IUL
Is it tax-‐deductible?
No, however when you run the numbers it makes more sense to not pay taxes on the back end then on the front end.
What’s minimum?
The minimum annual amount you must send the insurance company to keep the policy enforced.
This sounds too good to be true.
You’ve heard of pension plans before, right? This is very similar, except it will be your own annuity or personal pension plan, not the company’s.
So what do you do?”
I meet with individuals, families, and businesses and help them make and save money.
I own an investment and insurance brokerage through the Transamerica platform.
I teach people how money works and how to build a successful business around it.
I create legal tax-shelters on people’s money.
I teach people how to beat the rate of inflation through various guaranteed strategies.
I’m a professional headhunter for a financial firm, and I’m in charge of attracting new talent to the company.
I don’t need any help right now.”
I understand; however, I really want to get together with you so that you can have a better idea of what I’m doing now. This way, in the future, you’d be in a better position to send me some referrals and help me grow my business.
Does the cost of insurance justify saving money within this strategy?
Absolutely, the potential tax savings trump the cost of insurance. Would you rather pay 7-‐15% in cost of insurance to protect your life and generate tax-‐free retirement income or pay 35-‐40% in taxes with no protection? We can run the numbers if you’d like to see how it plays out.
Can the CAPs change?
Yes, the CAPs can change; however, insurance companies must keep CAPs competitive because of people’s intended use for the cash value—retirement.
What’s a living benefit rider?
It’s a guarantee on your future retirement income.
Do I have to recruit?
Absolutely not. Within our platform you have two options to build a business. You can either remain a personal producer where you help clients on a daily basis, or you have the option of building a brokerage where you can hire, train, and develop talented individuals that work under your license much like a real estate broker does.
What is this meeting about?
I’d like to get together with you so that I can show you what I’m doing now and how I can help people financially. I value your opinion, and I’d want you to be in a better position down the road to send me some referrals.
How is it tax-‐free?
IRS Code 7702, IRS Code 72, and IRS Code 1.01(a)(p)(2).
What’s target?
Target is usually the amount that makes sense to send to the insurance company on an annual basis so that the strategy performs effectively as a retirement plan.
Can the floors change?
The floor can never be less than 0%. The floor can go up, which would be better for you.
I don’t have experience in financial services.
I’m glad you brought that up. Many of our most successful associates and leaders come from various different work backgrounds with no prior financial services experiences. (Give a few examples. Include yourself when possible). In addition, we offer a fantastic world-class training program that will more than prepare you to be successful in our business.
What are you selling? We have no money to invest.
In the first place, I’m not selling you anything. I value your opinion, and I want us to meet so that you can have a better idea of what I’m doing now and how I can really help people financially. I’d like for you to be in a better position to send me referrals in the future. Is that fair?
What happens if the insurance company goes bankrupt?
99% of the time, when an insurance company goes bankrupt, a stronger insurance company comes in and buys the book of business for pennies on the dollar. So instead of your statement saying “ING,” for example, it would say “Pacific Life.” In the event that a stronger company does not come in and buy the assets, every insurance company in California must participate in the “California Guarantee Association,” where life insurance death benefit protection covers 80% of the policy death benefit up to a maximum of $300,000.
Additionally, life insurance net cash surrender and net cash withdrawal values are covered at 80% of the policy value, up to a maximum of $100,000.
What’s Guideline?
Guideline is the maximum annual amount you can send to the insurance company while keeping the strategy tax-free.
What happens if I cancel?
If you cancel within your contract, you are subject to a “surrender charge.” The charge depends on the year you cancel, so it is important to know and understand the terms of your contract.
Is this commission?
How do you feel about commission? (WFA- If they respond they’re not comfortable with commission…) Like most advisor positions in the financial services industry, our position is production-based. However, we have a very competitive compensation package and it’s a lot more than just “commission.” It’s real ownership in your own business—a business you can sell on the open market for 3-5x its value. Plus it’s renewal and residual income (meaning you make money every year on the business you do today), stock options, bonuses, and world travel. But if you’re a little apprehensive about commission, I encourage you to take a look at our part-time opportunity.
Why do we have to meet with my spouse?”
We find that most couples make financial decisions together, and because of that, some of the things we are going to talk about just make more sense when both of you are present. Plus, I’d like for him/her to be present so that they can also have a better idea of what I’m doing, allowing them to be in a better position to send me referrals down the line.
What’s a policy wash loan?
Once you’ve withdrawn your cost basis, the way you access your money is through what is called a “policy wash loan.” It’s another component that makes this strategy tax-free because you’re not required to “pay” the loan back. You never pay taxes on borrowed money, do you? (No.) Hence the “wash.”
What’s a segment?
A segment is the equivalent of a month. For example, your segment period is equal to 12 months looking back. The interest credited is calculated based on that.
How can the insurance company guarantee a rate of return on my income? How do the insurance companies make money?
Insurance companies are among the most profitable and liquid companies in the world. I won’t get into too much detail, but in the event that the market performs poorly, they protect themselves from loss through a complex strategy involving the buying and selling of “Call Options.” However, keep in mind that there is a cap on your growth potential. So, if the market performs exceptionally well, the insurance companies make the spread between your cap and the market’s performance. Insurance companies know how to make money, and that’s how they are able to guarantee your money.
Is this sales? I’m not good at selling, and I don’t want to sell.”
I’m glad you said that! We don’t train salespeople; we train associates to show our clients what their options are for making smart financial choices. For example, would I have to “sell” you on saving money each month, sheltering the growth on your money from taxes, or making sure you save enough money to put your children through college? I didn’t think so. Let’s get together to talk about it more.
I already have a Financial Advisor.”
Great, many of our clients have an advisor already. However, what we’ve found is that not all advisors are up to date on some of the most important tax shelters out there. We are usually able to save our clients some money or enhance their overall financial plan. Would you be open to a free financial review or a second opinion?