Even IUL Agents Will Agree With Me On This

In today's video I have three main objectives that I want to achieve. Number one is extending an olive branch to one specific person who is a life insurance agent who sells Index Universal Life. That person's name is Rick. I've never met you before. I'm extending an olive branch or hopefully we can do some potential work together. We have a mutual client. I won't give that person's name for privacy purposes, but you know who this is. And number two is also to build a bridge, specifically in the life insurance space with whole life insurance agents and index universal life insurance agents. I believe after watching this video in this case study that I'm going to share with you in the next few minutes here that whole life insurance agents and Index universal life insurance agents are all going to agree on this very case. I am willing to bet money on that. So this is an olive branch. This is a, hey, let's do the right thing. Let's make sure we're serving our clients with the utmost service, that at the end of the day we're doing the very best we can to serve our clients goals and desires over our paychecks, over our potential commissions that we may receive. And number three is to educate the public, those of you who watch my channel and others. You're learning about whole life insurance, you're learning about term insurance, you're learning about Index Universal Life, you're learning about infinite banking, you're learning how you can potentially put these things together, how life insurance and cash value life insurance can fit into your financial portfolio. My other hope is that other content creators, other financial professionals in this space can use this video as a case study, as a learning tool that you can share with others. And I would appreciate some of my fellow content creators if you would share this video with your audience as well. With that being said, I'm going to dive right into it. I'm going to give you the framework, I'm going to give you the context of the situation. I, Denzel Napoleon Rodriguez, have been doing financial coaching, consulting and insurance advisory for eight years years now. I predominantly over the last eight years have been helping hundreds and thousands of families across the YouTube channel. But me personally, I've served over 1200 families and of those 1200 plus families I have been a part of, I want to say in the neighborhood of 300 or more plus families, have acquired life insurance either through me, directly or indirectly with some of my partners or maybe some other content creators that I've collaborated with. That number, from what I can imagine is well above 300 plus. This particular case study is a personal coaching client of mine that I obtained back in 2020. So this person has been my client for many years on the coaching side. In 2021, they established a whole life insurance contract. So let's take it to the board. They purchased a whole life insurance contract at the age of 62 with the company called Guardian Life Insurance Company of America. And they chose to fund save $15,000 per year into this whole life insurance contract which gave them a 310,000 level death benefit to start off with for the first 10 years based on their funding schedule. So, 15,000 per year for 10 years starting at the issue age of 62. By the age of 71, that death benefit will begin to increase. If they max fund their policy at that 15,000 per year. Their base premium, their minimum requirement to keep this policy active is only $1,500 per year. So they have the ability to go up to 15,000 per year in any given year and they can go as far down as 1,500. Here's what they've done so far from 2021 to 2026. I am recording this video in February of 2026. So as of right now, their cost basis is $71,687.21. That's how much money they have contributed into this asset in their portfolio. They have $65,000 loaned out inside of this policy. We're dealing with a female, currently 68 years old. As of 2026, the declared dividend rate has increased to 6.25%. Their guaranteed rate of return on the whole life insurance contract, their guarantee is 4%. So they have a 4% floor. That doesn't necessarily mean they're getting a net 4% on their cash value. That is a gross number as well as this dividend. This declared dividend is inclusive of the 4%. So it's not 4% plus 6.25. Like some other content creators out there, I won't name do this, make this horrendous mistake. You're not getting 10.25%. You're getting a gross 6.25% rate of return. And then after expenses, the net internal rate of return on this policy is more so probably in the neighborhood of 3ish percent, maybe 2ish percent. At this point we're dealing with a retired individual and as I mentioned, this particular client, they are a client of mine. They've done coaching with me and they purchase a life insurance contract with me. But we haven't communicated since towards the end of 2023. So from an accountability standpoint, I take full accountability for my clients. I treat my clients like a mother treats their children that they, you know, like a mother that loves their children. Regardless of any mistakes their children makes, they still love them. Right? That's for the. The most part. Generally speaking, I know my mom loves me no matter what. And when I make mistakes, she doesn't love me any less. That's how I treat my clients. Now where the accountability comes in is despite this person not communicating with me, not booking phone calls with me, not keeping in touch with their personal financial goals and being held accountable because they're not keeping in touch with me. And I do my part by putting out emails. I have my clients on an email newsletter. I send out reminders, hey, if it's been more than three to six months, you need to book a call. I make videos. I have not stopped making videos since 2023. I've been consistently putting out content since 2018 and have not stopped. So with that being said, despite all of that, I still take full accountability responsibility that my client has not communicated with me. That's just how I roll. Okay. Regardless of what they haven't done that I like to let my clients know. And you know that I love you, I respect you, I honor you, and it's a privilege to be able to work with you and do business with you. And when there's seasons where you do things out of alignment with your values and beliefs, when you do things behind my back without communicating, or you decide to say, move on and do business with someone else, totally fine with anyone here watching and my existing clients. If you decide to hire another financial professional. Right. Or you decide to go a different route, I still want to be involved in that process. Don't shut me out. I'm perfectly fine. If you want to go do business with somebody else, because maybe they have an expertise that I don't have. I. That I look at that as an opportunity for me to learn. What is it that you learned that I wasn't a part of that? I wasn't saying that I wasn't educating on that. You now got convinced, persuaded, sold. That was of value to you. How can I be a part of that process? Even if I don't make any money, I want to learn. That's the type of way that I roll as type person who I am. So with that being said, we have a person here who started learning or got presented by another life insurance agent whose license shout out to the name, his name is Rick. Shout out to you Rick, whoever you are, wherever you are, we have a mutual client, you're currently serving this client of mine. And you somehow in your presentation convinced my client to do a 1035 exchange of a guaranteed asset with a guaranteed dividend result with a track record of performance, years and years of funding to surrender that whole life insurance contract that has a $310,000 death benefit and do a 1035 exchange with National Life Group into an indexed universal life insurance contract, flexible life. Where according to the design that you laid out, these are the exact numbers, according to the illustration that you design for my client, you have them funding less dollars per year. So $12,000 per year. You have them doing a 1035 exchange of the remaining cash value. 11,839 is the estimated cash value that you're pulling from here. Despite all the loans that they have out surrendering that death benefit, you qualified them at standard non tobacco. Whereas over here, this person and I will look at my policy design, they are also rated standard non smoker. Okay, so this is a standard non smoker rating for a 62 year old. Your policy has them rated as standard non tobacco, but as a 68 year old female, which means your dollars are weaker than mine at 62 years old, meaning the same money that she would be putting into this IUL is going to get her less death benefit. So if we're just purely looking at death benefit value, you are extracting $60,000 of wealth potential away from this client and I hope you see that. I hope we can have a conversation again. This is an olive branch. This is a way for me to extend a relationship. This is a potential learning experience for you, Rick, that maybe you did not see all the details. I'm going to give you the benefit of the doubt. Maybe you did not see the full whole life insurance contract and how this was designed. But we're talking about a $310,000 death benefit for a retired female who's 68 years old today. If something happens to her Today, she dies. 310 grand gets paid out to her family, minus the loans. Okay, so minus the loans, she still gets over what, A quarter million dollars of death benefit tax free to her family versus if she surrenders that policy today and puts your policy in force and she dies, she gets 250 grand. So based on that there's not a whole, there's not a big difference. We're probably splitting hairs. If something happened to her today, now let's say nothing happens. She's healthy. She does this 1035 exchange. Let's keep going. Let's look at the rest of the details here. We have a base premium required expense of $7,567.56, which is the required minimum premium to protect that $250,000 death benefit versus my $1,500. So you have increased her expense even though you're funding less, even though you showed the illustration of her putting in 12,000. Because maybe this client is looking at her current whole life and for whatever reason, financially, maybe she's like, I don't know how to fund 15,000 anymore. Maybe she thinks that's a required number. Again, I haven't communicated with her since 2023, so maybe she thinks that she's required to pay that 15 grand. She is not. Her minimum is only $1,500. If she does this, you are putting her in a predicament where she is forced. She's going to be forced to have to pay that 700567 for the rest of her life. Because an IUL, you have to keep funding it. You can't stop funding an iul, even if you're being taught as an insurance agent that it's flexible and that you could stop funding because of the growth of the cash value would fund the premiums and you'd still be okay. No, that is not the case. If you look at the rate of returns on a guarantee level and the midpoint assumptions, the policy will lapse every single time when they reach into their high 90s, high 80s, and if they live that long and there's a possibility that their policy will lapse now your client is fully out of the death benefit. And at the end of the day, is that a core value in your business? I hope it is in terms of providing your clients with insurance. Rick. Okay, so 756756 is the minimum required premium. You your target premium, meaning the amount of money she should be funding into this iul. That's what target premium means. That is optimal funding for optimal results inside of an iul. An IUL does not function like a whole life. A whole life has guaranteed results, has guaranteed dividend rates, and has non guaranteed declared dividend rates that have been paid since the mid-1800s. So it's about as good, as close to guarantee as you possibly can get. It is predictable returns over a predictable period of time with a set cost, set fixed. And IUL does not have fixed cost, fixed expenses. It does increase over time. So target premium. To get optimal results for the way you design this policy, she needs to be actually funding $14,106 per year. And my guess is that she doesn't know that because if she did, she probably wouldn't do this because you're only, what, reducing her funding $1,000, we could simply do that with the whole life. Now here's another thing you blew my mind with is you set a high MEC limit of $25,888, which blows my mind. Why are we expanding the MEC limit if you're dealing with a 68 year old female whose desire is probably trying to reduce her expenses because she feels like this current whole life is what, maybe too much for her funding wise. Again, I haven't communicated with her since 2023, so I don't know, but that's how I'm viewing this conversation. Because if money wasn't the issue, then you would have designed something that matches my funding so that your policy would look better. So that's a little bit confusing to me why you expanded such a high MEC limit. And another thing you did was option a level. So you have a level death benefit of 250k which stays level all the way to age 85. The death benefit increase until age 85, assuming she keeps funding 12,000 per year. My whole life had her funding 15,000 per year for the first 10 years and then dropping down to say, the base afterwards. We have a floor of 0 to 1% depending on how her cash value is allocated in the IUL via the different index option funds crediting rates that you can choose from according to the guaranteed illustration of this policy. The guaranteed results, the guaranteed performance that 0 to 1% floor. This policy is guaranteed to lapse at age 85, guaranteed. Even if she pays $12,000 per year. Guaranteed to lapse at that point. In order to avoid a lapse, she needs to pay more. Toward what the target premium. She needs to pay more. If she does not do that, she is at risk of losing this whole entire asset. Okay, now she funds it optimally. And let's say the IUL performs optimally, which I would hope that it does. The death benefit doesn't begin to increase till age 85 versus mine begins to increase at age 71. If she continues to fund 15,000 per year over here and then say she drops down to like half the number, the death benefit will begin to rise. Okay, and hopefully this is a shout out to my client here. Hey, I would love to get reconnected with you, Maybe I can get back into coaching and help you better steward your money and cash flow. To figure out where we want to allocate these dollars, how do we want to replenish the loan and maybe, you know, reuse that cash value again for another type of investment that you may be interested in, et cetera, et cetera. So with that being said to the agent that's working with the client and to all life insurance agents out there, whether you sell only term, whether you sell only whole life, whether you sell only iul, based on these numbers alone, I'm sure you would agree, especially if you're well educated, well seasoned, you know a thing or two in the industry, doing a 1035 exchange on a seasoned product that you've already been funding for so many years almost never makes sense to surrender that whole life. This person has already passed all the early charges in the, in the whole life insurance contract. We're talking 2021, it's now 2026, we're five plus years in to this life insurance contract. This thing is just now getting good in terms of the net rate of return positive. They've already broke even in terms of their cost basis and the amount of cash value that's in there. So that's going well. Guaranteed death benefit, guaranteed results. Let's look at, and I'm going to be an IUL agent for a second here and let's say that this client is going to get an IUL no matter what. What's the most efficient way about going about that to obtain this IUL for whatever reason the agent has sold or convinced this client to do so. What would be a better way? And again, I'm sure we all can agree, dude, that doesn't make sense. To do a 1035 exchange, you're going to get rid of a perfectly funded, well, asset. Why not have both? That's an option. So Instead of a 1035 exchange, one option is why not have both? Why not have both? If you're showing 12,000 per year in funding, again, dealing with a 68 year old, do they, Are they in the headspace where they want to be committing to a number to get a particular result? Maybe, maybe not. Even if they are, you could take the 12,000 and just design it as 12,000 without the 1035 exchange. So just 12,000 per year and leave 3,000 in the whole life. You can inform the client to reduce their funding over here all the way down to $3000 or all the way down to $1500 and everything stays the same. Yes, it'll, it'll earn less, obviously, because you're putting less in, so it's not going to grow as fast. But they maintain this asset. That 320 at 10,000, that's extremely valuable. What are we doing? This, in my opinion, is misrepresentation. This is malpractice in the life insurance space. Okay. And again, like, I'm not against you, Rick, in this, in this video, I actually want to be friends with you. I want to build a relationship. We have a mutual client. Maybe there's a world we can have both. Even though I'm not for iul, even though, let's say I don't agree with the iol, but if my client does, I'm going to cheer them on. I'm going to provide the education. And at the end of the day, they're a grown adult. They can make decisions. If they want to make a mistake, and I know it's a mistake, hey, they're going to do it anyway. They're a grown adult. All I can do is, as the coach is observe, show the blind spots, show the plays, show the options, educate you as much as I can. But you're the player at the end of the day of your own finances. You are responsible at the end of the day as an individual for your own financial choices. But I'm still going to love you all the more. So why not have both? 12k to the IUL, 3k to the whole life or reduce all the way down to 1500 bucks. You could even. Another option for you, Rick, option two, let's say you've convinced my client that this whole life sucks is a horrible product. They should have never done it. They should have did an iul. Let's say that was the conversation. Well, ethically you could tell them listen, because you've already funded this for so many years and that death benefit is valuable. When you were 62, you know the cost of that life insurance policy is cheaper technically than mine because you're older. So the cost of insurance does cost more versus you locked in that cost here at that lower price. Okay, option two is you could do a reduced paid up because it is a whole life with fixed costs associated with it. And if you pre funded it enough, this policy could potentially become a reduced paid up, which means it gets rid of the 15,000 in funding altogether. And now you have 15 grand technically to work with that you can use to design your iul. So you could didn't you could have did that kept that asset in place. Option two, reduce paid up. Let's go with another option. Look at this. How many different options we can to serve the client the highest level. So option three is we could do a premium offset. You could have done a premium offset where the policy at this point, with just $1,500 in premium, the policy could potentially pay for itself based on the dividend earnings of the total amount of cash value that's available in there. And again, that frees up a lot of capital for our mutual client for her to now fund an iul. This is, this is a life insurance agent that's never sold. IUL is basically giving other IUL agents a way for you to sell more life insurance. Ethically, doing the right thing is understanding the value that that decision of your prospect, your client made when they purchased whole life way back when, that they don't necessarily have to abandon that asset. It's kind of like buying a piece of real estate 20 years ago in 2006. Imagine buying a piece of real estate in 2006 and you own it free and clear. And now it's 2026 and someone is convincing you to exchange your 2006 property fully paid off to now acquire another property that costs double the amount and just get rid of that 2006 property altogether. Who in their right mind would get rid of the 2006 property? Nobody. What you could do with a piece of real estate that you own since 2006 free and clear is you could leverage the equity in that asset to go acquire another property in 2026, regardless of the price of that new asset. This is financial 101 basic understanding. So shout out to you again. Rick. This is an opportunity. This is an olive branch. I encourage you. Let's reach out. Let's have a conversation. You must be a phenomenal salesman to present this policy with these numbers to someone who has better numbers, more efficient, cheaper, expense cheaper. Everything is cheaper about this whole life compared to your iul. You are increasing the premium by thousands of dollars and you're starting me off with a lesser death benefit. And I gotta wait till I'm 85 just to see a potential increase in that death benefit. What are we doing? These are three valid options that you could do, which is one option. Why not have both 12k per year in the IUL, 3k in the whole life or as low as 1500 bucks. Option two, reduce paid up. Just reduce paid up the whole asset. It'll continue to compound on a guaranteed basis no matter what she's not obligated to pay the loans back if she doesn't want to. She could if she wants to, but she doesn't have to. It relieves her of the 15k. Now you have 15k to work with in option 2. Option 3 is a premium offset. We can let the dividends that are growing in there to pay the, to cover the interest costs on the loan and maybe some of the premium and whatever is short, she could come out of pocket. It's going to be way cheaper than 15 grand. Obviously it's only going to be like another couple thousand bucks if that. That still gives you 12/000 to, to work with to do your IUL. So hopefully in this video, without blowing a gasket, I achieved what I was looking to accomplish for you today. This is an olive branch to that other agent Rick shout out to you. My hope is that you're truly trying to do the right thing for your client, our mutual client, and you're not just trying to make a commission. I know that with your IUL you receive commission not just based off the base premium, but really that target premium number. So you're getting a massive paycheck. A massive paycheck. Way more than what I got on my whole life. You're getting paid way more than me. Like 4x what I would get in commission in a whole life. I'm only paid on that $1500 base premium. And then what, 1 to 2% on the PUAs that difference between 15,000 and 1500 bucks. Your commission is not only based off that 7567, but off that target premium of $14,000. You're getting a massive payday. You're getting a nice 5 plus figure check if I'm not mistaken. Probably, yeah, you're getting a nice five figure. Like what is that on an iul? I don't know. Someone can comment below if the target premium. If you're an IUL agent, you understand target premium. Premium and commissions. National Life Group, which is one of the top carriers for iul, what's the commission on this policy? And let's assume you have a top rated contract with National Life Group. What's the target premium on that? Comment below? What do you think? I believe it's close to this number of 14 grand. I believe. And let's just say this agent has their own agency or they're under an agency so they have a split comp deal, whatever, you know, 50 or 70, 80, 90%, whatever it is their contract is, let me know in the comments. And again, I think this is an opportunity where all of us in the industry, whether you sell whole life, whether you sell iul, whether you sell term, a little bit of everything, let's do the right thing, mission over commission. Let's reach out to the agent that previously sold that policy, especially if they're in the business, extend the olive branch, say, hey, we have a mutual client in mind. I've presented them with an iul. I think this could be better for them. Can I get your perspective? You have a 30 minute phone call. Doesn't have to be a battle. Why are we poaching each other's businesses? Why are we trying to steal each other's clients for commission? I have no problem with splitting business with anyone in the industry. I have no problem you doing business with one of my clients. I just want to make sure we're doing the right thing. I don't have to get paid a dime. You can take this client and serve them with your IUL and any other projects you have in store for them. I want to know what you're thinking about this client and that you're not just doing it for the commission. Because I know this is a big payday for you right here, massive payday. And I want you to make money, I want you to get paid. I want you to have financial freedom. I want everybody to experience financial freedom and independence, but not at the expense of our clients. If this client loses that death benefit, ends up with less or loses all death benefit altogether because they don't properly fund an iul, you and I know better. You can't underfund an iul. You can't. You have to optimally fund an IUL for it to perform the way you need it to perform. Especially in the early years, especially on a 68 year old. Her expenses in IUL is only going to get increased, it's only going to go higher. So we have to get ahead of that by what? Optimally funding it so that what the rate of return that you're hoping to get can offset the insurance expense on that policy. So again, without blowing a gasket, my name is Denzel Rodriguez, your personal finance geek, 21st century. This is a shout out to everyone in the industry. Your content creator. If you want to share this video, if you want to clip it, send it out. Please do. Let's educate the public so that they can make good decisions with their money and not make poor decisions just based off of 1 metric rate of return. There is so much other values and benefits when it comes to permanent life insurance that we don't want to overlook other than the rate of return. God bless you. Enjoy the rest of your day. Talk soon.