The Retirement Truth of Indexed Universal Life

Video Transcripts - Please forgive me for the numerous spelling or grammar errors.

Alright,

back on personal pension radio and on the blog. The YouTube channel recording

the blog at the same time, as I'm doing the actual podcast recording that would

normally, just simply go up to iTunes, iheart radio, SoundCloud stitcher etc.

wherever you're listening to this podcast. Thank you thank you thank you for

your support. Really appreciate it. I talk to a client recently who I share the

podcast with his brother and that his brothers actually get in touch with me

and asking questions. I really do appreciate that. I love how small the world

is nowadays, the world is very small thanks to technology. I am broadcasting as

you can see once again from the personal pension radio workshop here in

Southern California. Yes, this is my woodshop. Those who view listen to the

show, you know that that aside from being a car guy. I am also a woodworker

currently building my kitchen. I am finishing a skateboard project for a friend

and soon to start a comic book storage unit for someone now that I work with,

so never done that before either love that stuff you heard the intro. I am the

income engineer, and my mission is to deliver that retirement dream that Wall

Street has promised for 40 years. Unfortunately, Wall Street only teaches one

side of the retirement planning journey they teach the accumulation side. The

save save save and invest invested best the idea that the answer to everything

is invest more money. That is a critical part of retirement absolutely what I

teach is both sides of the retirement journey. The idea that you have the

accumulation phase, you get to the top of the mountain and then you have the

deed accumulation phase. The downside the downhill version if you will with the

analogy, you gotta come back down the mountain. So, my goal is to not teach

everything there is about retirement income planning. I actually got a comment

to my feedback once, this guy doesn't teach anything. Why do share concepts and

strategies and thoughts on various different retirement planning concepts, but

the real key here is to ask questions to challenge things just challenge the

norm, say why is, it supposed to be done that way. Who said that's the right

way for this to be done? That's what I'd like you to get out of this podcast

sometimes yes today for example, I might share some real actionable important

items as it relates to retirement planning or protection planning, but more

importantly to get the idea that not everything is invest more money, invest

invest, invest. That's the key that Wall Street wants to tell you that if you

lost your dog. It's because you didn't invest more money if you want to retire

early you have to course, invest more money if you want to send your kids to

college and you have to invest more money. That's the answer every single time,

and I push back on that. I disagree that is not always the answer is a critical

component of most of those things, but it is not the answer to everything. So

good a jump right and actually I want to give a shout out, Say hello to kraig

listener, kraig out there in North Carolina. You inspired actually the video

blog a portion of this podcast episode. I've always wanted to, I won’t say

always, I’ve wanted to change things up as far as the podcast and do more

unique or different things with the podcast so a blog and getting more active

on YouTube is something that I've wanted to do. Now listener kraig hello again

you actually asked a great question as it relates to index universal life so

shout out to you for inspiring me to do a video of this podcast, so later in this

episode I am going to go into my computer and actually teach on index universal

life. Is a question that comes up all the time I get emails I get questions in

person; I get questions from CPAs from attorneys actually just this last

Friday. Got a question about this index universal life thing and it is

important to understand it. I have my opinions you'll see the way I teach it.

Perhaps why I have those opinions. So, we'll get into that in just a moment.

Full disclosure multiple disclosures to different disclosures in my podcast

because unlike financial entertainers like Dave Ramsey and Susie Harmon. I am

an actual certified financial planner professional. I'm licensed and regulated

and everything that I do is actually monitored by compliance and I have to

follow the rules. And one of those is to give you a disclosure that says I'm

not an attorney, I'm not a CPA, I do not play one on TV. I am a certified

financial planning professional I play one on YouTube, I play one on the

podcast, and I am one in real life. With all of that said, it is cool is my

video and my workshop is. Please don't act on things that you hear on my show

as if you're getting personal advice. You're not. You're not getting personal

advice, please seek out the Council hopefully of a certified financial planner,

a certified financial planner. I'm raising my hand. I would love to talk with

you. Remember, we can actually get together face-to-face through the miracles

of technology nowadays. We don't actually have to be in the same room. So let's

have a meeting send me an email kraig with a K [email protected]. So, with that said, let's jump in

now I already gave my shout out to listener kraig thank you so much. Now, the

deal of the week has become also a very popular segment I actually had folks

that I did not realize listen to my podcast recently in my car club that had

mentioned my Deal of the week, that I was cut a surprise like that you listen

to my podcast yes I do. So, my Deal of the week is this, is actually was an

item that I had actually borrowed. It's called R&D. I firmly believe in

R&D. So, think about that. What does R&D stand for. It stands for

rip-off and duplicate, rip-off and duplicate good ideas. So, that actually came

from a friend of mine in the Chamber of Commerce and that he had said that once

I said can I R&D that he says absolutely. I did the same thing. So, R&D

rip-off and duplicate. I believe if you find a good idea. You should replicate

it. If you can and I listen to Clark Howard oh thousand years ago, a long time

ago when Clark Howard was only on the radio. He wasn’t actually on a podcast or

anything like that. He was basically on the radio. He had a TV show for a while

now is go podcast while he had inspired the deal of the week and if I'm honest

with myself, he probably inspired my quest for lifestyle deflation. Lifestyle

deflation this idea that I always looking for a way to enjoy life without

spending full retail without spending a ton of money all the time bye-bye bye

spend spend spend and looking for a way to achieve lifestyle deflation to

actually live less expensive and still live and live well. So, that the deal of

the week and my podcast was inspired I guess by Clark Howard and my quest for

lifestyle deflation. So, this week's Deal of the week actually has, I hadn’t

forgotten about it, was kind of, it's actually more of a financial planning

tip. If you're going to be on this quest for financial independence. If you're

looking for the fire movement, for example, or if you’re looking for ways to

cut expenses. I have a friend who actually came over to my house and I just for

a quick visit, and they were stopping by. They visited they saw my kitchen

remodel that's undergone a in progress, and they also saw in the living room.

My big screen TV laying down on the coffee table and it was disassembled it was

all taken apart, and they never seen that before. They'd never seen the inside

of their own television. And she said what’s with your TV and I said well the

power went out again and I'm just trying to repair it. What! she said, why are

you repairing it. Why don’t you just buy a new one. Well that's the thing,

folks. That's our our preprogram answer and congratulations to the marketing

machine. The consumerism in the world today and the marketing machine that says

buy-buy-buy get a new phone get a new TV. You don't want that old car get get

get, buy-buy-buy and I look at her and say well, I actually fixed it once

before first snow $55. I figured I would try again. Really! She said, you you

fixed your TV? Yeah, it's it's actually literally three little screws inside

the TV a pop in a new part for 60 bucks or whatever and it worked for several

years at work now, full disclosure, I did put that new part back in to this TV

and unfortunately it's still dead and it looks like it is actually done. This

time it's done instead. But I tried and I purchased a $55 part that had free

returns. So, I sent it right on back didn't cost me anything really just drop

by the post office and stick the return in the mail, was easy. Now the whole

idea there was, why are you are you fixing it. Just buy another one. Well I

might do that with my microwave. I don't how to fix a microwave, a TV actually

turned out to be really simple and I have found the information on the Google

machine on how to fix it. So, before you get ready to throw out in this case

for a TV this size. Nowadays is still so, five, six, seven, $800 per

television. Still, how is that possible. The TV still cost this much money.

It's crazy to me. They still cost this much. This could actually cost you know

100 bucks for a giant TV because the technology has really changed. Now the TV

that in my living room is officially dead. So, my wife and I watch that much

TV. But we do enjoy watching certain things together and and I just went out on

a break from TV and then when I get there. You know when we get the mood, I'll

start shopping for televisions and looking for a clearance dealer some sort of

a bargain. Well as it would happen, I'm at Sam's Club about three weeks ago.

This is a bit a while back and I’m walking out through the exit door past the

check stands and there is one of those flatbed carts a flatbed cart with two

televisions open boxes sitting on the flatbed cart. This one was a big flat

screen TV and said open box on the outside audit is clearly an open box and

$94. $94 for a big smart TV, is a new smart TV. There was an open box I went; I

loaded a backup. I grab actually grab the tag off of it and went back to the

check stands and handed it to the ladies and said could you ring that up for me

please, and then I walked right back out and put it in my truck $94 for this

big flat screen smart television that now we have even in a different room of

our house we’re trying something different. So, the whole idea there on the

deal of the week is to hopefully inspire you, whether it's buying something a

car, TV, an iPhone whatever it or whether it's actually investing. If you're

going to go out and invest in something. Be sensitive on how much it costs.

What are the fees. What is the lost opportunity cost? Make sure that you ask

those questions before you just throw the money out. Okay! So, that's the deal

of the week segment. Now, watch your step this next step now. Literally, this

is going to be the watch your step segment. If you didn't hear last episode,

episode 224 great question from a listener about debt, tax debt release

companies are companies that advertise that they'll get rid of your tax debt

with the IRS and you can pay them to do so route I gave you my opinion on that

if you ever wondered about it. Go back and listen episode 224 now this time

literally watch your step. I mean watch your step on sidewalks and driveways

inside your house outside your house at pool parties at your house. Here's the

thing. Whenever you invite someone on your property, even if you don't invite

the what if they're the postal worker or the Amazon delivery person or the UPS

driver right you don't necessarily invite them on your property, but there on

your property. Perhaps once or twice a week right, whether it's a business or

your home. Whatever you have a pool party. You invite your your kids friends

over for a pool party. What I want you to pay attention to is watch your step

and the steps of others when it comes to protecting yourself, we live. Let me

just rephrase that, mean pull that back. The majority of the listeners to my

show. Hello everybody out there got some of Australia got some of England we

got some of the Philippines and Nigeria all over the world at that listener is

cool, but the majority of the listeners of the show are in the United States

and the United States is the number one most litigious country on earth. 95+

percent of all lawsuits in the world happened in the United States. True story

right. So watch your step when you're out there actually you know you're

working on your yard when you're tearing up the driveway when you're working on

the front yard and you leave the water or slippery grass clippings everywhere on

your front porch and a postal worker walks up to deliver a package on Amazon

delivery person walks up to deliver a package and slips on your pile of leaves

are your wet spot in front of your house because you didn't clean it up because

you wanted to run in and watch that that new TV that you bought for thousand

dollars right, you gotta go football or baseball or whatever that’s on TV right

now and you left it you didn't clean up. You didn't put any cons around it or

any kind of a blockade to prevent somebody from falling into the hole you dug

next to your front door or on the edge of your sidewalk on your lawn or

anything like that and someone falls in that whole or on your front door. Guess

who you're going to get sued by. If the postal worker falls down. Walking up to

your front door. You're looking to get sued by the postal worker you're going

to get sued by the United States Postal Service. True story happened to a

friend of mine you're going to get sued by UPS corporate because they're going

to come after you for restitution for their employees work comp claim as their

employees get to say oh my neck my back. I fell down it at that guy or gal's

house oh, there’s this whole there and I didn't see it. When, I was delivering

the package. Oh, what was mean; they’re going to file a claim for work comp,

and you know what that companies going to do? They’re going to come right after

you and your homeowners insurance and heaven forbid, it is not a severe injury.

Another true story this happened to somebody that I know somebody actually had

a construction project turned out it was probably the city. However, there was

a construction company responsible for the project and they laughed piping on

the sidewalk with no cones or barriers around it was sticking up about 4 to 5

inches that was going to be finished off. Maybe the next day they left it out

did not properly barricade the area. My friend walking her dog fell down landed

on her forearms and broke both forearms, both of them compound fractures who do

you thinks getting sued? Oh yes, the city will get sued and the construction

company will get sued and mad. I hope the construction company owner actually

has their asset protection done by a law firm like mine. Guys so watch your

step. The liabilities we face are not, you know the lawsuits we see on some

John Grisham novel type movies are no Tom Cruise in the courtroom right all

this kind of stuff. It's actually just the simple things. It's your kids having

a pool party. True story. Your kids having a pool party and one of his friends

does something super stupid and instead of jumping in the pool because all are

going to get wet. They leap to the side of the pool and smash their face into

the side of the pool and take out the whole top row with their teeth. Guess who

got sued? Yeah, the homeowner the homeowner the parents of this birthday kid

get sued for hundreds of thousands of dollars, hundreds of thousands of dollars

in reconstructive facial surgery, cosmetic dentistry. It was epic. What this

kid did in a split second it was just terrible, but these are these are good

friends of the family right. These are friends but what about family have to

do, to take care of their son, who had massive damage to his face. Yeah, they

had to say to their friends, and they won. Guess what, those friends with the

pool party they had to take out a new mortgage on their house because their

insurance was only $300,000 limit. $300,000 limit. That was it. They got sued

for a lot more than 300 grand in a they lost, which was expected. They lost in

California and kind of assume you're going to lose right just that's a better

assumption then maybe I'll win probably not going to win. So, watcher step.

Take good care, right; really make sure that you got your asset protection your

liability protection and if you're not sure that your bullet proof that you're

fully protected sent me an email [email protected].

Let me review your insurance. I'll review your business insurance. I'll review

your homeowners and car insurance I’ll review your life insurance. Make sure

that you are actually protected and you're not just fooling yourself. I can

help. Now, let’s get into a question I wanted to, this is a listener question,

but last time if you missed it, great question from someone who asked about

living trust and would I be better or cheaper just to put by my kids on my bank

accounts and on the title to my house. The answer was, well, don't do that if

you were ever asking questions about living trusted and titling your checking

account, savings account, things like that with your kids. Please go back and

listen episode 224 now this time I want to revisit indexed Universal life.

Index universal life, okay this is a type of life insurance that is cash value.

It's a cash value based life insurance product and the interest that is

credited inside the policies. The interest that is credited comes from

referencing a stock market index, please hear that again referencing not

putting your money in the stock market. No, no, no, this is a life insurance

company there actually going to use the S&P 500 as a reference point. Okay

a reference point not to put your money into that as an investment so indexed

Universal life is sold. Is this idea that you get the upside of the market with

none of the downside sounds so far sounds pretty good. That is, that initial

sales pitch, and I have a significant problem with the index universal life for

several reasons. It it's a great sales pitch and it's not as flexible as some

other types of life insurance. It just doesn't. It doesn't look like the

original projections two or three years later, two or three years after an

index universal life policy has been going. It doesn't usually look at all like

it did when it was sold to someone and I want to show you why in just a moment.

So this is going to be part where I switch over recording of course on video

and I get a splice you know put together and I'll edit this together. So I

switch over to my computer and actually teach on index universal life for

little bit. Now, thank you again to listener kraig out there that this was

something that he had asked about and I actually missed the recording so I'm

gonna make sure that I go ahead and get this thing recorded. I’m going to pause

here, get it all set up and be ready to go in just a second. Alright thank you

again to kraig. I got a and I thank you again. I got a nice illustration here.

This is an indexed Universal life illustration and I can't really zoom in too

much because it will all get off the screen, but you will see right here it's

indexed Universal life from all yachts. Now this is not at all going to be any

kind of a critique of Elian's life or anything like that. This is specifically

an education piece on what I see that bugs me with an index universal life that

makes it hard for me to sell it right because it's got great sales pitch, but I

just can't ever haven’t been able to reconcile what I know about it to then go

ahead and sell it. Okay, you'll see what I mean let's get into it. So this

particular indexed universal life policy was presented on the idea that if you

put in, in this case, let me zoom in a little bit further. If you put in $6000

per year $6000 per year that the cash accumulation value right this you can see

the difference here in just a moment you're going to see the cash value will go

up and up and up and then in retirement you can draw money back out of this

thing. It's going to be great to be awesome and you get to draw the money back

out on a very tax favored basis at all, the year the growth inside the policy

doesn't. You don't have any taxes you'll hear the sales pitch that it's just

the best thing ever. It's better than any kind of investment is better than any

you know, stock market investments. The sub sauces. So, let's just evaluate it

and I will zero in on the one thing that really catches me immediately all the

time. It's this idea right here that with indexed universal life you can

actually choose if I the advisor. I can choose a percentage index credit

remember what this product does this product says if the market goes up, you

participate in the upside you participate in the up if the market goes down,

you get a zero. That sounds good. You mean, you mean if the market goes up i

actually participate in the upside, but if the market goes down. I don't go

down with it no no that's that's what the sales pitches. Now wait, I as the

adviser I get to choose what index credit right because if the market goes up,

and by the way, remember podcast listeners. There is a YouTube video that goes

with this, go to YouTube and you just look for kraig strom income engineer,

you'll find the right there. This video will be posted, and you can actually

follow along with the episode and the visual of the illustration on the screen.

So, if the market goes up. Remember what you're doing is you're not in the

market. They use that market as a index credit observation there just got a

look at it and say the market went up all right. And here's the number 6.9%

6.90% that's what they say is your indexed amount each year in this

illustration now. Pay close attention to that. In this illustration what

they're saying is that the index credit amount every single year is 6.9%

because they don't illustrate year by year by year, they take this number and

they apply it to this accumulation value so you put in premium, premium goes in

here they apply a credit and that's what accumulation value is, but wait. Pay

close attention. The premium goes in. Now they take out charges, insurance

charges, then they apply that rate and you get an accumulation value now folks

I really I've drawn all over this thing because I got a bring your attention to

the details because the sales pitch doesn't really teach the salesperson

financial advisor like myself doesn't really teach the financial advisor to

focusing on this to really teach it this way because the sales pitch is just

keep an eye on that 6.9%. Just look at the 6.9%. Well, I can't because it's

just there's more to it. So remember one more time the premium goes in the

insurance company takes out charges so $6000 goes in and in this example, $2224

comes out in charges in the first year. And of course they apply a 6.9% to the

overall and whammo we have $4200. Now there's more. What the heck is this cash

value at zero. What is that cash value zero accumulation value is $4218 but the

cash value zero okay, here's what that is. This is a surrender charge

calculation. Now it's interesting to me that now with the way that they've

written the illustrations they do not have to put what used to be there, what

used to be, is this surrender value. The surrender value is what you get after

they charge the surrender penalty for early withdrawal. Now don't get me wrong

I'm not suggesting that surrender penalties are actually a bad thing. They are

part of these contracts of guaranteed annuities of whole life insurance index

universal life and I'll bet they're all part of it and it does make sense that

these things are not free. They cost money and the insurance companies can't

just simply say hey, we’re been on the hook for $300,000 debt benefit and if

you just want to walk away. We won't charge you anything. We've had no risk at

all. While of course the insurance companies had risk, so they build into this

surrender charge in the index universal life illustrations. Nowadays they do

not have to actually put the word on the call up they just set the bill

separate it out and show you total charges and then this column of cash value.

Instead of saying surrender value. That's your value. That's what you actually

get if you surrender to cancel the contract and while we’re on that topic. You

have to note that it takes a full 13 years before you're out of the surrender.

Meaning 13 years to get to breakeven where your actual value is worth the

accumulation value your surrender value being equal. Okay so I just have a real

issue with the fact that they don't put it that way anymore and were looking at

cash value is really actually very low that the sales pitch focuses on this

accumulation value column, the accumulation value column; I want to know what

the real in my pocket. What is really my portion my money in this policy and

that is the cash value column. The cash value column is the actual money that

currently is on your side of the ledger. Alright now, let's go a little further

here. I want to just address again this idea that 6.9% is the way they sell it

right 6.9% is the way they sell. Now, let's analyze the actual rate of return

is called the internal rate of return of this policy, with a calculator tool

that I use because I'm a geek for the stuff. This particular tool is not

designed by life insurance company. It's just a mathematical tool that allows

me to analyze investments and it happens to allow me to analyze life insurance

so want you to remember this 6.9% right so 6.9% under the switchover, my screen

here to bring up my calculator. This calculator here I'm gonna make it big as

you can see it and I want you to note that I started this at age 50 were up in

the top left-hand side of this calculator were looking at basically the same

numbers that are in the life insurance illustration. The difference, of course,

being that I'm now analyzing the real numbers the real numbers right, and what

I mean by that is, take away all of the hype take away the sales pitch. Take

away the 40 page life insurance illustration, let's just analyze the math right

because they remember what that number that they were showing on the

illustration they were showing 6.9% linear rate of return market participation

indexed market participation 6.9% every year for 20 years. Now let's just for

the record that's never happened. Ever, we've never had 6.9% linear in the

market doesn't happen okay so right there that's insanity to even show that.

But let's look at the numbers, so you'll notice in this column. Here's the

$6000 that is shown on the oleos right and here's the exact same cash value

right got it right there. Now here's the problem in the lower left-hand corner

of my calculator. What is the actual internal rate of return for this policy.

quick drink get all excited. The actual rate of return for this policy is 4.95

4.95: hold on a second 4.95 is the actual rate of return. So if we come down

here and we say riding where the actual is 4.95 versus what was it 6.9 that is

actually a 1.95% difference. What in the world is that so think about it for a

quick second. What you think that is is a 1.95% difference where is that 1.95%

go yeah fees fees fees in California fees on Van Nuys right that's inside car

joking out keys on Van Nuys anyway. 6.9% illustrated rate every single year for

20 years wait it comes out at the actual number. The internal rate of return is

1.95% less where did that money go boom it’s went off to fees. Now, again I am

not suggesting that fees are insidious at investment companies or life

insurance or annuity should never charge fees that course they charge fees it's

built in, but 1.95%. That's a true percent field: 2%. Now let's address another

thing what did I just say, about 6.9% linear index rate of return never happen.

Now, you get some big highs or some higher numbers you like, it zeros. But

wait, if you get zero. If you get a zero does the insurance company magically

stop charging you fees. These fees these total charges they go up every year

for ever. Whether the market index gives you a rate of return or not. So

remember the sales pitch early on the sales pitch was if the market goes up,

you participate in the upside. If the market goes down, you do not participate

in the losses. There's more to that story though you do not participate in the

market losses that's true, but what losses do you participate in all the time

every single year. If the market goes down and you get a zero right here in

this bracket. If you get a zero meaning you're not going to get any upside from

the market because the market went down so you never lose money from market

participation, the insurance company is still going to take $2800 in insurance

charges out of your cash value there still going to hit you with peace and that

number goes up every single year, so there is a term that I teach. It's called

reverse dollar cost averaging in the investment world. It is more appropriate,

but in this case, what's happening in a period of time when you did not get any

upside bump in your account and the insurance company still takes a bite out of

your account value. That's the reverse. That's a refers averaging type of

experience you're actually going backwards in that situation; you can't

actually lose money in a given year. If the market actually doesn't go up or

goes down, you still get a bite of the apple when it comes to fees. Now some

people will say well kraig you talk about whole life insurance will whole life

insurance have fees in such. yes, they do. And I’ll get into that perhaps

another episode where I’m going to teach on whole life insurance just to teach

the difference. And I’ll refresh this but I'm not to cover it today. Today is

about just making sure that you are armed with some knowledge about indexed

universal life. Ask questions. Okay, ask questions, that's what I'm hoping to

teach today, but I want you to notice something that this fee right if we go

down here I want you to see, I’m going to just grab all of this and just let me

just delete that and clean this up a little bit. I want you to see this very

clearly this particular life insurance illustration was sold with the idea that

hey, when you turn 70, you can start taking a whole a lot of money out of it

right you see here $24,000 and noticed the premium went away. The premium went

to zero. Okay, so the premium goes to zero and I get to take a 24 grand a year.

This thing is amazing. Yeah, you get to take out $24,000 a year only. If you

got a 6.9% index credit every single year for over 20 years and you never had a

zero year where the insurance company took a bite out of your Apple right when

you got no return. So again, what are the odds of that actually happening wow I

think they’re astronomical. I think it's amazing that that this is even something

that's shown in illustrated. Now what you have to understand though is that

while were illustrating this $24,000 withdrawal. What is the insurance company

going to continue to do? Whether you're paying premium or not the insurance

company is going to continue taking withdrawals and what I mean by that is

they’re taking out the cost of insurance every single year. Your cost of

insurance goes up and up and up every year in this type of policy, quick side

note on whole life insurance dividend paying mutual whole life insurance, the

cost of insurance is fixed at the beginning of the policy. It doesn't go up

every year it's fixed. It's a whole life, is the original life insurance if you

will. It's fixed in the beginning, so it doesn't actually go up every single

year. It's actually level and then it’s goes from there. I'll show you got

another video but notice when you get to this withdrawal scenario would take

out 24,000 and the insurance company takes out $3107 so hello that is going to

be very difficult to make that work. Were, illustrating this life insurance

policy like it is some super amazing incredible magical financial vehicle.

Right, and we can do that, and I say we I can illustrate this with my team. I

am licensed with oleos and I’m telling you right now will I ever sell this,

heck no. I cannot, I would not be able to buy this myself. I could not sell

this to myself I wouldn't own it. What do you own kraig? I own a dividend

paying mutual whole life insurance policy. That's among one my life insurance I

own mostly term insurance I buy term insurance. I have a dividend paying mutual

whole life insurance. That's what I got, got one on my daughter, one on my wife

and one of myself, right those are not my big protection policies. But what I

so myself and indexed universal life not likely, right if you're ever being

pitched on this. What I would encourage you to do is ask the advisor instead of

illustrating 6.9% trying illustrate something like maybe 5.5% or 5% illustrate

something a bit more conservative and see how the policy illustration works

because when you start illustrating these with more conservative numbers. The

end result is extremely different because what we calculate in the internal

rate of return quick switchback over the internal rate of return on the policy

was only 4.95 it was off by 2%. Basically 2% that was eaten up in fees. Clearly

that's the only place that they could've done that 1.95% and just vanish. It

went to fees. That's how it works okay so that's the lesson for today. Indexed universal

life is not all that I have clients in underwriting life insurance underwriting

for indexed universal life policies that were using for a very different

purpose and they are designed just like I described here. They're designed I'm

very conservative basis because in the cases that I’m looking out for clients

there more of legacy planning and we don't really care about indexed crediting

we don't care about it, but turns out these policies. They can be used for that

type of work okay, but please ask these questions. If you have questions about

a life insurance policy or product. It's being sold to you, whether it's whole

life indexed universal life any kind of nonguaranteed life or annuity. Please

get in touch with me kraig with a K [email protected]. By the way, I only

know little sign language KR AIG I forget the GG, okay. So, [email protected] and that's going to wrap it up for

this episode of personal pension radio, the blog and the podcast going out

together mehn cross my fingers this is gonna work out. talk to you again real

soon. Take care.