IUL
What year was the IUL Created
1997
What are the two types of FIA's?
1. Growth/Accumulation
2. Income for life
How do you determine a client's insurable needs? describe it
DIME
What is the Tax Code that makes Life Insurance Tax Advantage?
IRC 7702 A
What are the 6 Steps to Financial Independence?
1. Cass Flow 4. Proper Protection
2. Emergency Fund 5. Building Wealth
3. Debt Management 6. Preserving Wealth
What is the difference between Level, Increasing, and Graded/Optimal Switch in an IUL?
Level: Death level stays the same throughout the years of policy.
Increasing: Death benefit increase as cash value increase in later years.
Graded: switch from increasing to Level at age 76.
Optimal Switch: Death benefits start increasing then it becomes level automatically
What is the "Target Market" for Rollovers?
Age 40-45: Good Rollovers
Age 46-59: Great Rollovers Market
Age 60-72: Best Rollover Market
What are the 4 Living Benefits? give an example of each
1. Critical illness
2. Chronic illness
3. Terminal illness
4. LTC illness
When did the Tax Code IRC 7702 A come out? What else did Congress create that same year?
-1913
-The Federal Reserve System
What are the two methods to pay off Paying Debt?
1. Snowball Method
2. Avalanche Method
What are 5 Benefits of an IUL
1. Compounding Interest
2. Probate Avoidance
3. Living Benefits
4. Loans & Withdraws
5. Retirement
6. Tax Advantage
What are 5 Benefits of an FIA?
1. Guaranteed no Principal Loss
2. High Rates of Returns
3. Indexed Growth
4. Pension like Payout
5. Bonus 10-30%
What are the 5 Benefits of a Term LB?
1. Flexible
2. Convertible
3. Living Benefits
4. Affordable
5. Probate Avoidance
What Tax Code makes Life Insurance Tax Deductible?
IRC Code 162
What is the Rule of 72? Give one example of how it works for you or against you.
Rule of 72: How long it takes your money to double based upon interest being earned.
What are the two things that has to happen for an IUL to perform at its max capacity?
1. It has to be structured properly by the agent
2. It has to be funded properly by the client
What is the difference between Qualified and Non-Qualified accounts? Give examples of both!
Qualified: are Retirement accounts. Any account that has the 59 1/2 and RMD. ex: (401k,457,403B, TSP, TSP, IRA, ROTHS)
Non-Qualified: Money coming from a non-retirement account. ex: (Stocks, Brokerage Accounts, Cash, CDs)
What are 2 benefits that are in a Term LB and also an IUL?
1. Probate Avoidance
2. Living Benefits
3. Tax-free death benefit
What is Tax Code IRC 7702 B?
Tax-Free Long Term Care
What are the two things someone can have in place for Estate Planning?
1. Will
2. Trust
Who created the IUL and Why?
E.F. Hutton created the concept of the IUL. Transamerica was the first company to offer the product.
How do you know you can Rollover the money?
-Age 59 1/2 or older
-They are Retired
-Money is in an Old account (previous employer) Inheritance, cash, IRAs, Divorce money, stocks, any money outside of current employer/active annuity.
What is the difference between the old kind and the new kind of Term life insurance?
Old Term: Expires and only pays out if you die.
New Term: Convertable W/I a certain year depending on the product, has LB, Level premium, Can add riders.
What tax codes allow Tax-Free Growth, Tax-Free Withdrawals and Tax-Free Beneficiary Death Benefit?
What years did these tax codes come out?
-IRC 72 (e) TEFRA - Tax-Free Growth 1982
-IRC 7702 DEFRA - Tax-Free Withdrawals 1984
-IRC 101 (a) TAMRA - Tax-Free Beneficiary Death Benefit 1988
What's the difference between average vs actual rates of return? give example
AVERAGE: Add up all of your years and divide by the number of years = Avg rate of return.
ACTUAL: The actual gain or loss an investor experiences on an investment or in a portfolio (the actual amount in the account). It is also referred to as the internal rate of return (IRR). The losses hurt you more than the gains help you.