My Biggest Misconceptions About Whole Life Insurance (CORRECTED) | Todd Langford 

Watch Parts 2 & 3 in this series with Todd as we dive into the numbers: Part 2 - ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-1s5LkzTrqdA.html Part 3 - ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-S7z_GjXEzjQ.html

Who wants to see part 2 of this conversation with actual numbers and calculators 😳😊? Comment below what questions you would like me to cover in our next conversation!

I want to give a major thank you to Todd for coming on the show! Please check out his website if you want to learn more about Truth Concepts - truthconcepts.com/

Really great video and I enjoy your thought processes and logic. That being said, I’m a huge fan of IUL and that’s all I own. However, I do recognize that it will take a lot of management on my part to make sure it works properly. Here are the reasons I like it better. 1. Under 65 years old, the annual renewable term insurance is far cheaper than WL which will allow me to grow my cash value more efficiently and robustly. As such, the DB can be far higher than WL when I’m working and when my family would need it if I were to die unexpectedly. 2. When I’m over 65, I can essentially (not really, but close) turn off the DB and the higher COI with the annual renewable term by switching the DB to level and telling the insurance company to drop the DB to the IRS 7702 minimums which are based on a % above the CV. At age 65, the net amount at risk insurance corridor needs to be 20% above the CV and that drops down to 5% above the CV at age 75. By doing that one maneuver which is a single form to the insurance company, I GUARANTEE myself that my COI will NEVER rise above 1% of the CV no matter how old and decrepit I get. For most years by doing that the COI is closer to 0.5% or less of the CV. That’s the only real fee I’ll be paying which to me is like an inexpensive assets under management fee. When I make that change, I’ll essentially be self insured but my CV will benefit from all the beneficial tax treatment within that life insurance wrapper. 3. I have a contractually GUARANTEED loan rate that is fixed at 5% for the rest of my life. I don’t need to be approved for that loan or have it underwritten or even have to pay it back. That loan also has the possibility of positive arbitrage although I fully recognize it has the possibility as well of -5% arbitrage in a down year. However, if I don’t want to play the arbitrage game, I can also choose a GUARANTEED wash loan that is fixed at 4% and also credits at 4%. 4. If I don’t want to play the indexing game, I can choose the fixed account which is currently paying 5.4%. While that’s not ‘guaranteed’, it is interest rate sensitive much like the WL dividend is. I usually do allocate about 20% of my CV to this account which easily covers my COI and my first 10 year policy fees. That’s one heck of an ‘&’ asset! In summary, BOTH IUL and WL can be GREAT ‘&’ assets to own and utilize! There’s really NO reason to bash one in favor of the other. WL is better if one isn’t interested in having to actively manage the policy and really cherishes a ‘permanent’ DB. IUL is better for those who are more micromanagers with a higher risk tolerance who understand the DB with IUL is ultimately meant to be a tax advantaged ‘self insurance’ policy when you’re older than 65. I fit into the latter category, but I know of many who are in the former. The REALLY GOOD AGENTS, like my agent, sell BOTH WL and IUL and they understand these fundamental pros and cons of each.

What a fun conversation gents! I feel a round 2 brewing 👏🏾

Terrific discussion guys - love the IRR overview - rockstar stuff. Also, very interesting points about IULs.

31:54 so good to hear its mathematical, nothing more, nothing less.

This was one of the only episodes I watched where I ended more confused than when I began...

Great video. The clarification of IRR (Internal Rate of Return) and the "Wild Card" discussion were very good.

Nice that you are re-tuning the book, for these alternatives facts that are being shared about compound interest. I ended up realizing, it's hardly possible to get positive leverage on the, loan vs div rate- but it doesn't matter if the funds have a worthwhile cause.

Loved this video!

13:22 balance is higher at the beginning of the term - tvm math governs it, no secret

Bonds typically pay simple interest

How is choosing a fixed rate for opportunity cost helpful in the benefit/ cost analysis? It's a future number assigned so calculations can be done. Any projection or estimated future dollar value is unknown until it happens.

I agree with most what you said, except when you said there will never be arbitrage. It really depends. Loan repayments throughout the policy year are directed to pay down the principal. By making repayments to principle over the course of the year, you are reducing the amount of interest accrued on a daily and overall basis. So if you are getting a loan rate at 5% and a IRR of 4% but you make those payments throughout the year, your effective interest rate can easily be lower than the 4% IRR

I like how he says interest over time is interest and the best rate on pure economics is the best option wether it’s compound interest, simple interest, or amortized interest. A guru tried to explain to me I should do something because of compound interest instead of simple interest. It was the dumbest argument and i really thought the guru might have known something I didn’t. I think it’s just a sales tactic people use to take your money when they use that language. I think Tom explained IRR well. I love the discussion about viewing the opportunity cost along with the equivalent asset value. When you compare an insurance asset to some other investment you really should factor in more than the IRR on the policy. Equation: Insurance policy IRR + tax deferred growth + tax free death benefit + other riders like chronic illness + access to capital for emergencies / oppertunities. (Wild card) VS. Investment opportunity ROI - potential taxes - risk of opportunity.

Thank you Caleb for this informative video. I would love to see a part 2. I have a couple questions. 1. Are there riders where your beneficiaries receive both the death benefit and the cash value? 2. I seen a video from IBC Global entitled “The Minimum Sale,” by Steve Parisi. Have you ever heard of what he is explaining in this video? If so can you touch on that as well in the second conversation? Thank you sir.

Is there another video or can you expand on IUL, I am trying to understand how/why an IUL will lapse, unless the person takes out loans and didn't pay them back? if I do not touch it, wouldn't the DB be there? thank you.

I listen to Todd and think I just never want to spend again :)

It will be interesting to see what actually happens with interest rates. The Feds number one priority that they shared is keeping inflation down. The problem with cutting rates and keeping the rates low is then inflation goes up as more money becomes cheaper and more money goes into the system. Now corporate debt and corporate real estate debt is so expensive with the rates currently that the fed is also feeling pressure that the rates need to come down or institutions will default on their debt. I think the Fed is at a crossroads where whatever they do will be wrong and the debt is going to get so bad that they are going to have to do an emergency cut and a massive recession will take place and we will start over and rinse and repeat what humans do best.

10.69 is the taxable equivalent rate of return that would need to be earned to compare to the rate of return inside the life insurance contract. In the example.

I think you should make more videos explaining this.

The value of optionality.

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I've observed a trend in some of your videos where you tend to echo the perspectives of your guests rather than fostering genuine debate. This is evident in your shifting agreements and disagreements, depending on the guest's stance. For instance, in your conversation with Mr. Brrr regarding car purchasing and profitability, you expressed alignment, yet with guests holding opposing views, you also find concurrence. It would be more consistent if you maintained a unified stance. Upon reviewing many of your videos, it becomes clear that unless there's a distinct advantage in paying less via the policy loan, engaging in such loans isn't advisable. Regarding my own experience with an IB account, I've taken a couple of 3K loans and promptly repaid them with interest, per instructions. While I saw it as contributing to savings for later use, there wasn't a significant revelation. I just wish I had known about this earlier, as my account would be more mature by now, instead of being only three years old.

I loved getting Wild Cards when I got dealt my hands in UNO!

But depending on the rate doesn't this make sense? If your mortgage is 3% then you would be crazy to pay that off early. You can get a better interest rate in a savings account. But if you're paying 7%? Paying it down means a relative 7% guaranteed gain. That's tempting. Where can you get 7% guaranteed?

Ok so if it is an IUL that is MAX Funded for the entirety of the policy,; do you see all of these horror stories probable?

Why don’t they just say compounded, yearly? The loans in a life insurance policy are compounded, yearly! If you don’t pay the loans back, it continues to compound!

Why should I pay 15% tax just so I can use my money tax free with fees and minimal returns?

I’ve put 95k in my IUL the past 5 years……my cash value is 63k. I’m starting to think Dave Ramsey was correct about these life insurance policies. This is not throw away money for a person like me. Maybe I got scammed by a “typical” life insurance salesman. If I put 95k on my house payment, it would be 95k less….not Fkn 63k less.