Confused Client Has Second Thoughts About Whole Life Insurance - Why That's a Mistake!

In this video, Dom speaks with a client who is having second thoughts about his whole life insurance policy and wondering if an IUL would have been better. Watch, as I address his concerns live and explain why whole life insurance was the better option for him over an IUL.

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*This video is for entertainment purposes only and is not financial or legal advice.

Financial Advice Disclaimer: All content on this channel is for education, discussion and illustrative purposes only and should not be construed as professional financial advice or recommendation. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Neither host or guests can be held responsible for any direct or incidental loss incurred by applying any of the information offered.

[oldporkchops]

For those who do not have time to watch the entire 1hr 14 min Bobby Samuelson video, the first 30+ seconds should tell you all you need to know about whole life. The Better Wealth video editor/producer really selected the most important bits of that interview to put at the beginning.

"corporate bond returns, better than muni bond tax treatment, and flexibility of a money market account."

On these three factors Bobby singled out alone, WL comes out ahead IMHO. Not to mention peace of mind. For those of us who value peace of mind and not wanting to spend time dealing with the multiple levers of an IUL on a regular basis, WL is the clear winner IMHO.

While it is not often mentioned, the time opportunity cost needed to oil, grease up and maintain the multiple levers of IUL needs to be taken into account too. Assuming the WL is pretty much a set it and not tinker much with the mechanics and structure of it kind of policy.

[BetterWealth]

Loved this response! This client is in good hands 🙌

[devisgoated]

Could you do a video about PHP company?

[fund.your.infinity]

Literally had this conversation with one of my clients the other day as well. I pretty much told them the same thing and it really depended on their goals and needs. They ended up going with an IUL because it was mostly for their retirement and I made sure it was max funded with a company that's been around since the 1800s.

Unfortunately, I have come across a lot of poorly structured IULs but also come across a lot of poorly structured whole life policies as well. It's a small community that knows the difference between a properly structured policy vs a bad one. BUT...there's hope I think...more and more agents are learning how to actually structure it correctly so it's slowly spreading

Overall good video with a few things that could be debated. love that you added the IULs are great as long as it's with a reliable company and max funded. That's essential to a successful IUL. I always tell my clients in order for this to work, it has to structured & funded correctly. Same with a Whole Life policy

[cwall]

My first policy was an IUL. Grateful for content like this that brought me to whole life.

[ianvogelmedia]

Hey Dom, thanks for the love! I think your assessment of the situation is spot on. Especially given the fact that your client wants to leverage the policy early on for investments. Kudos for making the needs of the client your focus and not the product. Every financial product has pros and cons, but too often clients only hear one side of the story.

IULs aren't necessarily bad in the right circumstances. Specifically for people with plenty of money to max fund the policy every year from the start and for those who aren't going to rely on the policy for income later on. Although there is more risk, IULs can certainly work for cash accumulation to pass on via the death benefit.

I've made a recent video highlighting how misleading so much of the marketing is around selling IULs. It's really unfortunate because only talking about the potential benefits (of any product) without acknowledging the potential drawbacks can set unrealistic expectations for the customer. Those unrealistic expectations often lead to confusion and situations like the one you're addressing in this video.

I super appreciate your open and transparent dialog when it comes to addressing this issue in our industry. 👏

[AnthonyY]

Simple: the rising cost of insurance in the later policy years of the UL is going to eat into cash value unless it is vastly overfunded in the early years, nearing modified endowment contract territory. Additionally, stopping premium payments too early will collapse the IUL. Ask for guaranteed illustrations when you’re shopping life insurance products. These non guarantee illustrations that IUL salesman use are WILD lol. You’re doing a solid job of educating the client. “Sometimes being right isn’t enough.”

[joelrobertsonmusic]

Thank you for filming this! Answered a lot of questions I had myself.

[DallinBunnell]

Great content! I loved the breakdown of the different talking points. I also loved how balanced you are on the subject. I also think IUL can be a great option, but it needs to be used and managed differently than whole life. There are more risks, but it's a lot less than a stock market based investment and likely better than bonds. The caveat is that you are overdfunding the contract. If you don't, lapse risk goes way up. I believe in IUL and think it's great, but I've also audited some of our firm's IUL contracts that are not so great. We've had to make some changes. I've seen the bad side too, which has given me a more balanced view of when whole life makes more sense.

[jeffreybolden]

I come from the investing world, do own an IUL and pretty much like all 3 (including VUL). I think you were mostly fair though obviously you like WL a lot better. I think you were a bit unfair about "dangerous". If you fund an IUL at the level you would fund a WL with the same death benefit they are equally safe. Of course you can always slash the death benefit (after the 7th year) on IUL. WL is designed better to protect you against screw ups, but for the responsible IUL is not as dangerous as you are making it out to be. IMHO WL is designed to beat a taxable money market, savings account or short term high quality bond fund. IUL is designed to beat a taxable total bond fund. WL is structured to tolerate higher leverage than IUL the same way intermediate bond funds don't tolerate as high leverage as short term bonds.

[SoumangueBasse]

If we wanted to become a Whole Life Agent that does practices the true IBC principles what do you recommend one should do? I've looked at a several groups captive and non-captive and it's really hard to cut through all the noise

[juliem]

The growth is taxable from IUL as I understand

[victorhugoalvarez]

Great Video! 💯
Appreciate you, always

[LxAxV]

Yo can anyone reference me a video of how to structure a max funded IUL. I just got my license and want to help people the right way .

[ShaunIRL]

i got turned around because you're employee didn't feel like my idea was a great idea😂🤦🏾‍♂️ can i get another employee, i don't like that one

[LxAxV]

Yo can anyone reference me a video of how to structure a max funded IUL. I just got my license and want to help people the right way .