329: Josh Bought IULs for Infinite Banking, Here’s What Happened

Welcome to Wealth on Main Street, where conversations about growing your wealth are fun and entertaining. Wealth isn't just about money, it's the skills and the knowledge that we develop to pass on to future generations. Tune in each week to grow your mindset and your net worth at the same time. Index universal life lawsuits seem to be in the news a lot. We have a lot of that, those kind of things happening in 2026. Certainly they've been happening for a number of years, yet we keep hearing from people when we have people calling in and speaking to our advisors. Asking questions about these insurance products and trying to find out, is there some way, or can we use them, or are they applicable in any way to practicing the concept of infinite banking? So we're going to dispel some of those myths today. We're going to talk that through. We're going to go over Nelson Nash's opinion of it. Having spent time with Nelson as my mentor, I can tell you what, what isn't in his book was what he would tell you in person about his feelings on those types of contracts. Hint: they weren't very fond. He was not fond of any of those types of contracts. But I'm joined by two of our incredible advisors here today. I've got Josh and Garrett with me. They've both been on the program before. So welcome, guys, to the show. And I'm excited about this topic.

Thank you for having us, Richard. I'll tell you, I'm a little nervous this time compared to when I was on the show the first time. But part of it is because Garrett's here.

No, happy to be aboard, Richard.

Yeah. I love these.

I love chatting with you.

You like to be prepared too, Josh. And so I know we're going to have a little bit more of a free-floating conversation here today. But I really want to thank you because you're kind of the inspiration for initiating us having this recording because you've both been speaking with people and a number of our folks on our US team have been speaking with people on a regular basis. And you're hearing a lot of these types of questions, frequently asked questions, common questions. And it seems to be coming up more often.. And so because there's a lot of exposure there, it makes sense that we address it here. While we've had great content on this topic before, we'll be pointing people to that. I'll show my screen here in a little bit. We did a great interview with Robert Rickard, who's a lawyer who actually is well known, probably the most well-publicized lawyer right now, who's won several lawsuits with insurance companies on these types of IUL cases. And additionally, we've also had Todd Langford on of Truth Concepts. Talking about universal life insurance and how there's a risk shifting that takes place with the insurance company. So we'll unpack a little bit of that today, but I want to hear from you guys and maybe I'll start with you, Josh, and then Garrett, I'll get you to kind of chime in afterwards. What are some of the common things that are coming up as you're on calls or hopping on meetings with people that seem to keep kind of repeating around these types of contracts?

Yeah, no, thanks, Richard. I think the original question that I was asked that kind of spawned me to reach out to you and say, hey, we need to get some more information out there about this, is people ask me, can I use an IUL for infinite banking? And most of these people that I'm talking to, at this point, they've done some research, they've read the book. And so, a lot of times I will specifically talk about Page 39 in Becoming Your Own Banker, where Nelson gives his opinion on using an indexed universal life policy for the process of infinite banking.

Excellent. And we're going to unpack that a little bit more too on this call today. So Garrett, how about for yourself? Anything? I mean, I'm sure it's similarities there, but anything additional you'd like to extend on?

Yeah, absolutely. And I think that there are, um, I mean, I think there's a lot of information out there. Like you're seeing it a lot on, on social media and stuff promoting these kinds of products. Um, and I actually see a lot of people calling it infinite banking or becoming your own banker. So I mean, it's not surprising that people are confused about how to use— look, what's the best product for this? Like, when I— what does it even mean to become your own banker? And why do we use whole life and not IUL? Um, and I, and I think And I think we've been talking about this a little bit, just like as a team. Um, and I, I don't think there's— we really don't want to like do like an IUL versus whole life discussion here. It's, it's more like what is the place for whole life and then what is the place for IUL and how do we tie into all that.

And on that note, so I love what you said, you know, because you're right, there's a lot of marketing. And so Jayson Lowe and I, when we're on the show, we talk about sensationalizing the message, which Nelson asked us not to do. There's periods of time in the past where I'm sure we've done that. And, you know, we're all, we're all good for a slap on the wrist as we move through life. Okay. And so I'm willing to take my licks for where I've made poor statements and things in the past. Our goal, our focus, we're not perfect. We're all fallible people, but we're always looking to add and improve and change and modify. We're all growing, right? Nelson taught us about the arrival syndrome. There's no such thing as having arrived in knowledge.. And so if you're approached or exposed or seeing things on your TikTok and your Instagram feed about universal life or IULs or all these things and how they're the next greatest thing since sliced bread, well, that may be true if that's the case. If you know that product inside and out and you know what to do with it and you're great with managing your investments and all those kind of things. But recognize that a product, an insurance product, and a process are two totally different things. And what is the difference of those things matters when it comes to infinite banking. And being technically accurate also matters because infinite banking is a trademarked term by the Nelson Nash Institute. So the first thing I'm going to do here, guys, and I'm going to, I'm going to share my screen here and I'm going to go to the Nelson Nash Institute's direct page. And so for anybody of our viewers, you can go to infinitebanking.org. A ton of great information on here. Now, guys, can you see my, see my page right now?

Yeah, we can see it.

So real simple, you go to infinitebanking.org, you click right here on About, and you click on What Is Infinite Banking. There is no better source for explaining that than the source material, which is infinitebanking.org. This is the website of the Nelson Nash Institute. They own the trademarks and the copyright material of this concept. So the Infinite Banking concept is a registered trademark of the Nelson Nash Institute. Authorized practitioners like ourselves have signed an agreement and we're allowed to utilize those trademarks as long as we abide by the trademark policy. There's a lot of people out there promoting things and talking about this concept that Nelson himself created that are not authorized and are not following that trademark policy properly. That's inappropriate. And so recognize and understand fundamentals. So it says right here that the system uses loans from a mutual insurance company using insurance policy collateral. Repaying on their terms while the cash surrender value in the policy compounds uninterrupted over time. It also goes on to say how it works. Well, you start, number one, with a dividend-paying whole life insurance policy. You need a specially designed policy in order to do that over time. The policy is not infinite banking. It is simply the engine that allows you to follow some of these key principles. You build up policy, you borrow against it for important life like, uh, life needs, okay? And then you repay them. You have to set repayments. That's not stealing the peas, etc. And repeat that process over time. So there's a lot of great information on this site that talks about where— why this is used, common myths and investment, uh, that are here, etc. You will also find additional information available on the site about why, uh, universal life isn't recommended for this. Now I'm not going to point to all those articles. There's articles you can go digging in to find here,. But those are some key, key elements.

Okay.

So now stopping my screen here for a second. We have to understand the source material. So now you mentioned, Josh, page 39. So I'm going to bring that up. Okay. Now, this book was written for our viewers in the year 2000. It was actually kind of written a few years prior to that. But originally it was literally workbook materials like, like course materials that you would get. And Nelson Nash would use a— you guys remember those projector screens where what you would put a sheet of paper on top and it would project what thing is you would draw all over it. Okay. That's what Nelson used to use to teach this course. And it developed after doing it for a number of people for so long. And eventually someone said, well, why don't we just take all your stuff that you're doing and just put it in a book? And that's ultimately how the book Becoming Your Own Banker was created.

Okay.

So it was officially published in the year 2000. So there's been multiple iterations and we're on the 5th edition of that book. And there likely won't be any real changes other than they've got now a great Spanish version, an updated one. They have a French version available. They're working on actually a Chinese version, I believe, in Cantonese. I'm not 100% sure there, but there's lots of options. And so when you have a book that's now being written, manually translated into multiple— that's a workbook like this into multiple languages— that says something about this type of material. So on page 39, my thoughts on universal life and variable life. It was invented in the early 1980s by EF Hutton, a stock brokerage firm, in my opinion, that knew nothing about life insurance. That actually matters because how we think— Nelson taught us that we have to rethink our thinking. What created the product? Where did this all stem from? And what thinking, what did, you know, born it into existence, if you were? All right. UL was nothing more than 1-year term insurance with a side fund of an interest-bearing account. Now, that was its original format. We're going to come back to that, that 1-year term insurance. We're going to expand on, on our conversation. It was an attempt to unbundle. So I want our listeners to recognize this, to unbundle. All right. The savings element of a life insurance element of a whole life policy. Okay. And the insurance component. So it was like rather than having one thing, it's all combined and actuarially designed. We're going to try and separate its components. And then you have really two things running in tandem. They're still part of one little banner. They're still in one package, but it's like two separated elements, the insurance element and the savings or the investing element. Now, when this was launched in the '80s, interest rates were what were where, guys, when they launched this product?

Very high.

Do you want a clear and focused way to decide if the infinite banking concept is even right for your family? It's simple. Download our free 7 Steps Guide at 7steps.ca. It's a very smart, time-saving roadmap that'll help you evaluate this process fast so you can move forward with total confidence. In fact, once you complete step 4, you will know if this is even the right fit for you. Find out now. Get it at 7steps.ca. They were, they were running up through the roof, high inflation, interest rates. So anybody could go and stick money in a basic account and make 10, 12% on their money. Easy peasy. And everyone thought that was the best thing. So a product like this made sense at that time. Well, as the interest rates began to come down, well, people weren't illustrating these things very well anymore because the savings rate was coming down. So what did they do? They said, oh, geez, we have a problem. Maybe what we'll do is we'll stop turning this into a savings account vehicle. We'll take that side component there, the unbundled component. Let's go and attach it to some investment products that we'll manufacture with the insurance company. Now what you have is you have a 1-year term insurance platform, a cost basis attached to what Jayson Lowe would say, a Vegas-style slot machine. So you put quarters in it every year or whatever dollars, and you're, you're just rolling the dice to see if you're going to get any investment account bearing. Makes sense so far. Okay. So then over the '90s as they progressed and into the early 2000s, these products became very heavily marketed and sold. Traditional universal life, and then eventually now with index funds. Now we took the UL and what did we do? We put an I in front of it. So instead of your investments being various styles of essentially mutual funds or segregated fund elements still attached to market risk, but you have to make your choices. Now we're simply going to try and track the index because these index funds exist and they didn't before. Make sense so far? Well, there's the history lesson of universal life in kind of a, you know, 2-minute rundown. Right.

Essentially, they're adding the risk component to the insurance policy.

So everything that actuarially designed— all policies are technically prepared and designed by an actuary. However, the actuary's job is to manage risk with the mathematical design of a policy. Now, in the whole life model, whether it's whole life that's non-participating or whole life that is participating, either way, those are slightly different products. They have historical context that they measure against, including how well they've taken money in. They understand lapse rates. They understand all of these different features that all get calculated into the end result. Same thing with universal life. They just don't have the same level of history because they haven't been around as long. All right. And actually, right now, there's a lot of lawsuits because of the lack of timeframe in history. Like, we don't have 100 years of history. We have maybe 40 years of history, 50 years of history. So a lot of those policies and products haven't gone through a full maturity cycle of timeframe of ages of life. So now we're starting to see a lot of the problems occur from when they were sold many, many years ago. And having done this now, I believe I'm in my 17th year. I have seen, uh, roughly speaking, I'm going to take a guess here, we'll get this in a minute, but I've seen a lot of these policies from people. I've never sold one, I never will sell one, I have no interest in ever doing that. I don't— I fundamentally don't believe that they're, they're the right protection for people, and certainly they're not designed for infinite banking in any way, nor should they be. But in all the ones I've seen, almost all of them exclusively have had an insurance charge, a cost of insurance charge called ART or YRT. That stands for annual renewing term or yearly renewing term. They're the same thing. Whereas in Canada, we talked about this before we hit the record button, you can also get what's called a level cost policy, which would be much more stable, but it would increase the amount of premiums in the early years. And apparently they offer them in the United States, which we did not know until we, before we hopped on this call. And so you You guys have been insurance licensed for a little bit now. You've never seen one. You've never heard of anyone talk about it. You've never seen it marketed. But we just found out that they do offer them with a few companies, a level cost of insurance option. Right?

Right.

Was that a surprise to you?

It was a surprise. Yeah.

And can we speak to that really quickly? Just so like, what that means is that you're buying the cost insurance is included in every premium to age 100. Or I guess in the US it's age 121. So there's a—

it's a, it's built on a chassis of essentially a term insurance, but instead of the term period being 10 years or 20 years, the period is wherever your age is out to age 100 or let's say 121. So we're solving for how much money does the insurance company require to take in to guarantee this original base amount of death benefit can be paid out at that future time frame.

And it's the base amount of death benefit, that's the key there. And I think it's really important to explain that, that whole life contracts are that, because— and, and it's why sometimes when you look at a whole life policy versus, say, an IUL, it doesn't look as strong in cash value in the early years because it's all leveled out. But now The flip side is when we're, you know, in passive income years, as Nelson says it, um, I call it our Moses years because that's when he, that's when he got called to free the Israelites from Egypt at age 80. Um, that's when it's actually performing the best because we already paid for that full term, right? And the policy is now growing a lot at that point. Um, so it's, it's a very, it's, it's that, that fundamentally is a, it's an important, um distinction to draw between the level term and the, or sorry, the level cost and the ART, annual renewable term.

Yeah. And we need to expand on that a little bit more. So annual renewable term for the listeners, it's important to understand we need to exercise what Nelson would say is some reason, some logic, imagination. And then he would say it's also connected to prophecy, which means your future projections. What are you thinking about in the future? So annual renewable term doesn't really make any sense unless you really consider what that means. So take whatever age you are today. I know you're listening. Maybe you're 55, maybe you're 45, maybe you're 35. Wherever you are, wherever your age is today, if you were going to get an amount of insurance, let's say the insurance was $500,000 of coverage. If you had to just have the insurance for one year, what would the one-year cost at your age B. So if you're 55, you would pay the cost for that 1 year at age 55. Next year you're 56, you're 1 year closer to death. So the cost for that $500,000 must be higher because the probability of the insurance company making the payment goes up. And so every year as you get closer and closer to eventual mortality or death, the cost goes up, but it goes up now at an exponential basis. So we use hockey sticks here in Canada. You know, they got a really nice curve at the end, right? So that's the hockey stick curve that gets created. So at the very early ages, it's very low, very inexpensive, because year by year, the probability of paying out that death benefit in that year at your young age is very low. So the cost to deliver that benefit to you is low in that year. But we know we have to deliver a benefit as you age. The probability exponentially increases. And so, as you get into your late 50s, your early 60s, your late 60s, that starts to ramp up at an exorbitant basis. And what happens is most people at that stage of the game have also been trained and taught for the bulk of their working years, at some point in time, I'm going to use passive income, I'm going to be retired, I'm going to be earning less money, I'm going to have to live on less, I'm going to, you know, I'm going to want less expenses, less outgoing things. So, at the point in time where the cost of insurance is at its highest and growing, you're trying to stop paying for things. So, like, you have an inverse relationship of putting money in because you want to stop, but the requirement for money is at its highest peak. And so, those two things logically are fundamentally mismatched. That does not exist in a whole life contract. Go ahead, Josh.

I figured I'd raise my hand because I'm with two really good talkers. But can I make a confession? I have a confession to you guys. Yes, I bought—

this is a safe space.

I know. Well, so I said it's going to go to everybody. About 10 years ago, I bought an IUL. Yeah. And that was before I knew what I know now about life insurance. And I bought it thinking that I would use it to store the proceeds of the sale of my business. Like, it sounded like a great idea. Before I even got to the point of selling my business, I learned something about human life expectancy, which is just what you were talking about, Richard. I learned that technology today— I mean, they have so much advances in technology, but, you know, the technology is going to make us live longer. And that fact right there, I remember where I was when I go, oh my gosh, this is not going to work out. It made me realize that this product that I own, the IUL, was not the right product to have long term. And, you know, when you learn that an— that a UL product, because of its chassis and the cost of insuring your life, goes up each and every year that you age, you realize it's just going to drain the cash value that is stored in that policy. And the older you get, the faster it drains out. And like that right there was enough for me to cancel that policy, about 2 years after I had originally purchased it. And I don't own them anymore, but I did go through that phase.

But Josh and Richard, like what I always hear about these is at that point when it hockey sticks, it doesn't matter. The illustration is showing that my cash value is going to be so high that it doesn't matter that the cost of insurance goes up. Like, can you— can we speak— can we talk about that a little bit?

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Yeah.

So first things I want to address, Josh's, and then we'll tie the two things together. So thank you. Your confession is well received and you're absolved.

I feel so much better, man.

Yeah, we love you. So it's okay.

And I'm sure with our listeners, you're not the only one who's had that experience to some degree. So here's what— because, you know, we only know we have the best information at the time. Time to make a decision. And we, we have new things, we learn new things as we go, and sometimes you have to make adjustments. That's the nature of life. So when we talk about this hockey stick increasing charges, the premium must be paid in order for an insurance to stay in force. A premium must be paid. It's either coming from outside of the policy, so exterior cash flow, exterior resources, resources from your life, your assets, your bank account, That's paying a premium, or it has to come from the internal pocket of the insurance company, which means the insurance policy in some way is reducing itself or eating itself. All right. And if you have a drastically increasing hockey stick and you're not putting any more in, it has to take that capital to keep itself in force from the internal mechanism of the policy. And so if you aren't achieving continued consistent greater growth in the assets, or you have a bad year or a downer year or anything of that nature, what ends up happening is you can quickly begin to deplete the asset base. Now, here's what happens for people. Many of these policies are also sold— going to your point, Garrett— they're also sold under the premise of a replacement passive income or retirement income stream. And so people get in, they spend a lifetime doing it, they go about their life, the kids, the hockey, the soccer, the tennis lessons and the piano lessons. They've got this plan they feel really good about because the cost of insurance hasn't escalated yet. The values seem to be going up, so that's okay. But then when they want to stop paying and they want to start accessing capital by way of a policy loan or a collaterally assigned loan, well, now you're reducing value on top of the reducing value to pay the premium because nothing new is going in. So what happens is instead of having a compound growth, you actually have a compound decline. And the result of that is what I refer to as an implosion. And so people, when they need the insurance benefit the most, they've eroded, eliminated, or the policy is threatened with its existence because the premium cost is at its highest stage and there's nothing left to draw from. Which means your policy is about to lapse and you get a letter in the mail says, hey, send us $72,000 for this year's annual premium or $38,000 or $125,000, whatever the size of policy you have is, because now you're in your late 80s, you're terminal with cancer. You need the insurance to protect your family and you felt really good about it, except now it's ready to implode when you need it the most. This is what's causing lawsuits. To occur. This is not the only thing, but it's certainly one of the things. Go ahead, Jayson Lowe.

I'm glad you mentioned that too, because, you know, we started this conversation talking about what people frequently ask us, you know, about using an IUL for infinite banking. Almost twice as many people as that will tell me a story about how they have an IUL, or they're in a situation with an IUL, or they had an IUL where it did just as you explained. So, we do hear a lot of people that have purchased these policies or they have the policies and they don't want it anymore. They don't know what to do and they're looking for a solution. What can I do with this now? And, you know, with this idea of infinite banking that I want to do in my future.

Well, here's one of the other things. I'm glad you mentioned that, Josh, because here's one of the other things that goes hand in hand with one of these contracts, a universal life or universal life adjacent. You know, maybe it's got an I or a V in front of the UL, whatever that is. Most often, not exclusively, but most often, because every carrier is different, every— and every couple of years they make adjustments. So like the one that was sold 10 years ago versus the one being sold today, there is some variability between them. They're not going to be the exact same product. So we are speaking in some generalizations here. We have no choice based on how they keep changing the products. Okay, but in general there's surrender charges, and surrender charges often exist for 10 years after the product is sold. So you might be building a cash value, but if you cancel the policy early, you have to pay a surrender charge. Well, that's an actuarial charge that's in place to protect the cost of acquiring the policy because the insurance company is not going to lose anything. They have to make sure they get to be whole Who are they trying to be whole for? The participating policyowners who own the insurance company, the mutual pool of money. So they're looking after the par owners, not the universal life owners, because that's who they're responsible to. They're not responsible to universal life owners. They're not participating in anything. They have no ownership stake. They own a contract. They don't have an ownership stake in participation of the company. So there's a big difference if you get down to the mindset. Now, that means that, you know, hey, the advisor has to get paid, all those kind of things. So those surrender— and advisors have chargebacks. If a policy is canceled early, we have to pay back what we earned. A lot of people don't know that. That's a topic for another conversation. But the surrender charges are there to protect and preserve all the outlay of paying for the medical report, paying for the people to issue the paperwork, and like all the administration, all the things to put that policy on the books. The insurance company takes a loss for a number of years on an insurance contract. It takes a while to get that back. So they have— they're not going to take the hit if you cancel the policy. That gets pushed back onto the policy owner. That works with every type of insurance. So it's important to understand that. But those surrender charges are key, another key element. So people get trapped, like you say, Josh, and they're like, well, what do I do with this? I've got $100,000 in there, but my surrender charges are $40,000. They're going to keep $40,000 of my money. Well, can we limp it along or adjust things, reduce the amount you're putting into it, change this, change that, keep it going for 3 more years? Then we have established new coverage in place so you're properly protected with something that will last, that will be there when you absolutely need it. It solves your financial problems. And then we transition when that policy is able to be transitioned. So you, so you're not canceling something that's good coverage, but you're, you're weaning off of it with a proper replacement. Those are the types of strategies we have to work out with people on a frequent basis.

I think, I think too, like back to what we were talking about with the hockey stick thing and just these, like what happens with these is that it really is selling an illustration. That's probably, it assumes just like, you know, everyone says the stock market earns 8%. Well, that's an average. It doesn't take into account sequencing of returns and all that stuff.

A—

it's assuming compounding on 8%, which I, I always hear too, and maybe we can talk about this a little bit because I think this does matter, is there's no downside in IUL. You're protected from the downside, right? But Richard, you've kind of already identified that there— that, that might— that is true on like, from like a market exposure perspective because it's an index. It's like it's a, it's an option, right?, but it's not going to go below zero, but there's still the premium cost that has to get paid, right? So in that regard, yes, there's no loss that happens in the, in the fund that gets credited to you, but you're going to get credited zero. And then you still have those increasing charges every year. Right. And then add on top of that, if you're borrowing against it now to, to, to do investments or, or in retirement. Now that's an additional cost on top of something you didn't think you would have to pay, right? So I think, I think there's this idea that, um, that like it just, it, it kind of paints a picture that's maybe not realistic, right? Of an 8% growth rate over like compounds, like yeah, sign me up, right? And there's a reason, I mean, so, so it's, you have to be realistic about what happens in the market. One down year of compounding can really impact compounding, as we all know, right? That's why—

It's actually worse than that. Yeah. Do you want to know why it gets worse? Two fundamental things. Number one, human behavior, right? Nelson's book is 30% based on human behavior. And human behavior matters in a par whole life policy. It most definitely matters in the implementation of the concept of becoming your own banker. Which, if you're planning on doing it or you're thinking about doing it, your behavior also ties into your understanding of what product you should be using for implementing the process because Nelson clearly states it and it's right on the Nelson Nash Institute website. So if you're looking at implementing this process and not doing it with the appropriate tool, you're already off the mark and you need to check in on your thinking and your behavior. It's a fundamental fact. It's very clear. It's a registered trademark. Are you tired of watching your hard-earned money leave your family and go to the banks? Look, our number one bestselling book, Don't Spread the Wealth, shows you exactly how to build a family banking system that creates true generational wealth. Get the free digital copy plus over 4 hours of bonus videos and our guide to hosting family banking meetings. Go to don'tspreadwealth.com. That's don'tspreadwealth.com. You might be able to borrow from a policy and go do things, but if you— just because you can do something doesn't mean that you're following through on the process. Okay. Now, here's a couple of key things. Those illustrations you're talking about, Garrett, that not only do they have an investment return attached to them, absolutely, that's the case. And so they can look fantastic on paper. Right. But the moment that illustration is printed, it becomes a fiction because not only can we not guarantee what the market's going to do, but most importantly, It's the problem isn't the market. Also a problem. But the real problem is not the market. The real problem is the human policy owner.

Right.

And if the projection shows a certain amount of funding or consistent funding and you miss a year or you miss 3 years or you don't do it or you don't do the same level because life gets in the way, by the way, that happens to everyone I've ever met across the board exclusively where they had the best intentions and something got in the way and they weren't able to follow through. That is called life. Swift kick in the nuts. Boom. It happens. And so, the moment that that happens, and it usually happens in the early years, in the first 10 years, once you're off track, you forget through the busyness of life to even get back on track. And so, then it extends the period of time when you need that compounding focus to actually create the end result. So, most people won't achieve the end result, not because it's not possible or because the market may not do what you think it's going to do. It's because the human behavior erodes your possibility. And time is your number one enemy. So, if you match your crappy behavior, which happens, and a crappy outlook on time, you've got a nuclear time bomb of a policy waiting for you at the end, regardless of how well the market does.

That's right.

Okay, so people sell based on an illustration, which is the problem. They're not talking to people about their own behavior and accountability. It's not coaching, it's product sales. Okay, that's a fundamental big difference. So the product isn't bad. Universal life in whatever format isn't inherently— it's just a tool. The tool isn't— the chainsaw that you have sitting in your garage isn't good or bad if you're not maintaining the chainsaw and the chain is loose and you don't oil it. And then the chain comes off while you're cutting a tree and it comes in, it whips you and takes out your eye. Was it the chainsaw's fault? No, that's your fault as a crappy chainsaw owner. That's your problem. You are the problem, not the product. Now, I want to expand on— oh, you got me going here a little bit. Loan behavior. Big. So repaying loans is a big, important thing. Here's the key thing, though, and this may be slightly different in the United States, but in Canada, If you have a universal life contract, you can take loans. It's a cash value policy. You generally still have contractual rights there depending on the generation of policy you got and when it was sold. Some of the loan criteria might be different. They tend to mess around with that from time to time, by the way. Here's the key element, though.

Sure.

In the US, Richard, actually, if you're market exposed, if you're invested in a market element of an investment type that has market exposure, even though the product is designed and sold by the same insurance company. Insurance company ABC, here is our list and our suite of products and index funds or, or SAG funds that you can access. There's a whole big giant list. We crafted it, we put it together, we sold it to you. Here's your options. They won't lend you up to 90% or whatever of those funds. You actually have to sell those units and transfer it into a more secure account like a GIC-style, term deposit-style, savings account-style account for them to give you appropriate lending on the product. They won't lend you the same criteria often on their investment pool inside of that. Did you guys know that?

No, it's probably in those, you know, 113 pages of illustration that they provide with the IUL.

Because, yeah, if the market comes down or doesn't perform and your loan exceeds— the moment the loan exceeds the surrender value or the limitation that they'll provide you for lending, the policy lapses. And that could also create a tax consequence. So not only is there the consequence of not having any death benefit and a lapsed policy, probably too old, being uninsurable, not having anything for your family, not having anything left for retirement, So a whole list of problems there. You might also have a big tax bill coming to you. So the problems compound.

Yeah, absolutely. And for the record, in the US, there's the same thing. You don't earn the same indexing on borrowed funds a lot of the time. I think sometimes you can, but it's the norm is direct recognition, which would be they don't credit at the same rate on the borrowed amount. So again, if you're using it for the compounding and this, you know, this, it's going to, and you're going to use it to borrow things. That's what it's sold to you as this is infinite banking. Tool, it doesn't even hold up at that point because you're not even getting that crediting if you're borrowing out the funds, right? So it's just, and again, like you said this earlier, it's not that it's a bad product. It's just that it's like someone handed you a chainsaw to like hang a picture on a wall, right? We, it's, it's, we want to make sure that we're, we're matching the right tool to the process that we're trying to do. Um, and I think too, we talk about this a lot at Ascendant and, and the Infinite Banking Community. Um, we are trying to take over the banking function, right? We— and what that means, like when we say that, right, we're talking about that, about how we finance things, right? And traditionally, in general, for the, for the, for the populate— for the general population, financing happens through a bank. Like, you go to a bank, you borrow the money, and you— and the bank profits, right? The banker controls the loan. We talk about the 4 players in the financial play, right? The banker and the bank owner control the loan and make all the money, right? Now, in a mutual company, we are— we can become those 2 players, right, with, with, with the participating whole life policy, which is what we sell. So Now it's not, it might not look as sexy as an IUL illustration, right? But I am an owner in the company that I'm able to borrow from now. And I'm also the banker, right?

Right.

Now with an IUL, I'm not those two things, right? It might look better on paper. It might, like you said, that fiction's a great story, right? But I don't have the control that I have and I don't have— I don't get the benefits of being— of borrowing the life insurance company's money, right? Actually, the participating policyholders get the benefit of the IUL holders borrowing the money. So I think it's, um, I think that's just something critical to, to, to draw a line on, is when we do infinite banking, we're really looking for control of financing and of the banking function, right? Right? And there's a reason an IUL is 800 pages, right? And a whole life contract is 121 pages or whatever it is, right? There are a ton of levers that the carrier can pull. And who knows, like, yeah, they might have not pulled them like you said in the last 40 years, but they haven't— they could pull them in the future when things, you know, when the markets change, which they're going to, right? Like, history shows that things happen. It's not guaranteed to go up every year. And so I think it's just—

yeah, I don't want to cut you off, Gary.

No, go for it.

It's great in alignment with what you're talking about. There's a, um, a recent report. I'm actually going to be unpacking it probably on another podcast episode, but I'll plant a seed here. And it's done by the Canadian Life and Health Insurance Industry, and it talks about the state of the insurance industry to a large degree. And one of the big topics in there has to do with the direction and the trends of where kind of sales of products are going. And so, like, the sale of whole life insurance products is through the roof, and the sale of universal life products is in a drastic decline. But more to the point, and even talked about one key element, one of the major life insurance companies in Canada— I call them the Big Dumb Green, that's just my word for it— they offloaded a massive chunk of their universal life block of business to reinsurance companies, and they removed it off their book. Because of some of the associated risks with maintaining that block of business and how it was potentially not reflecting well for stockholders because they're a stock company. There's a lot of things happening in the background. And we talked briefly about how there's an offloading of risk. Some of the offloading of risk is not clearly understood and seen. And that is this: policies have charges over time. When the policy is sold, we don't know what the future charges are going to be, so we have to make an estimate. That estimate is what the actuary does.

Okay.

It's like, look, here's a straight line. This straight line is what we hope and view is going to happen if everything goes perfectly based on all of our assumptions. This is the straight line. Well, year by year, we might be above the line, which means we did better than expected. We might be below the line and we did worse than expected. Does that make sense? So any year that you're above the line, that's surplus, and you're below the line, you've got a negative that happens there.. And so, those have to get accounted for. Look, if you run a business, you know how critical it is to control your cash flow. Leave a comment with the financial hurdle that you're facing right now. Your insights, your questions, they inspire us to create episodes that give you real strategies to grow your business on your terms. Well, in whole life insurance, that risk is 100% of all those elements— mortality costs, lapse rates. Taxes, literally anything under the sun is taken on and absorbed by the insurance company because they take on that fundamental risk and they are owning and managing it on behalf of everybody. They have to price the product accordingly to that risk. With the universal life contracts, they actually pass those risks back onto the policy owner. So there is the potential that actually rates— the rate on your 1-year cost of insurance or whatever could go up. It could even be higher than expected. And some of the other issues could change because their assumptions weren't accurate. So, when they look at the long-term history and they see what's really going on and say, well, actually, we kind of duffed it back in 2004 when we built this product or 2026. Turns out we have way more death claims than expected. We had way more lapses than expected, which means we didn't get all the premiums coming in that we expected, which means all of our assumptions are off. Which means we have to pass that buck forward to the policy owner because that's the contract you signed. People don't understand that that happens. And that right there is a real fundamental risk because it's a lack of knowledge, lack of education. Many advisors don't know it takes place, and they're not trained on that from their wholesalers or from the life company either. So, you have a downstream level of events that takes place that all ultimately come back to the policy owner. At the end of the day, we're here to look after the policy owner. So we have to make sure that they're well informed about these, these types of items.

Yeah, I'm glad you mentioned that. You know, it's like generally we'll be called agents and I just don't like that term agent. It's too broad. Advisor, guide, coach. I mean, you know, there's a lot of complexities in the insurance industry and I would love it. If everybody did their own research. But we know that that's just not going to be the case. So they rely on advisors, guides, coaches like us who have done the research, you know, who do live this day in and day out, who understand the pitfalls, are looking out for the clients, you know, for, you know, trying to do the right thing by the client. And so, you know, you say, Richard, every podcast episode that you do, is a question that one of our clients had that gets an answer without having to ask the question. So hopefully this episode has answered some questions for people around IULs and like, you know, like we started with the questions that we're hearing out there when we're talking to prospects and people who are exploring this concept and considering integrating it into their lives.

So, well, I'll go ahead, Richard. I want to show a couple of— I'll let you get in here, Garrett, but Before we close today, I do want to show a couple of elements as well, some screen shares on a couple of things. So just so our listeners and our YouTube viewers have some extra reference points that after this episode they can kind of dig into some more, kind of tied into that a little bit, Josh. So go ahead, Garrett.

Well, I was going to say, like, so I do want to have like a call to action for folks like Josh, right? Like, what do you do if you have an IUL and you're exploring infinite banking? Right? Like, what, what would you guys recommend that someone listening who's like researching this, or maybe they're like sold on IUL and are like kind of on the fence, like what should they do next? What's the next step?

Um, well, I mean, I think the next step is number one, like, if you're— you, you should have it reviewed and assessed by someone. And you may have a good relationship with your present or current advisor and that person probably was doing their best to look out for you based on the knowledge they had. Doesn't mean that they were trying to do anything nefarious or whatever. People get a bad taste in their mouth when the word insurance comes up, and it's because of things like this that occur. Unfortunately speaking, most of the individuals are really wonderful, amazing, caring people who are doing their best with what they know. It doesn't mean that they did anything negative for you. It just means that they may not have had all the clarity and also that you may not have had all the clarity. And most importantly, if you didn't have all the clarity, that's the thing that needs to be corrected. So you need to seek that clarity. You can book a clarity call. There will be a link down below in the description. You can do that with a member of our team. If that is the case and you want— you have one of these contracts and you want to unpack it, well, number one, you should write down what are your key questions. You need to make sure you show up to that meeting with a statement, or better yet, you email the advisor you're going to be working with, who's going to— you're going to have that meeting with. Send them the statement in advance and say, hey, I'm interested in the infinite banking concept. I want to explore that, but I have this already and I have questions and concerns about it. Can you provide me some guidance? Now, that guidance isn't going to be, wow, get rid of that insurance contract. That's a piece of junk.

Okay.

Like, maybe it is a piece of junk. I don't know that. But it's going to be, hey, look, you have protection for your family. What was the reason you got this? What was the original intent? How well have you been funding it? Have you been doing what the projection shows or not? Like, do you have surrender charges? What are your actual objectives? What have you learned about the infinite banking concept thus far? So it's like there's a difference between having an insurance conversation and having an infinite banking conversation.

Absolutely.

That's a really good point. Those things, they coalesce. But sometimes before we can have a proper conversation about infinite banking, we have to put that on pause and say, look, the insurance hat's on right now. It's like, you got some issues and some problems happening right here. Can we just address these and triage the situation first?

Right?

Like step into the emergency room. Let's see what's going on. What's bleeding? What do we need to correct? And then based on that correction and those adjustments, now can we park that for a second and talk about what you've learned about IBC and do we want to incorporate this into the triage process somehow? So there's a well-rounded review that's happening with all this and people should get— yeah, you should have a proper conversation about it with someone with a fresh pair of eyes.

And I think there's no shame in that either. Like, it's perfectly fine to, you know, like ask questions and meet with someone and get help, right? Like, I think Josh is a great example of that, right? Like, he thought he understood it and then once he did understand it more, made a, a better informed decision, right? And, and exactly like Richard said, there are scenarios where it might be a good fit for what you're doing, right? And you might have been properly funding it, and that's great. But, um, just having a good, a good discussion with someone who's an expert in this stuff, I think, is, is really important.

You guys might find this interesting. So, I mean, I have a handful of clients that have UL contracts. They're not index contracts, they're just universal life contracts with a few different companies. They had them prior to meeting with me. There's no reason for them to get rid of those contracts, right? For a couple of reasons. Number one, the ones that they have were actually— in Canada, they were sold as a level cost coverage. So there's not an annually increasing term insurance that's going to cause an implosion. Number two, they still serve and satisfy quality death benefit as part of their overall plan. They, they don't— aren't really building any cash value. So we reduce their funding to the minimum level. So it's really just an insurance contract. It's basically like a term-to-100 contract fundamentally. There's a little bit of cash value in there, not a lot. They could still do some borrowing very ineffectively, but we preserve the coverage. If it's good coverage, they got it 10 years or 5 years or 8 years before they met me. They locked in a decent insurance rate for that amount of death benefit. It's a logical thing to maintain. So we're not trying to nuke all these things. People show up and they already have good insurance. I mean, that's great, right? I don't need to spend as much time talking about properly insuring your family. We can spend more time about all the other fun stuff, right? Like, that's good. So, you know, the goal isn't to nuke all these good coverages. It's to make sure you have good balance and you also have a depth of understanding. Part of the problem is that the consumer doesn't understand what they have. They show up with a junk drawer full of crap and then they have to ask another person questions about why they have it. But that's because they're not taking responsibility and ownership over the decision to buy the thing in the first place. So we're going to work with you on helping you take that responsibility and that ownership stake in your own financial future. Because if you don't have an ownership stake in it, we most definitely can't. Right.

It's good, Richard.

Let's, let's unpack a couple of things here real quick, guys, before we close this out, because we got some— we covered some good ground. So I'm going to bring up this here just to show everybody. So this is our episode that we did with Robert Rickards. So Robert is— he's been on the program once. A really neat guy, and he talked a lot about the lawsuits that he was running. Now, this episode aired a little over a year ago. I think it was probably in June or July of 2025. Great episode with Robert. I actually tracked him down and invited him to the program because of his work on these lawsuits that he's doing. So a lot of good conversation here. I think it's about an hour long, but there's a lot of different things. What policyholders should be aware of, warning signs, examination, the cost structure, represent— misrepresentation of facts, flags in aggressive universal life sales that he sees from a legal perspective, that he often is not just suing insurance companies, he's suing the advisor as well who sold the product, um, regulatory environment, all these different things. So there's, there's a lot of key, uh, elements covered in this. It's a really good reference point for people. Hey, quick favor, if you like what you're hearing, smash the like button, subscribe, It literally only takes 2 seconds. That really helps us reach more families and more business owners, folks just like you who need these strategies for real financial freedom. The next reference point I want to give everybody, and I'll adjust my screen share here to a different one, is a frequently asked questions page that we've developed. And, you know, people are starting to get accustomed to it here now. And I would encourage everyone to give, give a chance to go check it out. There's not a ton in here about specifically universal life stuff, but there's a lot of stuff. We get questions all over the map, all over the sun about elements around infinite banking. There's things here that are generic. They cross borders. It's not US or Canada specific. There are some specific Canadian things. There are some specific US things. In general, these are the common questions that we get. There's over 100 questions that we have that we've received over the last 17-some-odd years. And almost all of these things are covered here. There's a lot of stuff around policy loans covered here, repayment of loans, creditor protection, legacy planning, some cross-border things. So, I mean, there's a ton of information here. There's access to other YouTube videos that you can tap into, some blog articles. So there's a ton available for people. If you've got questions, this is a resource that we're putting together for you to access and be able to start learning some of those things. So with that in mind, you know, I think I'd like to tie it together with a couple of things on going back to page 39. We started there and we kind of got distracted. I want to circle back to what Nelson says on this, that this happened. These, these policies were created during a time of high interest rates, like I mentioned, and they looked good in the early years of the policy. Well, the looking good in the early years of the policy is still taking place today. The difference is we're showing an investment rate of return. You're not getting a savings element. You're getting an investment element, which does have a level of risk. Nelson said, when I first saw the policy, I ran illustrations and they kept falling apart when the insured person attained age 65 to 70. Now, at the time, the mortality age was different. Now, we're seeing it progressing further out, of course, because people are living long. The cost of a 1-year term became prohibitive, cost prohibitive. At the advanced ages and ate up the cash fund. So Nelson saw this for himself in the original version. The same thing applies today, and that's really what we dissected a little bit. Therefore, I never sold one when I was in the business and I surely wouldn't buy one. Nelson Nash won a ton of awards. He sat on all kinds of committees. He was a Lifetime Achievement member and he was a member of the Million Dollar Roundtable, was a very ultra-successful life insurance person for many years. I think he for probably 35 years never sold one and would never buy one. That statement should help you with your thinking. Okay. The guy who created this concept and invented it says don't ever buy one. All right. Next, it came Executive Life out of California. They made a big splash in the business and ultimately went broke selling these types of contracts. I understand that policyowners actually lost money with their policies. That's a reference point to a historical element. And then he goes on to say a few other things. I suggest that you read the book, The Truth About Mutual Funds, then read The Battle for the Soul of Capitalism by John Bogle, the originator of the Vanguard Fund. These two books are vital to their understanding of what goes on in the industry. Also read The Pirates of Manhattan by Barry James Dyke. Barry Dyke, we've had on our podcast a couple of times. He's written some amazing books.. And when I first met Barry Nelson, had him up on stage to speak, and he introduced me, said, we need to hire Secret Service to follow this guy so he doesn't get taken out by the stock market industry. All right. So, The Pirates of Manhattan explains what goes on in that industry. Upon completion of these 3 books, you should adequately have informed yourself to make an intelligent decision as to whether you would consider variable life or universal life. In essence, Your research— Nelson's already given you the map on how you should go about doing your research so that you can make that intelligent decision. When I was with Equitable Life of, uh, formerly of New York— and, uh, Equitable Life, uh, not the one of Canada because there was a previous one that now got purchased out and is rebranded as a stock company— I never sold one of these policies and I would never buy one and I would not recommend it nor use it for the infinite banking concept. You can't get any more clear than that, than the originator of the policy and the guy who locked down the copyright and trademark of the concept. So I mean, in my opinion, argument over. No, you cannot do infinite banking with a universal life contract of any type, and it is not infinite banking 2.0. So if you see shenanigans online from the Tic Tacs and the Instagrammies about all that stuff, recognize that you're smarter than that activity that you see. You got a squishy mass in between your ears and it can compute that that's just not okay. And then you can go talk to a proper authorized practitioner about the concept. How did we do today, guys?

I thought it was great. I really appreciate the platform and yeah, the support and the knowledge. Yeah, thanks for everything. And I hope this was helpful for other people, not just us.

Awesome. Yeah. Thanks, Josh. Yeah. Final statement for Garrett.

Yeah, it was great, Richard. I, I, something I learned and just was, is really helpful to understand is the ART versus the cost to 100, the level cost and how that works. Um, and an IUL and, um, hopefully that's really enlightening to other people as well who are, who are looking into these, um, as a tool.

Yeah. And for the record, I only sold one and I only bought one and it was sold to me by me. To me, haven't done it since. One and done.

Well, I like to say, you know, I'm slow, but I'm worth waiting for, Josh. So, no, no, that's great. And we appreciate your confession. Maybe we should label this episode Confessions of an IUL Salesperson or something like that.

IBC Practitioner. Yeah. Yeah.

For everyone, of course, listening and watching us on YouTube, Thanks again. You'll see access to some videos that popped up. We have some great stuff in the description. Make sure you check out ibcfaq.com and make sure you also watch that great episode that we had with Robert Rickard and keep your education journey flowing. There's no such thing as having arrived in knowledge.