So based on the title of the video I'm sure you have somewhat of an idea what this video is about but let me tell you this I'm going to put timestamps in the description box below that way it'll be easier to navigate through this video because I have no clue how long this video is going to take me to make so let me give you a little backstory so you have an idea of where this video is coming from so I made another video about iuls just explaining what they are how they work and things like that and someone made a comment about these are the eight reasons why iuls are bad and I reply back letting them know they were misinformed and I even offered to jump on a one1 zoom call so I can walk them through and show them exactly why they are misinformed so they chose to not take me up on my offer for whatever reason and proceeded to go back and forth with me in the comment section and that was leading nowhere because it seemed like they had their mind made up as far as like what they believe the product is and how the product works so based on some of the replies I received back I got an idea that they didn't really understand how IO actually works so I kind of left it alone and figured like hey I would just make a video replying to to all the different areas so then they can watch it and hopefully be educated one thing I do know is they work for a company named Prim America so if you're familiar with prime America or you know about prime America or maybe had experience with prime America you can put it in the comment section so I can learn more about the company I know they're an insurance company but I don't know necessarily how they do business so I would like to learn from you guys what you guys know about prime America and that way I can inform myself and learn more about the company what they stand for and hopefully the information that they were putting in the comment section isn't something they learned from the company Prim America but who knows like I said you guys probably know more than I do so I'll be looking forward to see your comments so you can let me know what were your experiences with the company Primerica so let's go ahead and jump in so we can see if we can clear up some of these reasons that make I such a bad product and by the way I'm not here to push I on anybody if you've watched my channel you know I'm very big on comparing things pros and cons I believe there's no such thing as a perfect investment but if somebody comments something and I know for a fact is false I'm G to clear it up so in this video it is going to be more of a defense of I but same time I always say you want to get a product or put your money in places that's going to benefit you and be in alignment with your actual financial goals just wanted to throw that in there before we get started so the first concern was the first five years no growth so let's tackle that so right here what you're looking at is an actual illustration and I'm not here to push a company so I'll be blocking out the company and of course my personal information but it gives you an idea of what the actual product looks like so this person here um this is a female age 30 we're starting off with the death benefit of 159,160 so that is the death benefit is paid monthly so the monthly amount going into the policy is going to be $500 a month okay so that's where if you look at this the blue section so you have the year the policy the age of the client that year premium outlay that is that $500 a month time 12 so it's going to show you an annual number going in that's what that $6,000 represents now the accumulated value that is your actual cash value that's the that's the column that's going to grow and earn compound interest so you can see you put in 6,000 in this situation $4 4,983 went to the cash value so the difference between the two I always say was removed in the form of a cost of the policy because there is a $159,000 death benefit you have to pay for and the policy does have admin charges and things like that so just know that difference between those two numbers little over $1,000 so if you divide that by 12 you looking at maybe like $84 $85 a month in cost for that policy so everything above the cost is what's going inside of this accumulated value so year one 6,000 goes in 4,900 goes to accumulated value then you have the cash surrender value that's just kind of showing you if you canel the policy and walked away or if you want to access policy loans or things like that it shows you what's available so you can see 100% is not available right off the gate so you're losing maybe $2 $300 off the Top If you cancel the policy right away or if you want to take a policy loan so you got your cash value and just call this accessible value then you have your death benefit so hypothetical interest rate so I'm running this hypothetical rate at 5% so I chose 5% because there's not too many people that don't think that the S&P 500 can do at least 5% so your your growth is determined based on following a market index so I'm just going to use the S&P 500 so the S&P 500 is pretty much the top 500 companies in the US collectively what they do together determines the performance of the S&P 500 so this account will mirror the S&P 500 so there's a cap in there there a floor cap means there's the most you can get annually floor is the worst case scenario so for instance let's say the cap is 10% right so caps can be you know caps could be 10 it could be 12 it could be 15 but I like to use even number let's say the cap is 10% that means if the market does eight you're expecting an 8% credit towards your cash value if the market does 12 then that means you surpass the cap of 10 that means all you can get is 10 so everything above 10 you don't get only 10% will be credited towards your cash value so with that being said it's pretty reasonable to say that this can perform at at least 5% right personally I think it do better than 5% but I like to show conservative numbers compared to what the sap can do so at 5% so let's take a look at the first 5 years to see if our accumulated values either either growing or staying exactly the same in the first 5 years so I'm going to pull up the calculator so we can look at this together so we have 4983 so that's roughly about what's going into the cumulated value every year so if we add another 49 83 that gives us 9,966 however the cumulated value is um 10,221 right so there's some growth right because what you put in it would only been 9,966 but there's more than that so there's some growth let me add another 4983 and we're at 14949 plus 4983 plus 4983 so that's 5 years so 24915 and we go 1 2 3 45 at five year five 27544 so it looks like there was some growth so let's subtract 27 544 so there's some growth there's $2,629 worth of growth in the first five years and again this is assuming the market only did 5% right so this is a hypothetical number because the market moves every sing year the market can be more it could be less so this can be 8% it could be 9% it could be 3% so it has to be a hypothetical number because you're not getting a fixed rate of return every single year you're getting a rate of return that's going to follow whatever the market does every single year so hope that makes sense so question number one does it gain any cash value or does it gain any interest or any growth in the first 5 years I would say the answer is yes mathematic L it says yes and that's even at a 5% rate so now let's move forward to comment number two so this one says you can only get the death benefit or the cash value to leave for your family the company keeps one or the other who pays for two things and only gets one so it's saying you you only either get the cash value or you're going to get the death benefit not both okay so let's look at the illustration we're looking at right now so we started off with an initial face amount of $159,800 initial face amount and it's adding your accumulated value and that's what's going to pay out in the form of a death benefit so let's check that out so if we take let's pull up our calculator again so we take 15987 and then we add let's do this year right here so we're adding this uh policy year nine policy year nine so here here we go let's make it even policy year 10 right above the green bar so we're adding 62,000 $620 that means that total this cash value plus the death benefit is 2 22487 ironically what's the death benefit in year 10 222,50 so when you pass away the insurance company says okay how much is the death benefit $159,800 plus how much money is in the cash value 62,6 120 combine them both and that becomes your death benefit that pays out so you're not getting one or the other you actually get both right you get your cash value Value Plus the death benefit which you can clearly see here and it continues to go higher and higher and higher based on the value of your cash value growing over every single year so I think that clearly answers comment number two where we can say that's debunked you do not only get one or the other you clearly get both and if you're wondering how you do that this is called an increasing death benefit that's the actual title for it increas in death benefit means it takes your death benefit and it increases it by your cash value so now let's move on to the next comment which was the so-called strongest benefits immediately go away if you are late one time so I'm not sure what he meant by the strongest benefits I would say the strongest benefit when it comes to a life insurance policy is the death benefit I would say the second strongest benefit is the cash value so so let's just look at both let's look at the death benefit what happens to the death benefit if you're late um if you're late one time and what happens to the cash value if you're late one time so in this scenario let's say you're late we're going to be late um i r example we're going to be late five years so we're going to stop paying in policy for whatever reason we don't make a payment into the policy for 5 years I would say that's pretty late would you say it's pretty late because not only are you late on one payment you're late on every single month for 5 years straight what happens to your death benefit and what happens to your cash value okay so let's look at the death benefit first so death benefit over here it was $240,000 when we made our last payment in year 12 we didn't pay anything in year 13 but what happens our death benefit increased what about the year after that it increased again and and increased again and increased again and increased again so it increased every single year even though we did not make a payment that's kind of odd right how did it do that because here's our cash value so our cash value right because this is growing at 5% at 5% it's pumping out so much compound interest that it it not only makes the premium payment for you but still has enough money left over to continue to grow and the growth of this cash value is what's driving up the actual death benefit because remember it's a combination of the initial death benefit plus the cash value together is what pays out so you can see that the policy pays for itself because you're clearly not paying for it it pays for itself for five years straight and still has enough compounding to continue to grow that's remarkable and again this is at 5% so the comment said if you're late one time we can can all agree it doesn't matter if you're knowledgeable in insurance or you know anything Common Sense can tell you that 5 years is a lot longer five years of not paying is a lot longer than one Mis payment and even though you didn't pay for five years your death benefit was driven up and your cash value still was driven up and that's at a 5% rate of return if the market was doing better than 5% then we already know it's going to do better than 5% so I would say we pretty much covered that so we know if you don't make a payment if you're late you're okay your cash value can take care of it on your behalf but you still have that compound interest that's working for you that drives one the death benefit up higher and your cash value up higher at the same time so whichever one he was referring to as far as like the strongest benefit we covered the two strongest benefits which were the death benefit and the cash value and both got better even though we didn't pay into the policy so now we're on comment number four and comment number four says the fees eat up all the cash by the end so it can not grow as promised cap rates suffocate the growth as well so the fees eat up all the cash by the end so it cannot grow as promised so we're looking at this policy and we clearly put in $6,000 and there's only 4,900 that goes towards your actual cash value so we know fees are included in this policy so it's not like 6,000 you pay into it and your accumulated value says 6,000 and we got to calc calculate the fees later the fees are already calculated into this illustration so we're going to account for the fees I'm going to show you what it looks like in later years um and cap rates suffocate the growth as well if you're in if you're in a product that has a 10% cap and it's following for instance okay let's say the product has a 10% cap just to make it easy product has a 10% cap it's following the mark Market which is no cap if the market does 12 you're limited to 10 I think that's pretty straightforward that's pretty obvious the reason people are okay with that is because they like the fact that if the market went -20 they're locked in and not taking any negative credits because of the poor performance of the market so you're not going to lose your your your account value doesn't go go below zero if the market performs below zero so it's you're like in that middle zone so if this is The Zone if the market performs up here you're only going to get this level but if the market performs down here you're not going below that level so all your previous gains are locked in so I think it's pretty straightforward on the the second part where it says cap rate suffocate the growth as well yeah you're limited to the Caps that's pretty obvious but the other part was feeds will eat up all the cash value by the end it can't perform so again we're using 5% we're going assume the market only does 5% for you know know the rest of life of the fund so I'm going to fast forward through this policy I'm gonna okay so let's start here okay so here we have age 80 age 80 I stopped the payments right you can stop the payments sooner you could we you clearly saw you could stop the payments sooner but you can stop them sooner you could continue to allow them to go but I just stopped him at age 80 okay so age 80 we stopped the payments there's $1.1 million in cash value if the market just did 5% but remember not only are we no longer putting money in but fees are being deducted from the policy internally because the cash value is paying for the fees on your behalf let's see what happens if we go further out so if we go further out you can see the policy makes it to the the final year which is age 121 so you can see this is last year the policy age 120 and at that point $7.1 million is in there and it's still paying for itself so remember the fees are already baked in here right so and again this is this is assuming the market only does 5% so I think that kind of clears up that response to uh number four regarding the fees eating up the policy because I it looks pretty good to me right so let's move on to the next one okay so number five says it has never beat the market in 100 years ever so let's get this cleared up so we know by now that the S&P 500 has no caps it's the stock market it could go as high as it wants to go but the I has caps so I has a cap so that means if the sap does 18 you're not going to get the 18 in your I but at the same time if the sap does negative 18 you're not going to take that 18% loss so what I want to do is show you side by side what it looks like and you tell me if the S&P beats an i every single year because think about it let's say we both had let's say we both had $1,000 and I had $1,000 inside my cash value I and you have $1,000 in your brokerage account following the S&P 500 let's say the market went Nega 24% right if that happens that means your account balance drops by 24% if that happens to me that means my account balance stays at at no loss so it stays exactly at $1,000 so I have $1,000 you have 24% less than $11,000 so if you take - 24% compared to 0% which one would you say performed better that year pretty straightforward so yes the I can outperform the S&P 500 if the S&P 500 has a negative year now the S&P 500 operates on what's called a point too so a point too means December 31st does not apply to all accounts because if you open your account in April the only thing that matters to you is April of the following year because that'll be your 12-month anniversary so every month there's a new anniversary when it comes to these policies because they're pointto point so I want you to look at a point-to-point schedule compared to the S&P 500 so you can see if the S&P 500 is going to dominate and beat an i every single year for 100 years okay so right here we're looking at um we're looking at October 2006 so here you can see the S&P 500 that month for that period did 15% 15.38% so the cap happened to be 12% so you got a 12% cap so who performed better the S&P 500 performed better because I was hit with the cap so you can see how it works is it if it beats the cap you only get the cap here the market did 11 .61 so the SP was able to match that it did 6.91 it was able to match that so you can see right here the S&P did 25.35 SP can't match that it only could do 12 so 12 is the cap but this is now we're into 2007 but let's scroll up and take a look at what happens here some of you guys may remember what happened in 2008 so here the sap did - 1% so that means you got 0% in your I so you left you're left exact where you left off not a big difference but then guess what the sap got worse and worse and worse so now sap did -2 you got zero 35 you got zero - 4.62 you got zero which account perform better the- 40% or the 0% I think anyone can look at this and tell you 0% is better than 40% right so you can see all the way in through 2009 same thing then okay October 2008 I mean October 2009 sap came around and finally did um 9.42% and guess what you just unpaused and now you went up 9.4 uh 42% then did 27 huge rebounds and now you're hitting the cap you're hitting the cap you're hitting the cap so you can't compete with these um and then you fast forward again you can see you know you're getting some good double- digit rates of return Then 2011 there's a negative -2% that you know that time period you at zero um then from there you you know it did 16 you got the 13 cap see the cap change or whatever Cap's change um 13.35 you got 13 so you can see the S&P 500 can actually lose to an i if the S&P 500 performs at a negative number so but on the upside yes upside the cap cannot compete with the upside but to say that you will never beat the S&P 500 ever in 100 years is totally false and I'm showing you exactly how it's totally false because you can ask a lot of people that experienced a lot of losses in 2008 do they wish they had guarantees on their money at that at that point in time and I can tell you the majority of them will probably say yes they wish they had guarantees to protect from those 40% losses so we got that cleared up now let's move on to number six there are 22 million millionaires in the US and 1,700 new ones created every day I have not created one of them you have a better chance of winning the lottery than getting wealthy through iuls okay so there are 22 million Millionaires and not one was created by I okay so I'm assuming you know exactly how all these millionaires were created there's 22 million Millionaires and you know exactly how all of them were created is what you're saying everybody knows that's bogus nobody knows exactly how everybody built their wealth right um someone could have done it through real estate they could did it through business but to say no one became a millionaire using I I challenge that strongly out of 22 million millionaires nobody utilizes IL at all not one person utilizing I but the example we showed you right let me go back to that example so here clearly we can see if somebody just was putting in $500 a month at5 % assumed rate they'd become a millionaire at age 78 right and if the market did better than that it'd be a lot sooner but let's just stick with the 5% so I think you can create millionaires with an i right this is just $500 a month right they're they're just let's say you just saved it for retirement there's a million dollars in their account that means they are actually a millionaire so there's no way for me to prove that none of not one of the 20 2 million millionaires using I but at the same time there's no way for you to prove that they didn't but I'm showing you how you can become a millionaire with an i at $500 a month assuming a 5% rate of return and technically you can also become a millionaire through receiving a death benefit so if there's an IL that has a death benefit and you receive the death benefit you could be on the receiving end of a million dollars and become a millionaire from you know a parent or somebody passing away so that's another I didn't even think about how you can actually become a millionaire through I but just from accumulation purposes you can see that it is possible through accumulating just from growth of your account and just out of curiosity I want to know what are the chances of actually winning the lottery and it says clearly it's one in 992 million so you're telling me that I have a better chance of hitting the lottery than I do contributing $500 a month and assuming that the Market's going to do a 5% % rate of return or better that just doesn't make sense okay so let's move on to the next one we're at number 7even now so all of their illustrations ignore guaranteed examples the only thing they have to pay you is what is in the guaranteed column so let's take a look at a guaranteed illustration okay so here we have three different columns you have the guaranteed value that's at 0% that's a assuming a 0% rate of return you have this one's non- guaranteed at 3 and A4 and this one's the 5% that we've been cover in this entire video so those are the three so you got this section this section and this section so we're only going to focus on this section right here which is the guaranteed value which is 0% so here we're investing into the accumulated value and you know that's your cash value surrender value same thing there's your death benefit increasing here we're looking at another group this is this is age 40 through age 59 same thing your accumulated value is still there's still money there I mean nothing compared to you know what's at a 5% rate of return but there's still money there and this is assuming no interest okay okay and here we go here this is you know to age 79 so age 79 there's 152,000 almost $153,000 in cash value um death benefit 315,000 and here we have if it was the non- guaranteed a million bucks right so guaranteed column let me explain the guaranteed column the guaranteed column is 0% why is it 0% because there's no guarantees in the stock market okay now for you to get this guaranteed column for this guaranteed column to actually happen for you that means the stock market would have in this example what we're looking at the stock market would have to perform negatively every single year for 50 years straight think about that think about the odds of that happening the stock market performed negative every year for 50 years straight that's the only way you'll get a negative interest rate CR it towards your account right and even so we looked at it and you know the policy is still running is it realistic to think that you'll get a negative interest rate credit or negative numbers based on the market for 50 years straight that's beyond unrealistic right that I don't I don't think if that did happen we have bigger things to worry about then we won't even care about money if the market was we're talking Amazon Google Walmart Costco all these all these compan is going belly up for 50 years straight that's what that's the how extreme it has to be for it to be a 0% rate of return for 50 years so the column is right there right but if you talk to anyone think I'm asking you guys do you think it's realistic for the market to be negative for 50 years straight right and if it did would you even care about this account would you care you wouldn't care we probably wouldn't be using money right we trying to figure out what going to eat tomorrow type of thing right but that's neither here nor there but that's the guaranteed column so the guaranteed column means the market was negative so you got the zero so they're only guaranteeing you what the market can do so if someone says look at the guaranteed column then that means they have no faith in the stock market but I'm sure that same person that says look at the guaranteed column is telling you hey you need to invest your money directly in the stock market because if you think the stock Market is going to boom right then why would you think the I that's following the stock market is going to perform at zero that makes no sense yeah I think the Market's going to do a 12% average over the next 50 years but the I that's following the stock market is going to perform at 0% over the next 50 years such a contradiction it makes absolutely no sense but I'm I'm here to cover it I'm here I'm here to cover it so I want you guys to see it so that's pretty much answer to that question right so that's your guaranteed column at 0% and it's still performing it's still in force and we're talking 50 years out okay and then the last one was over 30 years the average basic Roth beats an i in wealth creation 33 times to one okay so first off a I'm assuming we're talking about a Roth IRA here right so a Roth IRA is a tax shelter it's a retirement account so there's no investment a Roth IRA is not an investment a Roth IRA must hold an invest investment it tells you how that investment is going to be taxed okay so if you're in the financial industry you should know that right so because the Roth IRA can hold mutual funds it can hold stocks it can hold Commodities it can hold real estate it can hold a cash account because think about it let's say you had a Roth IRA and you're invested in stable funds at 0% there's no that's that's not going to be the that's not going to be the I at 0% is not going to be an i let's say your Ro Ira is invested in bonds probably not going to be I so it's all about what you're investing in but if you're investing in S&P 500 I get it then you're side by side comparing but again the I was not meant to try to beat the market the I was meant to give you upside potential with downside protection you want your Market you want your money to grow but if the market were to go down you want that protection against loss that's the point of the i in addition to the tax benefits that come along with it as well and the Early Access you don't have to wait till you're 59 and2 years old like you would with a Roth right so that's why people put money inside iuls so that makes absolutely no sense because it makes me seem like you don't really understand what a Roth IRA is because a Roth is a tax shelter it's not an investment Investments are inside of a Roth and it could be any type of investment inside of Roth it could be real estate inside of Roth so that didn't make sense but you know 30 33 times to one that's pretty that's pretty high so pretty much what you're saying is let's take a look at this so here we are at year 30 so year 30 $500 a month all fees deducted and we're at $347,000 in cash value assuming a 5% rate of return so I want to see what that compares because it should be 33 times that so you should have 33 times that so I'm going to run I'm going to run uh a market performance at 10% so I'm going to double the interest I'm going to double the interest I'm going to assume there's no fees at all so I'm going to put the whole 6,000 in there we're going to pretend like there's no fees and we're going to double the interest and I'm going to see if we can get 33 times the amount of money so I'm going to share I'm G to record my screen over here on my on my iPad while I do this calculation because I need a I need a um compound interest calculator okay so here we go compound interest calculator so principal amount we're going to start off with $0 multhy deposit we're going to put the entire $500 in period it's going to be 360 months and we're going to do a 10% rate of return and again we're going to assume no fees no fees at all we're going to double the interest rate and we're going to assume no fees and it's going to compound annually let's see what we end up with we end up with a maturity value of $1 million 39,6 46 and that is not 33 times $347,000 it's about three times three times that so let's see let's see um let's do that 347 682 time 3 so it's a little less than three times so you said 33 times it's less than three times so let's just assume let's just round up and let's say it's three times and that's that's assuming the market did 10% and there's no fees being deducted from this account at all and we're assume no taxes at all either but let's say let's say if we did a 5% if we did five and five so 5% calculate that it' be $449,000 so that's pretty close right so it's 49,000 but when you factor in at the I you're able to access that money taxfree I don't know I think you'd be winning in I and that's even with paying for a death benefit and all whatever fees being deducted that's pretty surprising to me that is that close right that is surprising but you know let's say if the market did 15% 15% 2.8 million still not 33 times the rate so we can say that that was completely false that a Roth is going to give you 33 times the interest that you'll get in an iul I thought it was going to be more than than three times but it's about three times and again that's assuming no fees and realistically we know there's there's no account that has no fees and we're assuming that it's going to do a 10% rate of return compared to the I only doing 5% rate of return so if we did an i if we did a 10% rate of return on the S&P I would say the I can do seven and some change so if we did if we did seven and some change easily you probably be closer to $500,000 so it' be even smaller it' be like two two times is some change two and a half times the amount so I hope that makes sense so I think we covered all of the areas we did so we covered all eight so I respond to all late and this video is probably way longer than I thought it was going to be but again I put the timestamps in there so you can navigate through this um thank you guys if you made it to the end put a thumbs up if you got some value put anything in the comment section because it helps YouTube YouTube doesn't push videos out unless there's comments and likes and things like that and I think information needs to get out to other people because you know you guys will let me know how big of a company Prim America is and hopefully they're teaching the right message and hopefully this was just you know one apple in a bunch of great shiny apples that PR America has I don't know you guys will let me know in the comment section but until then take care and I'll see you guys in the next video