The Whole Truth about EIUL Part I By Todd Langford Go here for Part Two of this blog post: http://truthconcepts.com/the-top-10-reasons-not-to-buy-equity-indexed-universal-life One of the major problems with the agents and the companies that sell EIUL (Equity Indexed Universal Life, which is what it was originally called) or IUL (Indexed Universal Life, which is what the industry is now calling it to avoid SEC scrutiny) is the gross negligence in conveying the risks to the clients. All one has to do is carefully read the full insurance illustration or proposal to

Read More## Borrowing Calculator Tutorial 9m 43s Transcript

So let’s look at something a little different here, and let’s go to the borrowing strategy, here if we take the borrowing strategy and let’s look out over 30 years, no present value dollars, let’s put in 10,000 dollar a year. Okay, so what we see over this time is $300,000 so let’s start with understanding the shoe box for just a minute and if we have this shoe box and we’re putting in10,000 ayear into it for 30 years at the end of the time frame we’re going to

Read More## Truth Tip Loan Analysis Calculator

On the Loan Analysis calculator, you can title each of the loans (in addition to changing the title on the title bar) by right clicking on “loan 1” or “loan 2” and typing in 30 year mortgage and 15 year mortgage etc.

Read More## Average Does Not Equal Actual

Average Rates of Return are often touted by financial experts, and yet simple math can show us that Average does not equal Actual. Pretend that you invested $100,000 into a mutual fund that had promised an average rate of return of 25% if you left the money alone for 2 years. In the first year it earned 100%. After the first year, the investment would look like this: In the second year, the fund earned -50% (that is a negative 50%) and so now your investment looks like this: While your

Read More## Using the Loan Analysis Calculator to show difference between a 15 and a 30 year mortgage payment if applied to PUA.

How do we show what the difference between a 15 and a 30-year mortgage payment would look like if applied to a PUA (paid up addition) on a life insurance policy? Using the Loan Analysis Calculator we can see that when the savings rate and loan rate are the same, the gross costs of each mortgage are identical to each other when properly measured over the same time frame. However, when the mortgage interest deduction is taken into account, the longer mortgage has less cost. In order to show the difference

Read More## Manifesto on Solutions for the College Education Dilemma

Our kids are too important to sacrifice to the status quo! Download a free version of Seth Godin’s manifesto on solutions for the college education dilemma, here is the link: https://seths.blog/wp-content/uploads/2019/05/stop-stealing-dreams6print.pdf

Read More## How do I explain the difference between Total IRR and Annual ROR on Life Values?

How do I explain the difference between Total IRR and Annual ROR on Life Values? The Total Internal Rate of Return is based on the cash value (and we also have one based on the death benefit) and it starts very low and increases over time. It usually shows a negative 100% first year because we have zero cash value in the first year but the IRR appreciates and increases over time. It is however, weighed down by the early years as IRR is a “cumulative” column as opposed

Read More## How to tell the whole truth about Direct Recognition.

How to tell the whole truth about 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, the loaned cash value has a dividend rate that is a certain number of

Read More## Truth Tip on Borrowing Calculator

On the Borrowing Calculator, just left of the first loan, there is a blank white space where you can place your mouse and it will switch to a hand. If you click on this, you’ll see the IRR on the entire deal you are looking at on that calculator.

Read More## Life Insurance Loans, Simple or Compound Interest?

The Whole Truth about Life Insurance Loans, Simple or Compound Interest? Investopedia explains Compound Interest as “The more frequently interest is added to the principal, the faster the principal grows and the higher the compound interest will be. The frequency at which the interest is compounded is established at the initial stages of securing the loan.” Investopedia explains Simple Interest by saying “Simple interest is called simple because it ignores the effects of compounding. The interest charge is always based on the original principal, so interest on interest is

Read More## Life Insurance Loans, In advance or Arrears?

Life Insurance Loans, In Advance or in Arrears? The Whole Truth An issue that is often incorrectly talked about as an advantage, is the idea that the insurance company charges a lower interest when interest is paid up front (in advance) versus at the end (in arrears). The whole truth is that there is a different factor (not a different interest rate) used to calculate the amount of up front interest that has to be paid. This factor can be calculated by reducing the Annual Interest Rate by the

Read More## Life Insurance Loans: Where does the interest go?

Life Insurance Loans: Where does the interest go? The Whole Truth: 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

Read More## Gold Confiscation Requirement

A Recreation of the 1933 Gold Confiscation Requirement Document Could something like this happen again?? It’s a bit shocking to thin that less than 100 years ago, the U.S. government saw confiscation of it’s citizen’s wealth as an option! Click on the red link directly below to download a full-size PDF: —>> Gold Confiscation Requirement

Read More## How to Input Inforce Ledger into Life Insurance Values Worksheet?

How do I input an inforce ledger into the Life Insurance Values worksheet? Open the Permanent Life Insurance or Life Insurance Values Tool (you’ll find “Tools” to the right of “Calculators” on your Truth Concepts dashboard.) Select radio dial “Inforce”. A box will appear asking for Existing Cash amount. Enter the Cashvalue on the policy’s current status report in this box. Put age and policy year in on top left and fill in description so you’ll know which illustration you copied. Next to it, an “As of:” box will appear, allowing you

Read More## The Truth Concepts Blog

(New to TC? Click Here!)

Welcome to the Truth Concepts Blog. We’re delighted you are here! You’ll find many examples and tips for using Truth Concepts in our posts, along with other helpful information you can use in your business. Have you heard about our Free Ten-Day Trial? Click here for details. Looking for something in particular? Check out the Categories in the Menu on the right. Click on a Category to view posts relating to that topic or Truth Concepts calculator. The “Truth Tips” category is for quick tips and updates on various calculators. Please note

Read More## Life Expectancy

The Life Expectancy tables in the Truth Concepts Calulators “Tools” section show the AVERAGE number of years a particular person will live. You can choose the age, male/female, standard/preferred, smoker/non-smoker and joint/single. Then remember that the number of years you see in the L.E. column is an average. For example, when a 35 year old male, preferred, non-smoker turns 65, there are 20.78 years of his life remaining on average. This means 50% of the people will live longer than 20.78 years and 50% of the people will live less

Read More## Accumulation

When filling in the tax box on the right for Mutual Funds, the following guidance and definitions will be helpful. Remember to get this tax box, the “MF?” box on the left must be checked. This means the existing money plus any new payments will be taxed like a mutual fund. To fill in the box, you’ll use 3 percentages that must equal 100%, for example, 20% + 30% + 50%. Unrealized Long Term Capital Gains means the percent of the funds’ growth that “fell off the fund managers desk”

Read More## Favorite Links

Included in this post are some of our favorite links and resources throughout the web. From stock market information, to stats, to life insurance, these sources are helpful for you and your clients alike.

Read More## Truth Tip, All Calculators

When in Financial Calculators, Double Click on the word of the second calculator you want and it will come up. For example, if you have the Rate Calculator up and now you want Future Value, just click on “Future” inside of the Rate Caclulator and you’ll get the Future Value Calculator.

Read More## Truth Tip, Additional Income Definition

Additional Income Definition: “Net after taxes but before qualified plan deduction”. For example, if someone is earning $150,000 they have $30,000 of mortgage interest deductions and $10,000 of charitable deductions, then Additional Income is $110,000 for the Qualified Plan Calculator and if they are putting $15,000 into their QP, then Additional Income is $95,000 for Accumulation and Distribution Calculator. Another way to put this is “gross taxable income minus deductions plus qualified plan contribution”. For example: $150,000 of gross income minus $30,000 of deductions plus $16,500 of qualified plan contribution

Read More## Truth Tip, Screen Space

Want to increase your productivity by 30%? Purchase a second monitor so you can use two screens with your computer. You’ll want to have a video card for a lap top or a USB to VGA adapter…then select properties and “extend windows” onto that second screen so you can run your illustration software on one screen and the Truth Concepts calculator on the other. Two screens make presentations more effective, save delays on jumping between applications which add up to alot of time when you repeat them multiple times per day. With

Read More## Tutorial Life Insurance Values

Hello and welcome to a tutorial on a new Truth Concepts tool called Life Insurance Values. Todd Langford will show how you can use the Life Insurance Values tool to cut down the time you spend copying and pasting information into the Truth Concepts calculators and drastically show the whole truth about life insurance. Go ahead Todd. The new tool is called Life Insurance Values and right here under the Tools menu at the bottom we see Life Insurance Values. And this is a place that we can load 6 permanent

Read More## How to show different payout timeframes on distribution

How do I show a 50 year period but a 20 year Pay Down so that Distribution 1’s income is still based on Interest Only and Distribution 2’s income could for example, use a death benefit to improve cash flow and spend Interest and Principal but only for 20 years. If I show a 50 year measurement of money the second person doesn’t run out at age 84, but I want to illustrate 50 years for both examples, but Distribution 2 running out in 20 yrs. Make the Illustration Period

Read More## Truth Tip, Life Insurance Values Tool

When importing the values from the tool to the Internal ROR calculator, take note that the IRR calculator AUTOMATICALLY adjusts the number of years for the illustration period. This is because the values in the IRR calculator are all beginning of year and the values on the illustration are all end of year. For example, you’ll see in your Life Insurance Values a table running 30 years, but it will show up as only 29 years under the IRR calculator.

Read More## Truth Tip, Borrowing Strategy Calculator

The descriptions of the 4 “loan/withdrawal” source drop downs are as follows: ACT CASH: removing money from the account via withdrawl ACT LOAN: borrowing against the account itself ALT LOAN: borrowing against another asset outside of the account MKT LOAN: borrowing from the market place, home equity, car dealership etc

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