amazing but the problem is you聽
do that you take that money out and now the market聽聽
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goes down or like if you have if you're retire聽
in 2008 you know what happens if that's you and聽聽
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then you're 65 the cost of insurance at that point聽
in time are super high right and so it I've seen聽聽
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policies when people get into retirement that look聽
really healthy and then four years later look like聽聽
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unlicensed elite nightmare yeah you know and and聽
so once again it just comes back to the fact that聽聽
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it's just a dangerous game you know I you can and聽
the reason it's dangerous is because I you ELLs聽聽
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are so flexible and you can make the illustrations聽
look like virtually whatever you want because聽聽
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there are so many moving parts yeah and that's why聽
I like the the simplicity of a whole life policy聽聽
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because you know I'm a big believer in you should聽
never invest in anything you don't understand聽聽
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right and and you know just like I don't think聽
most people understand all the moving parts of聽聽
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most of mutual funds that they're invested in now聽
you know most fans shouldn't buy individual stocks聽聽
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cuz they do really don't understand mm-hmm the聽
companies that they're buying I think it's it's聽聽
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so easy to understand a whole life policy and once聽
again you're not really investing in it you're聽聽
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you're just storing your money you know like so聽
I I guess to kind of sum this up unless you have聽聽
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it yeah and this is what I think in all fairness聽
there's no there are people watching this that are聽聽
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in the business of universal life and I want to聽
challenge you to take a step back and say it's not聽聽
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just in theory but what's actually gonna happen聽
and like how are people actually going to use聽聽
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this that's number one and I also want to say you聽
know I've seen people in the space doing special聽聽
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universal life with high net worth people that聽
the they understand the risk and and it's going to聽聽
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serve them in some way I'm just saying across the聽
board most people are being sold and fill goods聽聽
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that number one that they don't understand number聽
two is not gonna give them the result that they聽聽
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actually want number three they're taking on a lot聽
more wrists and then they should should especially聽聽
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when there's better alternatives out there so聽
that's my summary I want to be fair yeah and I聽聽
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also know that it what well YouTube can get really聽
into a darn hole no going back and forth and yeah聽聽
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I in no way want to say things or or throw a punch聽
at someone that and so hopefully that this doesn't聽聽
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offend someone that's dedicated their life to聽
helping people but I really wanted to take a step聽聽
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back and really think through what we're actually聽
doing because even in the business that we're in聽聽
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there are practices if I really take a step back聽
and say when would I put my grandmother in this聽聽
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what I put my mom and this it helps you figure聽
out what what you should really be doing well聽聽
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and I can double that up and say that listen with聽
the company that I worked with there were so many聽聽
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good people that were selling it but with agents I聽
think it's key to understand this and if you're an聽聽
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agent watching this I would really encourage you聽
to step outside the box that you're an especially聽聽
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if you work with a company like I work with or聽
like a captive company or you have a captive聽聽
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relationship or you're really committed to hitting聽
a leaderboard with a company or something of that聽聽
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nature you you the training that you get is very聽
one-sided right so like you the information that聽聽
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you're taking in is going to be directed to to聽
achieve an agenda for that company that's trying聽聽
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to get you to sell the product you know and that's聽
exactly how it was for me for the first year and聽聽
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a half of my career was I was all about that聽
and it took me meeting with Don Blaine quite聽聽
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frankly um you know that that changed everything聽
for me so um so that's it I mean you know once聽聽
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again don't mean to offend anybody but at the聽
same time you know truth is truth you know like聽聽
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and if you if you disagree with anything I say聽
put it in the comments you know like and we can聽聽
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have a conversation about it but anyway I hope聽
this serves you I hope it helps I hope it makes聽聽
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sense if you have questions definitely feel free聽
to type them out in the comments below and also聽聽
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if you're somebody who's looking for help or if聽
you're an agent you know Caleb wants to give you聽聽
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a free copy of this thing right Rita and I know聽
it'll change your life I know it'll help you so聽聽
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definitely go to the link below if you're an agent聽
there's a special link for you if you're somebody聽聽
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who's looking for help for your for your personal聽
finances there's a special link for you go check聽聽
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it out and until next video live abundantly聽
live efficiently love live like 180 and have fun
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