- 11,075
Dude. That seems like the most shady MLM operation Ive ever seen. How much you want to bet they are pitching BYOB with IUL to "cut mortgage payments from 30 years to 7 years"
I am in a bit of a pickle.....can anyone offer me some help/advice to get back on the horse?
- Thread starter SShockley21
- Start date
Dude. That seems like the most shady MLM operation Ive ever seen. How much you want to bet they are pitching BYOB with IUL to "cut mortgage payments from 30 years to 7 years"
- 11,075
Let me guess....
2nd mortgage...
Borrowed funds into IUL...
IUL pays for everything with its amazing growth and interest arbitrage.
If thats accurate, what you are doing is wrong on so many levels, legally, morally, carrier guidelines, etc. etc. etc. You could lose your carrier appointment, have your license suspended/revoked, and even face legal issues on top of that.
Hopefully its not that.
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Is Equis MLM?
- 6,048
This is one of those, "you don't know what you don't know" things I have a feeling.
A few simple questions at the right place and right time. Read the forum, reach out to several people, and don't bite on every worm that wiggles.
A few simple questions at the right place and right time. Read the forum, reach out to several people, and don't bite on every worm that wiggles.
Andy Pannone
New Member
I'm relatively new- have had my L&H license since 2018. I gotta admit, I've learned the most, and have had most of my questions answered simply by browsing and searching the forum. Posts by Daytimer, DHK, DonP, Frank Stastny, and others have been really helpful. If you're a brand new agent, or relatively new agent, like myself, I would suggest just taking some time each day and read over the forum. A lot of valuable info on here - you just have to find it.
- Thread starter
- #26
SShockley21
New Member
- 18
Just so you know this has nothing to do with 2nd mortgages, borrowed funds, HELOCs or debt consolidation.
- 11,075
Then how do they cut 30 years of mortgage payments down to 7 years? Using Insurance products.....
You murder the insured in the 7th year and pay off the balance of the mortgage with the death benefit. Duh!
- 6,587
I say it again down below, but I do this - it is one of my main strategies. It works best with clients with many debts, and not nearly as well if all they have is a mortgage (for those people, the product is still great, but the sales concept will be infinite banking & tax-free retirement, or perhaps real estate investing) And it typically shakes out to a nine to eleven year average to get everything paid off. I have seen a few in the 7 year time frame but that requires a certain alignment of the stars, e.g. they have two $600/month car notes and both have less than 24 months to maturity. Read on to understand why that would matter ...
So the steps are:
1) Find the money to fund a ar whole life policy, funded to the max: This is usually by diverting money from 401(k), IRA, cutting out the country club and golfing at the public muni, etc For example, clientis saving 6% into 401(k) with a 3% employer match. Let's continue funding the 401(k) to the 3% match and use the other 3% to help fund the policy. Client now has a much larger par whole life than they could have "afforded" and you have not asked them to "spend" anymore out of pocket than they were already doing.
2) As premiums are paid, use accumulated cash values to pay off debts
3) As debts are retired, divert those payments into the policy to pay off policy loans
4) When cash value = mortgage balance, policy loan pays off mortgage.
Now free cash flow goes into paying policy loans and continuing premiums.
This does work, it is a more efficient use of cash to accomplish what many would recognize as the Dave Ramsey "debt snowball." It is a way to become debt free far more quickly than doing it the Dave Ramsey way while still being able to take your family out to Outback for dinner once in a while and maybe even take a vacation without having to run it through on your Visa card.
The irony is it does not work as well if the only debt the client has is the mortgage. Works incredibly well if they have some revolving charge, maybe a car note or two, some furniture on a note, etc. A $500 premium can rapidly become $2500/month (or more) in cash flow diverted into the policy. Imagine someone can pay $500/month in premium, and their current debt service (mortgage, cars, furniture, credit cards) is $3500/month. Now, some of you well-heeled insurance agents may scoff, but I have found that to be very common. Americans are LOADED down with debt.
Now, use the rapidly accumulating cash values to pay off the smallest debt first. Once that debt is paid off (let's say the monthly payment was $125) now we add that $125 to the $50 premium payment. new cash values accumullate from the new premium payments and the policy loan is repaid out of the $125 that is now freed up from the credit card debt. Son enough the cash value will be built/replenished sufficiently to pay off the car note, freeing up another $489/month. Now the client is making monthly payments into the policy of $1114/month ($500 premium + $125 free cash flow from CC elimination and $489 from car note elimination). Continue the process until the client is debt free.
In my experience, seven years is unlikely. It more typically will take 9 to 11 years. But it still saves the client a yacht-full of interest payments, builds up a supplemental retirment savings faster than they would ever have thought possible, and they got all the insurance protection (most) already wanted for their family but thought they couldn't afford.
And all with the guarantees of a par whole life rather than the ambiguities and uncertainties of an IUL. And if done ethically, you do it using the guaranteed values not the non guaranteed.
Using the guaranteed values to illustrate the plan does two things
1) it guarantees the client of a certain result at a certain time if the client follows the plan, thus protecting you, the agent, should the mutual company decide to do an ON on you and your book of business, and
2) Makes you look like a hero when the cash value is sufficient in 8 months to pay off the first debt when the client thought it would take 12 months because the current
You can play with the numbers by exporting the illustrated values into excel, and it works best if you are able to run it monthly rather than annually for max efficiency.
Sounds too good to be true, but it works incredibly well when designed properly and the client buys in (COMMITS) to the program. And the irony is that the more debt your client has the better this actually works (assuming you can find the money needed for the premium to get the whole thing started. People do not like another bill. But if you can show them how they can find money they are already spending elsewhere and divert that nto a policy without diminishing their current lifestyle (public course are great) then it becomes a real win for the client.
I have not read this whole thread and I am responding only because @scagnt83 is here and he's a good dude whose posts have helped me a ton. I make no judgement on whatever it is the OP is claiming to be doing.
Hey I am just now getting started with DFL as you just described above. Would it be okay if I reached out to you to ask you a couple quick questions on this?
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