What are some of the most outrageous anti-IUL claims on the internet today? David debunks some shockingly misleading claims presented by social media influencer Chris Kirkpatrick.
Claim #1: Indexed universal life insurance (IULs) were born from insurance companies wanting to scale down on whole life insurance policies because they could no longer pay guaranteed dividends and needed a new profit center just to break even.
This is just false because IULs were a result of the stock market crash of the early 2000’s.
Insurance agencies created a product that allowed investors to link the growth of their cash value to the upward movement of the stock market index.
Claim #2: Insurance companies lure you in with artificially high cap rates, only to reduce them once they’ve sucked you in.
According to David, cap rates change from company to company. However, the one he uses averaged a 7.09% rate of return since 2006 – this is quite impressive considering all the chaos witnessed in the markets during that period.
Claim #3: IULs are 100% guaranteed to perform worse than initially promised.
This claim is just laughable considering David saw an averaged 7.09 rate of return in the IULs he currently uses.
Claim #4: Insurance companies drop cap rates early in the surrender period when the sting of cashing out is the greatest.
Yes, surrender charges are harsh in the first 5 years of the policy. However, what Kirkpatrick fails to mention is that this is also the period when it least makes sense to cash out because average rates of return are usually higher – over 7.5%.
David admits that IULs are not perfect, but neither are whole life insurances. Kirkpatrick is just a creative agent whose main agenda is to sell you whole life insurance at the expense of an IUL.
According to David, when you choose an IUL, you sacrifice guarantees for higher rates of return. In contrast, when you choose whole life insurance, you sacrifice higher rates of returns for guarantees.
Mentioned in this episode:
David’s books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube