Frequently Asked Questions

Answers to the questions we hear most about Truth Concepts software, training, and the financial concepts behind the calculators.

The Software and Training

What is my Max Potential? What is Maximum Potential?

Maximum Potential is a TruthConcepts calculator that proves how much money passes through your hands during a lifetime, based on income earnings, account earnings, taxes, debt payments and lifestyle. It is used to prove Currence works. It is used to show total lifetime income that illustrates the value of disability income insurance, and can be used to prove Human Life Value as well.

What is funding

The Funding Calculator is used in conjunction with the Life Values Tool in order to prove the internal rate of return of a life insurance policy, along with an equivalent rate of return after taxes and term costs and management fees have been added. This calculator can be used to not only compare the dollar advantages over the other investments, but also the benefits in terms of the liquidity available and the flexibility compared to other investments

What is distribution?

The Distribution calculator was built to demonstrate the Permission Slip idea which gives the insured the ability to spend down or pay down after tax investments in a more tax efficient manner. It is ideal to show to a 30-45 year old so they can see the value of the death benefit or face amount in their lives. This helps to visualize how long money will last based on the yearly retrieval amount.

Are there tutorials? Are they transcribed?

Each tutorial (the 10 minute videos) is transcribed on the blog. On the left hand side of www.truthconcepts.com/blog click on Tutorial Transcriptions for a word for word replay of Todd’s language in the video.

what is the best order to use the calculator in?

Our recommended order for clients is Max Potential, Auto, Funding, and then whatever the client’s “hot-button” is. We often use Diversification next.

Here’s how we start. “So, what do you think builds more wealth, increasing the rate of return or decreasing the costs to build that wealth?”

The client usually answers “Increasing the rate of return …that’s what I’ve always been told by the media and my other financial advisors”

Response: “well let’s take a look, I’ll pull up a Maximum Potential Calculator and we’ll figure it out. This is from a suite of calculators known as Truth Concepts. It enables us to be very transparent in our work with you by showing the gains as well as the costs. You can actually buy the software yourself if you so choose at www.truthconcepts.com .

We use it to analyze all sorts of things about your finances as you can see here on this list of calculators, but for now let’s look at the issue of returns versus costs”

“We want to make sure we are telling the whole truth about the situation.”

Where do I get the maximum potential calculator?

The person who referred you here should own the TruthConcepts Calculators and can show you your Maximum Potential. Alternatively, you can download the calculators free for a limited time at truthconcepts.com

what is a rate calculator

A financial calculator differs from a regular grade school math calculator in that it incorporates time value of money. Essentially all TC calculators are extrapolations of the 5 aspects of financial calculators which are Future Value, Present Value, Payment, Interest Rate, & Time Period. Similar to an HP 12-c or a TI BA2, the TC Financial Calculators enable you to see each input as well as the answer.

what is the difference between a financial calculator and a regular calculator

what is truth concepts?

TruthConcepts is a suite of calculators that numerically proves both the gains and all of the costs of building assets. It also demonstrates how the presence of Whole Life Insurance can make small assets act like big assets.

Financial Concepts Behind the Calculators

What is a Mutual Company?

A life insurance company owned by its policyholders. Examples are Guardian, Northwestern Mutual, New York Life, Mass Mutual, Penn Mutual, Mutual Trust, One America, Lafayette, Ameritas, Security Life of New York, Security Mutual, Foresters, Lutheran Brotherhood, Knights of Columbus, State Farm, Navy Mutual, Southern Farm Bureau.

What are current dividend rates?

In 2025, gross dividends stated on Life Insurance company’s websites are in the 5.5% to 6.3% range. These net down to 3.7% to 4.6% depending on age. See the Funding Calculator to learn how to measure this differential. Guaranteed rates are in the 3.0% to 3.5% range and net down to 1.0% to 2%.

I’m interested in a Whole Life Policy.

Great, let me suggest you email Katie@TruthConcepts.com so she can find someone to help you. TruthConcepts is connected to Whole Life friendly agents throughout the United States and in Canada.

What is Currence?

A CashFlow app that drives savings behavior. Unlike a budgeting app that tries to look into the future to see what you’ll spend, Currence looks backwards to measure what you have saved. Reach out to Katie@TruthConcepts.com for an invitation.

What is human life value?

Human Life Value can be proven out on the CashFlow calculator. It is a measurement of the maximum amount of face value or death benefit a life insurance company or combination of companies will give you at any point in time. It doesn’t matter whether this coverage is term, group, whole life, universal life etc. Good rules of thumb are 15-30 times income (depending on age) OR 1 times gross worth.

What is gross worth?

All of your assets added together. Whereas net worth is Assets minus liabilities, gross worth is just total assets.

what is universal life insurance

Universal Life Insurance is a hybrid policy, combining term insurance with a savings account style asset. Unlike Whole Life which has a built in guaranteed premium, guaranteed cash value and guaranteed Death Benefit, Universal life may only guarantee an interest rate. The Accumulation calculator can prove the whole truth around this product.

What is indexed universal life insurance

Indexed Universal Life Insurance is built on the same structure as regular Universal Life Insurance, except instead of using a savings account to build the asset, it uses the mirror of an Index Fund. The Accumulation Calculator can be used to prove the whole truth around this product.

What is the difference between Whole Life and Universal Life?

Whole life has a guaranteed premium, guaranteed cash value and a guaranteed death benefit built in without any special riders needed. Whole Life is the only truly permanent protection. Universal Life is often called permanent and may need a rider added to it in order for the death benefit to pay out. One should always compare the guaranteed column on the illustration in order to determine whether something is permanent.

What is an illustration?

Life insurance companies produce Actuarial Illustrations on their Life Insurance products that are generally 10-20 pages long for Whole Life and can be as many as 40-50 pages long for other types of products. These illustrations can be copied and pasted into the TruthConcepts Life Values Tool in order to see the whole truth behind the numbers which is then proven out on the Funding Calculator.

What is the life values tool

Life Values, or Life Insurance Values Tool is a behind the scenes tool inside the TruthConcepts suite of calculators that enables the user to copy and paste the life insurance illustration into it in order to populate the following calculators with life insurance data: Funding, Borrowing, Diversification, Distribution, Qualified Plan, and Asset Flow.

What is PLI

PLI is Permanent Life Insurance, typically only Whole Life.

What is a permission slip?

A strategy (something that you do) that goes along with the Whole Life product (something that you buy) that has a guaranteed death benefit or cash payout upon death which enables the insured to spend other assets fully during their lifetime because they know the cash payout will come into their estate upon death. This can reduce taxes and the impact of market volatility.

What is Insured?

A life insurance policy is “on” the insured. In other words, when the insured dies, the life insurance will pay out in cash to the beneficiary. The insured can be the owner, though it cannot be the beneficiary. The owner can be a beneficiary if the owner is not the insured. For example, Vince can be the owner and the beneficiary of his wife’s Jane’s policy. Jane is the insured. Additionally Vince can be the owner and the insured of his own policy with Jane as the beneficiary. Trusts can also be owners and beneficiaries. Insureds can be minor children, adult children, business partners etc.

What is Owner?

Owners can be Individuals, a parent, a grandparent, a business partner, a trust, a LLC, a Corporation, etc. Minor children should not be owners.

What is a Beneficiary?

Beneficiaries can be individuals, spouses, trusts, business partners, stockholders, entities (though there are tax issues), etc. Minor children should not be beneficiaries.

What is a Spend down?

The spend down or paydown is best demonstrated on the Distribution calculator which proves the tax efficiency of reducing the principal of an account (versus taking interest only). This is often known as a Permission Slip strategy or the ability to utilize one’s death benefit while living. The strategy can reduce taxes and market volatility.

What is a Pay down?

What is dollar cost averaging?

DCA or dollar cost averaging is an often-touted way to get small amounts of money into a mutual fund on a consistent basis in an effort to smooth out the up and down nature of the stock market. However, using the Cash Flow calculator, you can tell the whole truth of the matter and prove that average does not equal actual.

What is conversion ability

Conversion ability is the opportunity to convert or switch term insurance to whole life. It is most often only available from mutual insurance companies since stock companies don’t provide whole life. Some term insurance converts only to Universal Life.

Should I prepay my mortgage?

You can tell the whole truth around mortgages, their amortization schedules, whether pre-paying or adding extra principal is valuable with the Loan Analysis Calculator. Refer to the book Busting the Interest Rate Lies by Kim Butler or ask your advisor for a full explanation. There is a Mortgage Macro that steps one through this discussion as well. The bottom line is when all time frames are equal and the facts are boiled down to only one change at a time, the costs of all 3 ways of paying for a house are the same. Cash, a 15 year mortgage, or a 30 year mortgage, when opportunity costs are included, are all the same.

What about investment real estate?

The Real Estate calculator at TruthConcepts enables you to fill in property value, price of property, closing costs, land value, basis for depreciation, loan amount, annual rate, property taxes, insurance, maintenance, income bracket, capital gains tax, depreciation recapture tax, months for analysis, and property appreciation. Then the TruthConcepts Real Estate Analysis calculator can define the IRR or Internal Rate of Return that particular property generates.

How much is a whole life commission?

Life insurance is a regulated industry and all companies pay 55% of the first year’s base premium as commission on the first year only. There may or may not be second year renewals. There also may or may not be a percentage paid on any Paid Up Additions contributions.

what is pua? What is a paid up addition?

A PUA or paid up addition is extra money the owner of a life insurance policy can put into the cash value. It also must increase the death benefit of face value of the policy in order to stay under the Modified Endowment Contract limit. It does generate dividends, and one dividend option can be to purchase additional paid up insurance or paid up additions which increase both cash value and death benefit.

What is a modified endowment contract? Or What is MEC? Or What does MEC mean?

Modified Endowment Contracts (MEC) are life insurance policies whose funding has exceeded federal tax law limits. These limits are on the amount of cash inside a policy in relation to the death benefit and are in place to avoid abusing tax advantages inherent in permanent life insurance.

What is Busting the Lies? Busting the Lies series?

A series of books by Kim D. H. Butler, wife of TruthConcepts creator Todd Langford that you can find on Amazon in soft copy, kindle or Audibles formats. They use the TruthConcepts calculators to prove their numerical arguments. Busting the Retirement Lies, Busting the Interest Rate Lies, Busting the Life Insurance Lies, Busting the College Planning Lies as well as Perpetual Wealth and Live your Life Insurance are all included.

What is live your life insurance?

A book by Kim Butler that covers how to use both the cash value and the death benefit of your whole life insurance policy while you are living. It also has a thorough glossary with all the life insurance terms. Part 2 demonstrates the Permission Slip concept using the TruthConcepts Distribution Calculator.

Who owns you?

Truth Concepts™ Software available at www.truthconcepts.com 903-822-4133

With support by Katie Jackson support@truthconcepts.com and articles by Elizabeth Hagenlocher Elizabeth@pem.email

Should I save money?

Yes, ask about Currence, the cash flow app that drives savings behavior. The person who referred you here can invite you or reach out to us at support@truthconcepts.com and we’ll connect you to someone who can.

Should I pay off my car or my credit card?

What is the interest rate on each? Typically you’ll want to pay off the higher interest rate debt first, that is the best financial decision. However, sometimes a psychological decision made from behavior drivers is better, in which case it may be the smaller debt first to give that feeling of satisfaction. We also recommend you build up savings at the same time. Check out the Currence app.

Is it best to pay for college with a loan or cash?

I can calculate the cost of college with the Education Cost Calculator. Then you will want to speak with the person who referred you to answer your question based on your own cash position, ability to get loans, etc. Also see Busting the College Planning Lies book on Amazon (paperback, kindle and Audibles).

Where can I get advice on insurance?

I can help you some, yet the person who referred you here can personalize your learning more. Think about how you learn best, reading, watching, or listening and then we’ll find you resources for that learning modality. Life Insurance can be a fun subject to learn about and we look forward to helping you.

I’m interested in buying some real estate property. How do I know how much I can afford?

Is this a primary residence or an investment property?

I can calculate the ROR on either type of property with the Real Estate Calculator from TruthConcepts.com, yet it might be best if you got help from the person who referred you here so it is personalized. I also have a loan analysis calculator to determine the monthly principal and interest payment based on the loan balance. Of course taxes and insurance are usually added on top of that.

I’m interested in life insurance. Where do I start?

Let’s figure out how you learn best, reading, watching, or listening. Then get back with the person who referred you or email support@truthconcepts.com with your name, date of birth, and state of residence. Then a sample illustration can be provided to you for learning purposes. Additionally, you’ll want to hear the Parallel Paths story to be clear how life insurance fits in with all your other assets.

My child is going to college. What do I need to prepare for?

Missing them! Yet seriously, from a financial perspective, while you may feel like your home expenses reduce, your child still needs food and transportation. Depending on whether they are working during school or not, and how far away the College is, there may be additional travel expenses.

Should I max out my 401k?

How much (if any) is your match?

I can use the Qualified Plan calculator to show you the whole truth around the 401k that will help you decide if you would be better maxing it out or just contributing up to the match level and saving the difference into an after tax account for increased flexibility.

I have a 401k plan. What should I do with it?

Are you still employed at the company where it is held?

If so, you probably have to leave it there until you leave their employment. If not, you can roll it over to your new employer’s 401k plan, or into a Self Directed IRA. Get back with the person who referred you here for some ideas on what to do next.

I’m interested in a whole life insurance policy.

Great, that is an efficient product to store cash for emergencies and opportunities and it has a guaranteed death benefit (sometimes called Face Value) that pays out for your Legacy. Get back with the person who referred you here for a sample illustration. Also think about how you learn best (reading/watching/listening) so we can guide your towards additional resources for increasing your education about the product and its numerous strategies that go with it.

How much life insurance should I buy?

Ideally, your Human Life Value which is 15-30 times your income or 1 times your gross worth (all your assets added up). Work from the top down using term insurance to fulfill your Human Life Value and from the bottom up based on your cash flow to buy Whole Life Insurance based on your ability to save money monthly or annually. Ideally you’ll have a mix of convertible term insurance and Whole Life.

Should I buy Universal Life?

Do you want to guarantee a death benefit will be paid out upon your passing for Legacy purposes? You’ll want to look at the guaranteed elements of a life insurance policy illustration to confirm the policy will live as long as you do. Typically Universal Life is better for a medium term of time as even if it has a Guaranteed Death Benefit rider, often the fine print nullifies the rider if there are late payments or other issues all along the way. Get back to the person who referred you here for more details.

what is cash flow bridge

Cash flow bridge is a white paper written by Todd Langford that proves out a strategy proving how Sequencing of Returns is a detrimental aspect of a stock market account and by pairing it with either a savings account or a Whole Life Insurance Policy whereby the liquid account supports the investment account during down years, you can overcome the negative impact.

Email support@truthconcepts.com to get access to the white paper known as Cash Flow Bridge.

What is HECL?

HECL stands for Home Equity Credit Line. There are a variety of strategies promoting the use of a HECL to pay off a mortgage early. Todd Langford wrote a white paper on the dangers of this strategy and it is available by emailing support@truthconcepts.com .

Do you have white papers?

Yes, we have 4 of them, Cash Flow Bridge, HECL prepayments, CRT, and Whole life v. Universal life. Email support@truthconcepts.com to gain access

What is Universal Life v. Whole life?

We always hear they are both “permanent” insurance. Yet are they?

The white paper explores both conceptually and numerically how the 2 products are different. It mixes in term insurance in order to make the comparison as close as possible numerically.

What is CRT? What is a Charitable Remainder Trust?

How can you sell Investment Real Estate without paying Capital Gains Tax? You consider a Charitable Remainder Trust, or CRT. The white paper proves this strategy using the Asset Flow Calculator.

How can you sell Investment Real Estate without paying Capital Gains Tax?

You consider a Charitable Remainder Trust, or CRT. The white paper proves this strategy using the Asset Flow Calculator.

What do premiums do in Whole Life?

They build cash value and increase the death benefit.

How quickly is my Cash Value liquid?

95% of it is liquid within 10 days and you can borrow against it or withdraw it.

How does my Cash Value grow?

by a guaranteed dollar amount annually and dividends if they are paid, get added to the guaranteed cash value every year.

How does borrowing against cash value work?

It is better than withdrawing in most cases, since borrowing enables you to put it back again via loan payback. There is an interest cost to the loan, yet the gross cash value keeps on earning dividends largely unaffected by the loan.

Can I 1035 exchange one Whole Life policy for another?

You can, though it is not generally recommended since all mutual life insurance companies and their products are largely the same and doing so would cost you the time, age and health rating you had in the first policy.

What are dividends?

Profits from the life insurance company paid to all policyholders. They are set each year in November for the next year and stated as a gross percentage rate. It is usually best to reinvest them in Paid Up Additions in the early years of a policy which allows them to grow tax deferred when left inside the policy or borrowed against.

Once paid, they become a part of the guaranteed cash value, causing an increase that sets a new floor and they can be used to pay back loans or generate income.

On my life insurance loan, where does the interest go?

Life insurance companies charge interest when we borrow their money just like banks and credit unions and other financial institutions do. Many statements are made in the market place about how we borrow our cash value. This is incorrect.

The whole truth is we borrow against our cash value, or to be more specific we borrow the insurance companies’ money and use our cash value as collateral. They charge us interest for this privilege because we have now removed money from the pool of capital they have to invest.

This is a good deal for everyone because the insurance company earns money, the owner of the policy gets use of the money while at the same time their cash value keeps growing and all the other policy holders know the insurance company is investing their money properly since the interest charged is reflective of the rates in the market place.

One might question the “market place” rate. Some companies charge a fixed rate, some charge a variable. Some have both available due to direct recognition.

There are two different methods insurance companies use to handle the loaned cash value — direct recognition and non-direct recognition. In a non-direct recognition company, the earnings rate on cash value is totally unaffected by any loans against cash value. In a direct recognition company, the earnings rates on loaned cash value are affected both positively and negatively when the cash value is used as collateral.

Generally, with a direct recognition contract, the collateralized cash value has a dividend rate that is a certain number of basis points lower than the interest charged on the loan. So if the current-gross-dividend-crediting rate is less than the gross-direct-recognition-crediting rate, then the collateralized cash value is affected positively. If the current-gross-dividend-crediting rate is greater than the direct-recognition-crediting rate, then collateralized cash value is affected negatively.

For example, let’s say the current-gross-dividend-crediting rate is 6.5 percent, and the loan rate is 8 percent with all loaned cash value getting a “100 basis point” (1 percent) reduction from the loan rate (bringing it down to 7 percent). That being the case, since 7 percent is obviously greater than 6.5 percent, borrowing against your cash value actually improves your situation because your gross-dividend-crediting rate will be at 7 percent for the borrowed cash value and 6.5 percent for the non-borrowed cash value.

After all the analysis we’ve done on many companies and policies, we’ve found either way works just fine. Maybe consider having both!

The interest charged by the insurance company goes to the insurance company, not to your policy directly. The reason for this is that when you borrow dollars from the insurance company, it comes out of the insurance companies’ investment pool and therefore they need to charge an interest rate for it to re place the interest they would have lost if it had stayed invested.

This interest does not add to your cost basis or directly increase the policy’s cash value that is being collateralized. However, the earning of the life insurance company (both from their investments in the market place as well as their investments in policy loans) are what they use to pay dividends to all policy holders.

If you choose to pay at a rate higher than what the insurance company charges, then this higher amount (the difference between what they charge and what you pay) can go to your existing policy in the form of a Paid Up Addition (PUA) which would increase basis, or to a new policy as premium so either way that can go to build your cash value.

As a reminder, PUA money goes 95% or so to cash value with only 5% or so increasing death benefit. This drastically raises the amount available to you for use in future years and is the most efficient place to store cash.

who is todd langford

Todd Langford develops financial calculators that create clarity around personal finance decisions. The Truth Concepts Software is a suite of tools and calculators that helps advisors compare various financial strategies—such as different investments, loans, rental properties, or tax strategies. Truth Concepts can do complex work, such as calculating the internal rate of return of a whole life policy or comparing different types of investments with unequal cash flows.

who is kim butler

Kim is Todd’s wife. She writes books in the Busting Personal Finance Lies Series, along with Live Your Life Insurance, and she helps out at Truth Training.

what is Truth Training?

A 3 day event held a few times a year in Houston or Salt Lake City where agent/advisors are taught the numbers and the stories that go along with each calculator. Todd Langford and his wife Kim Butler along with the TC team welcome you to join them for a “PhD in personal finance” as one advisor put it. https://truthconcepts.com/truth-training/ lists the next event.

where can i buy life insurance

Great, let me get you back to the person who referred you this link and/or find someone to help you. TruthConcepts is connected to Whole Life friendly agents through out the United States and in Canada.

who is vince d’addona

Vince D’Addona is the most respected Estate Planning Life Insurance Agent in the United States. He is available as a joint work mentor for prospects who own businesses, substantial real estate, and 7-8 figure estates.