IUL advocate

476 posts

IUL advocate

@iuladvocate

IULs remain one of the most powerful financial tool ever. If you disagree, let’s get to a duel.

United States Katılım Mayıs 2021

9 Takip Edilen480 Takipçiler

IUL advocate@iuladvocate·38m

Take a dollar of premium. After expenses about 95 cents goes into a high grade bond portfolio. The carrier already knows that 95 cents grows back to a full dollar on a fixed schedule. The floor is built before the year even starts. The other 5 cents buys S&P 500 call options. Index up? Those options pay the gain up to the cap. Index down? The options expire worthless. You lose the nickel. You never touch the dollar. That's the whole reason a max funded IUL credits zero in a bad year instead of going backwards. The bonds already covered the floor. The options just didn't fire. Modern A rated carriers all run it this way. The uncapped strategies simply buy a wider option spread and lift the ceiling. You're renting the upside with a nickel and guarding the dollar with everything else.

English

IUL advocate@iuladvocate·1h

Up 10 percent down 10 percent alternating for ten years. The average looks like zero. The real result is down 4.9 percent. A max funded IUL never has to recover from a down year so it ends those same ten years up 61 percent.

English

IUL advocate@iuladvocate·4h

In 2003 a 52-year-old engineer in Cleveland had a cash value policy from the 1980s sitting at a 2 percent dividend. Eighty thousand dollars going almost nowhere. §1035 is the part of the tax code that lets you exchange one cash value policy for another without paying a dime in income tax on the gain. He moved the full eighty thousand into a properly designed IUL. Inside the new policy his cash value floored at zero in every down year and credited the index gain in every up year. No annual tax bill. No 1099 in the mailbox in April. When he turned 65 he started pulling 42,000 a year out as policy loans. Tax-free for the rest of his life. The remaining balance kept compounding behind the loan. When he passes, the death benefit lands in his daughter hands income-tax-free. No probate. No forced distribution at age 73 dragging him into a higher bracket. That is what a properly designed IUL delivers. The §1035 transfer is the easy part.

English

157

IUL advocate@iuladvocate·6h

Holding an older cash value policy? IRC §1035 rolls it into a max funded IUL with zero tax on the transfer. The way we build it: premium pushed to the MEC ceiling death benefit dropped to the §7702 floor. Per unit charges fall to a fraction of what the default illustration carries. Cash value goes to work year one not year 16. The §1035 transfer is the easy part.

English

IUL advocate@iuladvocate·7h

Wendy's spiked 30% today then trading got halted mid session. That's the kind of swing that wrecks a retirement timeline if it lands in the wrong year. In a properly structured IUL the index does the moving your cash value doesn't ride it down. A down year credits 0%. The next up year resets off that same balance and starts climbing from there. Annual reset is the whole point. You keep the gains and skip the red years.

English

3.4K

IUL advocate@iuladvocate·8h

Every charge you listed is real, and every one of them is exactly what max-funded design is built to collapse. When we structure a policy at the §7702A MEC ceiling with the death benefit minimized to the §7702 corridor floor, the per-unit charge and cost of insurance shrink to a fraction of what a default illustration carries, that's the whole point of stuffing premium against minimum face. Per-unit load is a function of death benefit, so we design the death benefit down. On the loan: a participating loan credits the full index strategy on borrowed dollars while the loan charge sits flat. When the indexed segment earns above the loan rate, the spread is positive and the cash value keeps working, and the 0% floor means a down year costs you charges, not principal. That's why a properly built policy breaks even in year one or two, not year sixteen. The fees aren't the rebuttal to the structure. The structure is the answer to the fees.

English

Nicholas VanGeest, CFP®, CPFA@vangeestguy·9h

@iuladvocate It will only keep compounding if the index return exceeds the monthly policy fee, per unit charge, premium expense charge, index account monthly charge, and interest on the loan.

English

IUL advocate@iuladvocate·17h

SpaceX just raised billions in debt instead of selling a single share. That's the move every smart operator runs. Don't sell the asset. Borrow against it and let it keep working. A max funded IUL runs the same play. Take a participating loan under §72(e) and the cash value keeps crediting interest like the money never left. You spend the cash. The policy keeps compounding.

English

608

IUL advocate@iuladvocate·8h

Medicare just opened GLP 1 coverage to millions of older Americans. Worth knowing if an IUL is on your radar: BMI gets priced into the policy the day it's issued. Same height lower weight class lower rate class. Lower rate class means lower per unit charges so more of every premium dollar lands in cash value instead of cost. When we structure a max funded policy we lock the healthiest rate class we can get first. Apply healthy. Don't wait for someday.

English

IUL advocate@iuladvocate·12h

Alzheimer's care now runs past $100,000 a year. More than cancer and heart disease combined. A properly structured IUL carries a chronic illness rider built in. It lets you pull the death benefit forward while you're still alive to cover that bill. Same policy. No second exam. The money shows up when the diagnosis does.

English

101

IUL advocate@iuladvocate·13h

SK Hynix is raising $29 billion on the Nasdaq to fund its AI buildout. Big companies fund big obligations with assets that keep working not idle cash sitting still. Same idea runs a buy sell. Two partners one business. Fund the buyout with a max funded IUL and the cash value keeps compounding inside the policy the whole time it sits there waiting. Ask your partner this week how your buyout is actually funded.

English

IUL advocate@iuladvocate·14h

A MarketWatch reader gave her brother half of her $1.5 million home. Now she's worried he can force a sale. That's the thing about home equity. It sits at 0% for the owner and you can't touch it without selling the house. Cash value in a max funded IUL works the other way. Borrow against it under §72(e) tax free and the policy keeps crediting interest as if the loan never left. Liquid the entire time. That access is the design not a bonus.

English

IUL advocate@iuladvocate·17h

A hammer doesn't pay outside probate, income tax free under §101(a), with a chronic illness rider that triggers on 2 of 6 ADLs. That woman asked for three specific things: money to her sons, not her ex, no public file. One properly structured tool does all three at once. I named it. Point me to what closes that gap cleaner and I'll design around it. Until then I'm using the instrument built for the job.

English

Alan Trent@AlanTrent11·21h

@iuladvocate Your solution to every single financial problem- BUY AN IUL!!! When all you have is a hammer, everything looks like a nail.

English

IUL advocate@iuladvocate·1d

A MarketWatch reader this week: 67 wants everything to go to her sons terrified it ends up with her ex husband. A properly structured IUL settles this. The death benefit pays straight to your named beneficiaries. Outside probate. Income tax free under §101(a). No public file no multi year wait no 3 to 7 percent eaten by the process. You name who gets the check. The court never touches it.

English

236

IUL advocate@iuladvocate·21h

The No. 1 NBA draft pick will make nearly $70 million. The average NBA career runs about 4.5 years. Huge money tiny window. When we max fund an IUL for an earner like that premium gets pushed to the §7702A MEC line and the death benefit drops to the §7702 corridor floor. The cash value credits on the index. Years later §72(e) loans pull the income out tax free. The career is short. The policy isn't.

English

263

IUL advocate@iuladvocate·22h

Applying fee scrutiny evenly is the right discipline, and it's exactly where max-funded design earns its place. When we fund at the §7702A MEC ceiling and minimize the death benefit under the §7702 corridor, per-unit cost of insurance drops to a fraction of what a default illustration carries. Fees aren't a fixed drag in an IUL, they're a design variable we control. That's the whole case for structuring it right.

English

Tyler Menzer@Tyler_Menzer·17 Haz

@iuladvocate @AlanTrent11 @mbontrager5 I will absolutely criticize mutual funds for higher fees and bad price to NAV ratios and I'll criticize things like the loss harvesting direct indexing products or certain ETFs, especially LETFs 1/

English

455

Marvin Bontrager, Ph.D.@mbontrager5·16 Haz

Reality Check S&P 500 Returns: 2022: -18.1% 2023: +26.3% 2024: +25.0% 2025: +17.9%

IUL advocate@iuladvocate

Day 3 of 15. IUL Reality Check. IRC §72(e) lets cash value inside a properly structured IUL compound with zero annual tax drag. No 1099 showing up every spring to take a bite. $200,000 of cash value crediting 8% keeps the full $16,000 that year. Nothing skims off the top while it sits inside the wrapper. Run untaxed compounding like that across 40 years and the gap runs into six figures. Tomorrow Day 4: the 0% floor. Quick gut check before then, what did the S&P do in 2022 and what would a 0% floor have done sitting next to it?

English

21.7K

IUL advocate@iuladvocate·22h

Tech sold off gold slid under $4,100 the dollar hit a 13 month high. Three asset classes red on the same screen. A max funded IUL on an uncapped volatility controlled strategy ignores all of that day to day. It credits off one number: where the index sits on your annual reset date versus a year prior. The 0% floor holds the bottom. You check it once a year. Not at 3pm on a red day.

English

162

IUL advocate@iuladvocate·22h

@vangeestguy @mbontrager5 This was a comment to your request: “Careful. He’ll show index returns but not the actual…”. That kind of comment is implying to publish actual performance to X.

English

Nicholas VanGeest, CFP®, CPFA@vangeestguy·1d

@iuladvocate @mbontrager5 You’re saying this “uncapped index” historical returns are a secret until the policy is in force?

English

Marvin Bontrager, Ph.D.@mbontrager5·1d

Shoving $2.5 million into a life insurance policy at age 64 requires a massive death benefit to clear IRS guidelines. The fees on a death benefit that large at that age would completely eat the cash value alive. The IUL doesn't sit flat, it goes negative because fees are still deducted while zero growth is credited. Assuming that this 64 year old was about to retire, a fiduciary financial advisor would have assisted with a gradual more conservative asset allocation and the market drop would not have been so steep. But let's say it was left in the market from then until now, it would be worth almost $12 million today. These IUL hypotheticals are entertaining though. IUL = Illustrations Usually Lie

IUL advocate@iuladvocate

In October 2007 a 64 year old had $2.5 million set aside for retirement. By November 2008 it was $1.2 million. Thirteen months. Cut nearly in half. He did nothing reckless. The market fell 37 percent and took his retirement down with it. Now run that same $2.5 million inside a properly structured max funded IUL. 2008 credits zero. Not negative. Zero. The 0% floor means a down year doesn't subtract. The index drops 37 percent and the cash value just sits there and waits. 2009 the index recovers and his money compounds forward from $2.5 million. Not from $1.2 million. That is the whole thing. He never had to climb back from a loss he never took. Sequence of returns is what quietly wrecks a retirement. A zero you can retire on.

English

28.3K

IUL advocate@iuladvocate·1d

@vangeestguy @mbontrager5 No, you want to see returns in an actual policy. Do you recommend to screenshot an actual policy and share here?

English

Nicholas VanGeest, CFP®, CPFA@vangeestguy·1d

@iuladvocate @mbontrager5 You’re taking a long time to prepare this one. The returns must just be that fantastic.

English

IUL advocate@iuladvocate·1d

Micron and SanDisk led a sharp AI selloff today. Traders are calling it a gut check moment for the whole sector. The cash inside a properly structured IUL doesn't ride that drop. We build it on uncapped volatility controlled index strategies now. Par rates over 100 percent on the upside a hard zero on the downside. The old "your cap is 12 percent" knock describes a 1990s product nobody designs anymore. This is what modern indexed crediting actually looks like.

English

4.1K

IUL advocate@iuladvocate·1d

The example was never an allocation recommendation. It isolates sequence-of-returns risk, the one variable a 64-year-old on a short runway can't control and can't wait out. And no, the answer isn't 100 percent into a policy any more than it's 100 percent into equities. The IUL is the protected, tax-free distribution layer. Premium funded to the §7702A MEC line, death benefit minimized under the §7702 corridor, so per-unit charges run a fraction of a default illustration and distributions come out as policy loans under §72(e) rather than ordinary income. That's where the 0 percent floor earns its place: 2008 credits zero, not negative 37. No recovery years burned, nothing sold into a 37 percent drawdown just to fund a withdrawal. The math holds. On a short runway, a flat line beats a $925K paper loss every time the timing breaks wrong.

English

178

Eric Blake, CFP®️@EricBlakeCFP·1d

So many broad self-serving assumptions in your example. 1. Nobody should put 100% of their retirement assets into stocks at retirement. Especially if working with a competent financial advisor. 2. You seem to be indicating that the individual should have put 100% of their retirement assets into an IUL? This would be your “advice”? 3. Anyone that has $2.5M in retirement assets will likely accumulated the majority of those funds in a company retirement plan(s). How much comes from the employer match? Are suggesting not getting the match? 4. How much does it cost this individual in taxes by not utilizing company retirement plans? And please don’t use the max tax rate assumption for all withdrawals. At $2.5M this individual is not at the max tax rate. 5. So much more wrong with these assumptions, but did you even check your own math?

English

470

IUL advocate@iuladvocate·1d

English

31K

Keşfet

@AlanTrent11 @mbontrager5 @elonmusk @BarackObama @taylorswift13 @cristiano @BillGates @NASA