FROM: The Desk of Doug Andrew

#1 – Lack of Education

Many people and even advisors (including insurance agents) simply won’t take the time to get educated on this approach. Probably half the people who’ve received this letter haven’t made it to this page, so if you’re this far, congratulations. An unwillingness to dig deep and get educated is at the root of financial misery. Most people spend more time planning a summer vacation than they do their entire financial future. Thus, we only work with people who will be responsible for their own future and will invest time in educating themselves.

A disturbing trend I also see is that many Americans never look past their employer’s retirement plan. In many scenarios, they’ve only been presented with four different pie charts that represent different methods of allocation, and have been asked to choose one of them. There is no substitute for learning about max-funded, tax-advantaged insurance contracts, A.K.A. A LASER Fund. To circumvent the learning curve, some people talk to a brother-in-law, friend, or financial advisor whom they trust—one who is likely uneducated about this specific and complex insurance strategy. This is like asking a dermatologist to perform your heart surgery. It’s imperative that you go to the experts.

FINANCIAL ADVISOR TEST

To determine if your financial advisor is equipped to help you understand and implement these strategies, ask the following questions. 1. Can you explain the tax citations DEFRA, TEFRA, and TAMRA from memory—off the cuff?If these tax citations aren’t common language for your advisor, look for an expert. The IUL Specialists I train know these rules backwards and forwards. 2. How many max-funded, tax-advantaged contracts have you put in force for clients (or do you personally own)? If this number isn’t substantial, it’s not worth the risk trusting their opinion to these matters. 3. Do you know how to access money or borrow out of an insurance contract via tax-free loans? If not, don’t ask for his or her advice. We have independent tax professionals we can refer you to who can give you their educated opinions on these matters—who have completed advanced Continuing Professional Education (usually taught by me).

I regularly train the top IUL Specialists in the country. They are the best in the United States who know how to structure max-funded, tax-advantaged insurance contracts in the most optimal way. They constantly research the newest and best products in the insurance industry, and very few meet our level of scrutiny for max-funding. **They only work with clients who take the responsibility to get educated … period.

#2 – These Policies Take Experts to Implement

Just like a general practitioner physician doesn’t do brain surgery, most insurance agents don’t do enough max-funded policies to make them an expert. Max-funded tax-advantaged insurance contracts have a lot of moving parts, and to master the art and science of structuring these policies correctly, in-depth study and education is needed, just like a physician with a specialty.

The groups that I train are the experts in max-funded, tax-advantaged insurance contracts, you can be confident the absolute best minds in the business are working on your retirement. Should it be any other way?

#3 – Insurance Is an Un-fun Word

Let’s face it, nobody wants to think about insurance, let alone buy it. On your list of things to do today, I’m pretty sure you didn’t wake up and say, “Honey, I’m getting this urge to learn about insurance.” It was probably more like, “What are the top three things I DON’T WANT to do today?” and learning about insurance was right at the top of that list. And here I am telling you how incredible insurance can be.

#4 – These Insurance Policies Are Mislabeled as Expensive

Traditional financial planners often make the naive claim that this type of insurance is expensive, and yet they know little about how we structure them to outperform stocks, bonds, municipal bonds, mutual funds—especially when taking into consideration the tax ramifications of various investment alternatives.

These types of insurance policies can have unnecessary costs if they are not structured properly and are not funded according to design. These contracts are not short-term, but long-term cash accumulation vehicles—meaning five years or more, designed for superior cash accumulation. When properly structured and funded properly over a period of time, costs can actually be very inexpensive, especially the cost of insurance relative to the gross rate of return. By structured correctly, I mean as little insurance as possible is purchased to still fall within IRS guidelines.

Most traditional advisors make their money as a percentage of the total assets they manage. Insurance professionals with these types of policies receive no management fees from the insurance company. Comparatively, traditional financial advisors may make substantially much more money on assets under management than an insurance professional who has assisted a client in putting a policy in force.

#5 – People Generally Think Short-Term

By nature, human beings aren’t long-term thinkers. The “instant gratification world” in which we all live, in part due to the Internet and technology, puts the focus on results next week, not years from now. If you are looking for “get rich quick” strategies, insurance is not the place to look. It is a long-term strategy (five years or longer) for individuals who are financially disciplined. As I emphasize in all of my best-selling educational books, you shouldn’t buy investments based on which ones grow to the most; but rather you should choose the investments that generate the most net spendable income at the time in life you will need the money the most. I can show why a max-funded insurance contract will far outperform most traditional IRAs and 401(k)s invested in the market. A max-funded, tax-advantaged insurance contract earning 8 percent can outperform an IRA or 401(k)—even if an IRA or 401(k) earned as high as 12 – 16%—because of the tax-favored treatment.

#6 – This Isn’t for Everyone

I’m not here to convince you to invest in something you don’t want or need. In fact, it may surprise you to know that this strategy isn’t for everyone. I teach IUL Specialists that clients should also use strategies outside of max-funded insurance because they have different needs above and beyond what a LASER Fund or MFTA insurance contract can do. Some want predictable income or guaranteed cash flow for five or 10 years, or even a lifetime. Thus, other products may be better suited for their financial needs—those that can perform with a 6, 7 or 8% effective yield—although they are not tax-free like the max-funded, tax-advantaged insurance contract.

Some of our clients use strategies outside of max-funded insurance due to health or age restrictions. However, you may be surprised to learn how many still qualify and use (MFTA) insurance even though they have pre-existing health conditions.

#7 – You Must Have Assets

This strategy is perfect for those who have accumulated substantial nest eggs for retirement who are looking for safer and more secure financial options that provide liquidity and tax-advantaged, predictable rates of return. If you don’t have substantial cash accumulated, we don’t recommend that you own an MFTA insurance contract unless you can put aside at least $500 a month into a policy.

If you’re not at this level of discretionary savings, a max-funded, tax-advantaged insurance contract isn’t for you yet.