The name is catchy—”Wealth Beyond Wall Street.” Most people want to find wealth beyond Wall Street to avoid risk while still achieving their financial goals. And nobody willingly turns down financial safety, so everybody’s interested in becoming a safe money millionaire.
In this article, we share what’s actually going on with the main theories behind Wealth Beyond Wall Street and Safe Money Millionaire. You can decide for yourself if these financial theories are right for you and your financial goals. After all, it is your money, your life and your life insurance. You get to make the call about what you want to do, and you should be in control of your own finances.
As far as I can tell, these terms, originated with Brett Kitchen and Ethan Kap who have written two books named after the theories described in the books:
The product promoted in these books and theories is Indexed Universal Life, IUL for short. Indexed universal life or IUL products have risks associated with them that participating whole life insurance products don’t have. Let’s make something about indexed universal life clear real fast right here:
IUL is BASED on Wall Street performances and IS NOT beyond Wall Street.
That statement means that using indexed universal life or IUL to accumulate wealth (beyond Wall Street) will require you to rely on Wall Street performances. This wealth theory relies on Wall Street, despite the name. That’s where the risks with IUL come in. If you have a policy based on Wall Street performances, poor performances can cause your policy value to go down. And if your cash value is going down, then you aren’t accumulating wealth beyond Wall Street. This is the major problem with indexed universal life products.
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The owner of IUL policy(ies) CAN lose money in years when the index mirrored in the policy’s non-guaranteed returns goes down, trades laterally or even when it goes up marginally. Again, there are IUL risks that can affect your path to becoming a “safe money millionaire”.
News reports document how premiums have increased for thousands of IUL policy owners. Unlike Participating Whole Life Insurance, IUL premiums are not fixed for life So, during the time you hold the policy, your premiums could increase, and your life insurance could be costing you more for no increase in benefits. (You can pay extra for a guaranteed level premium but that defeats the purpose.)
Regulators in all states have now had to mandate agents and insurance companies to STOP using such high rates of return on their projected values in IUL illustrations. This is because there is no certainty in future market performance, and Indexed Universal Life Insurance is based on market performance. Pathetically, even these mandated rates of return are well beyond actual and compounded annualized growth rates. And so they are still misleading at best.
Every IUL policy we have ever reviewed here at Life Benefits shows the guaranteed cash values zeroing out prior to the life expectancy of the insured. That means the policy will lapse or the owner will have to continue to pay premiums even though cash values may remain at zero. This is because the cost of renewable term insurance, the basis of all IUL policies, continues to increase over the lifetime of the insured. Even though costs continue to rise in an IUL it does not equate directly to an increase in accumulated cash value. On the other hand whole life insurance premiums remain fixed and allow for the accumulation of cash value.
Of the IUL policies we have reviewed there are multiple risks (up to 25 in some IUL contracts) that the IUL policy owner assumes. With a Participating Whole Life Insurance policy, the insurance company assumes these risks. Because the owner of the IUL shoulders these risks they can lose money, lose the policy, face needless taxation, limit cash value growth and limit their access to the cash values to manage outside the policy with the Perpetual Wealth Code™. (Read more about The Perpetual Wealth Code™ here) Worst case scenario: all of the above could happen. So despite the name of “Safe Money Millionaire,” using IUL to accumulate wealth isn’t actually safe. There are multiple risks the policy owner assumes.
All IUL contracts that have been reviewed by Life Benefits offer a guaranteed interest rate in an attempt to offset downtrends in the index mirrored in the non-guaranteed accumulated cash values. But insurance companies who sell IUL can choose to credit this interest annually, every 5 to 10 years or even wait until your policy is terminated or a death claim is filed. This deferral, at the insurance company’s discretion, can be costly to the IUL policy owner due to the loss of compounding growth this interest would create. This is a risk which is avoidable by using participating whole life. With participating whole life, the growth is guaranteed annually. Dividends, which are also paid annually, add to this compounding growth.
Finally, the insurance companies control how much gain of the index mirrored is actually shared with the policy owner. In other words, the insurance company caps your earnings and uses the large profits to pay their shareholders (if they are a stock held company). Insurance companies also share with their participating whole life policy owners if they don’t have shareholders and/or are a mutual company.
So if an agent tries to sell you an IUL instead of a participating whole life insurance policy, you now have seven good reasons to turn down the IUL.
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Why should you expose yourself to all the above and lose control over your money for 10 to 15 years while the surrender fees associated with IUL policies expire all while the agent earns 50-70% more in commissions by selling you an IUL policy? That’s not a way to accumulate wealth (beyond Wall Street), and it’s not the way to become a true safe money millionaire. If you truly want ‘safe money,’ then you should use methods that don’t depend on the stock market, methods that allow you to accumulate wealth and create a financial legacy to pass on. It’s your money, your life and your policy. Why allow somebody else to control it?
Keep control and realize why the Perpetual Wealth Code™ utilizes Participating Whole Life Insurance to maximize the amount of money you get to keep. Here at Life Benefits, we can teach you how to use a safe whole life insurance policy to start accumulating cash value equity and creating your financial legacy. Know that having guaranteed, available, and manageable equity is the key to winning your financial GAME. And never, ever give the control of your money away to somebody else again because you now know the good, the bad and the ugly about indexed universal life insurance. It’s your money, and you should be in charge. That’s how to truly accumulate wealth beyond Wall Street.
Have you had experience with an IUL insurance product gone bad? Or know someone who did? Please share in the comments below.