All right, guys, I'm going to be reacting to exposing IUL, the insurance scam, destroying families, some big statements right off the bat. This is a six minute video. I'm going to be watching this. I've not seen this before, and I will do my very best to wait to the end to give my final thoughts. But I may react throughout the video, depending on what is said. Universal Life, also known as Infinite Banking and IUL that nobody talks about. I'm going to break it down for you as simply as I can. And please excuse my very poor handwriting. So when you purchase an IWO policy, you are actually purchasing two products in one. And so if you want to go ahead and consider that in this product, there's a breakdown. Some part of it is going to be an index type fund. That's what the I is, index universal life. And so it's going to mirror something like the S&P 500 or another large broad index. And then the other part of it is going to buy insurance. And this is the part that pays out in case you die. But it goes a little bit further than that. So let me dig into it, okay? On the life insurance side, you're going to see a little chart here. They use what's called annual renewable term or ART, an annual renewable term, as you might have guessed, renews annually. So every time a year goes by, you get older, your cost is going to go up because life insurance cost is based on two things, age and health. And so if you started off over here, let's say you're paying $200 a month. That breakdown might end up being $20 over here at the beginning, and your investment portion is going to be not $180, but it's going to be $200 minus the $20 minus all of the fees. I'm talking agent commission fees. I'm talking marketing fees. I'm talking shuttle funds, mortality fees. Everything that you can imagine is going to be subtracted first. Clearly stated in your policy, but in a way the average person could never understand, of course. Then what's left over is going to go into that index fund. So here's what happens as time goes on. Your cost of insurance is going to rise every anniversary. And so at the beginning, since the cost of insurance was so low, you're going to have money in that account and it's going to look pretty good. But the older you get, your cost of insurance goes from, let's say, 20 to 30. It's interesting because a lot of IULs don't have money early on because of the fees, because of maybe how it's structured. And so it's just a... Just noting that. But yes, I'm tracking with what you're saying. 50 to 100. At some point, it's going to cross $200. That's your monthly premium. And then what happens? Well, you either pay more out of pocket or it starts to dip into this. Think of a little kind of bowl or a spoon that's digging into it. And it's going to take this money to pay for the life insurance. And so what you'll see is as clients get older and older and older, this policy that started off strong, this idea that they would be their own bank, well, their bank account, this investment portion is gradually depleting until they're left with a choice of cancel and take out what's left, borrow against it and pay interest on my own money, or just hope it stays in force and probably going to see it lapse and cancel one day. So what you could do instead is very simple. I'm just going to stop right there. And, you know, I can already see some of the comments saying, OK, like you're this could be a little bit misleading because you're not talking about level A versus level B and how these things could be structured and overfunding. And I'll just I'll just remind everybody watching there is a difference. There's a big difference between people that are working with advisors and teams and family offices. I know some remarkably intelligent humans that have teams that are doing IUL, that are structuring things well, and they're doing it for not only death benefit buys, but they're doing it for potential cash value efficiency, and they're monitoring it, and they know some of the pros and cons of this. I'm not talking to you. Notice she uses the premium $200 a month. Majority of people in the space are funding policies over. 85% or more people are not going to be in the business. So the person that set up the policy for you is not going to be in the business statistically. A lot of times you're not fully educated. You're seeing this as an investment, which insurance should not be used as an investment. It's not funded properly from the beginning. Ongoing, you're not having conversations about how the caps should be and how the death benefit should be. You're not monitoring corridor of insurance. And so. I just want you all to know, I don't know this person's spin, if they're into insurance or they hate insurance. But what they're stating is why I am very cautious with IUL for the masses because it looks and it can sound sexy. You can do some crazy things even from an income standpoint using IULs. you know, it's a dirty word to say guarantee, but I can guarantee that it's not going to perform that way. And in almost most cases, it's going to perform way worse and could blow up in your face for what she's saying. And I'm also saying that not all the IUL is going to blow up in your face and it's bad. And if you know what you're doing, there could be an argument being made to why you would want this product. But overall, I am agreeing with what she's saying for the most part. You could buy an inexpensive term policy. for as long as you need it, which is until your dependents grow up, or you can retire because you have enough money of your own. For most people, it's going to be somewhere around 65 years old. And with the money you save, since term costs on average one-fifth the amount per thousand in the United States, you could invest the four-fifths of that for yourself into a tax-deferred or tax-free account like a Roth IRA and experience real market returns. Hey, there's one more little thing I want you to know. This is not an equivalent strategy because the index fund over here in an IUL policy has what's called a cap rate. Has anyone heard of a cap rate? It means that if it goes negative, they're going to buffer you or you might not lose if the stock market goes down. But when it grows, you only experience the cap rate, which in most is going to be at most 8%. It can be higher than 8%, but 8%. percent. may be accurate for some of these insurance companies that are selling to the masses that probably should be buying. Many of them, it's lower. I've seen 5.5, 6.5. I wonder if she's getting mixed up with index annuities, but that's pretty bad. If the caps are that low, you could almost make the assumption that the policy is going to blow up. I'm not 100% sure if she's got that right. I want you to go ahead and Google S&P performance in the last 10 years, average per year, and you'll see how many years you would have made eight. And someone else being that company would have made the difference. So what does that all mean? It means that your profits are limited because of the cap. It means that your insurance is very expensive, which means you're getting less coverage than you probably need, right? And finally, it means that there is a better option for the majority. of people out there who are looking for protection and peace of mind for their loved ones and for an opportunity to build wealth and independence for the day that they get to retire and enjoy that money. So let's say you're watching right now and you have an IUL policy. Your natural question is usually, how do I get out of it? So let me give you a couple tips, and every policy is a little bit different. But one, you call the company who issued that policy, not the agent. The agent could convince you a million things, but you need to know the only thing that is legal and enforceable is the application and the policy itself. So you need to call that company. If you need someone licensed on the phone as a third party, you are allowed to do that. Like I could call with you. You just have to tell them I'm with you and you're going to ask questions. You're going to ask, what's my cash value? Can I take it out? What are my options to get out of this policy? And I hope... That is not the case, but in some, you need to know that there is a surrender fee that would go against it. And so to summarize it for you, I just want you guys to know that if you're in a bad product, staying in it doesn't make it better. They may convince you, wait six more years, you'll be out of your surrender fees. But in almost every case, if we do the math, you'd be better off to cut your losses and move into better, simpler products now. So. Get in touch with someone trusted and licensed, an expert in this industry. You are welcome to reach out to our team for some guidance in this topic. And make sure you feel comfortable and knowledgeable about what you have and what you're trusting your family's security to. All right. Nicole, if you're watching this video, great job. And I believe your channel is going to take off. I really do believe that because you have an awesome ability to communicate, love the drawings, and it's going to be fun to see. you grow. And so if you're watching this and you want to reach out, please, please reach out. Maybe we can do a collaboration. Here's what I'll say on the points that she makes is, yeah, for the most part, I 100% agree. I'm not a fan of people investing, period, using that language at all when it comes to life insurance. That is one of the reasons why we use whole life insurance is if you're going to use life insurance, it's not as an investment. It's a place to store, protect, utilize your capital, giving you actual planning options. Not that the policy itself, we're not relying on the policy itself to provide income, but the policy could potentially help other assets. And so there's a big, big difference between someone that's like, hey, I want to properly plan and I got money over here and money over here in real estate and business and I'm utilizing insurance as a portion of my portfolio to understand how this whole thing works in retirement. Or there's also a difference between someone who's an entrepreneur and has large sums of capital. And they're like, hey, I want to store my money in life insurance. But if I'm going to go that route, I'm going to make sure that it's I'm heavily liquid, very flexible. And I'm also going to limit all these unnecessary things that potentially could get in the way that sound maybe really good, but could end up biting you in the butt. And so overall, I think for majority of people in general, they should not. put their money in permanent life insurance. I think term insurance, invest a difference. I 100% endorse that strategy across the board. I think once you're maxing out your Roth IRA, once you have $10,000, maybe $15,000, maybe $20,000 a year that you're wanting to save in addition to that, and you're starting to say, okay, where do I want to allocate? There may be a world where you look at insurance as a potential bond alternative to your... to your portfolio, or if you're an entrepreneur, you may want to put some of that money in as like an opportunity fund to reallocate into other investments. But note that insurance in both of those scenarios is not going to take or replace investments. I think overall, majority of people are misrepresenting themselves. They're overhyping, they're overpitching. And in the most cases across the board, in IUL and whole life, you know, in 20, 30 years, if you look back and you say, Was this a good idea or bad idea? I think what you would end up saying is if you relied on this as an investment, is that if that was your mentality, like I'm hoping that this outperforms my investments, I think you're gonna be pretty disappointed. And I think if you understand how these products work in planning, I think it could be, I think it could be, you could look back and say like, hey, I'm really, really proud of this and understand this. And if you understand. as a protection first aspect that ultimately allows you to do other things. I think that could also be something that, you know, elevates you overall. But yeah, for the most part, I'm very, very much on board with what she's having to say. And I think mark my words, I think her channel is going to grow and it's going to be fun to see you, Nicole, grow. So love to hear your thoughts. You let me know if I may be too harsh on... the business as being our main thing at Better Wealth. I mean, we do lots, but our main thing that we're known for is permanent life insurance, but it's not for the average person off the street putting $200 a month. In fact, our limits eliminate 80% or more of people just to work with us because number one, we're not the right fit for a $200 premium. And then the other thing is, I'm not convinced that it's even the right fit for them to do that. They should... insure their family first and potentially invest or potentially just save and build an emergency fund. I think that's another super underrated thing is if we're dealing with a couple hundred dollars a month, I also want to look at what is your debt situation? Are you properly insured? Because in a lot of cases where, you know, we're one tragedy away from going backwards in a major way? And is there other investments that we should... be starting first and foremost to get everything off. So overall, again, we'd love to hear your thoughts. Subscribe for more content like this. We got some really fun interviews and other pieces of content in the mix. So if you're not subscribed to our channel, please do so. She didn't mention at the end, I'm not sure if we're going to be playing it or not. Like if you have this policy, what you should do. And I do think you should talk to someone that understands what's going on. I do think before you cancel the policy, I would talk to someone who's um understands what's going on, because what you could do is you could do what's called a 1035 exchange and exchange a potentially poorly written policy into a way better policy. And all of the, quote unquote, benefits of insurance transfer over, including the tax benefits. And so I'm not saying that, you know, again, if you're sitting with a $200 a month premium, you probably will just be better off. Let's get term insurance. Let's not worry about that. But you may even be a an ideal scenario for life insurance, but you could be in a policy that's not optimally designed instead of canceling and maybe even starting over, it would be a huge mistake and could cost you a lot. You'd be much better off having someone analyze that and seeing what it would look like to transfer that over and then comparing that to canceling in general. I will. The last thing I'll say is the whole buy term and invest a difference sounds good in a theory, but you also have to ask, OK, invested the difference. What is the end goal? What is the end goal? A lot of times it's to retire. Okay, a lot of times people don't have a retirement or income strategy. And so you wanna be very thoughtful as it relates to that. If you're just getting started, you don't have to worry about it. Let's just start having habits. But if you're starting to invest money and you have a portfolio, you have to ask yourself, what is the outcome? What is the goal in these investments? And you've gotta make sure that you're optimizing it. And for that reason in planning, it may make sense to have a portion of that. in a life insurance or another type of asset that can help when it comes to income. That's all I got, guys. I'll see you on the next video.
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