My Review of the Anti-IUL Book "Lapsed"

09/20/23 • 10 min

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David reviews an anti-IUL book, LAPSED, written by financial advisor Elan Moas, who believes IULs are designed to fail rather than succeed.

According to David, the book is written with dramatic and highly-charged rhetoric around what will befall you if you make the mistake of purchasing an IUL.

So the big question is, “Are IULs too good to be true?”

For David, IULs do exactly what they're meant to do. Their true purpose is to give you stock market exposure up to a cap with a guarantee against market loss.

IULs are not meant to be a stock market alternative. They are a bond alternative with returns of between 5% and 7% net of fees over the life of the program.

Insurance companies don't make money on Cap Rates. Cap Rates are a function of two things. First is the cost of options, which is informed by the volatility of the stock market. And second, the carrier's options budget, which is a function of interest rates.

David debunks Elan's theory on how IUL providers are intentionally and aggressively working to confiscate your money.

David shares a chart showing return rates from real and highly-rated IUL carriers.

Only when you see that the author is out to sell you a whole life insurance policy will you understand the motivation behind his misinformed book.

David believes the author's goal is to scare people out of their perfectly adequate IULs into a whole life policy that he would be more than happy to facilitate.

If you like whole life insurance, great. If you like IULs, great. But please don't waste everybody's time with intentionally misleading scare tactics.

Mentioned in this episode:

David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code

DavidMcKnight.com

DavidMcKnightBooks.com

PowerOfZero.com (free 3-part video series)

@mcknightandco on Twitter

@davidcmcknight on Instagram

David McKnight on YouTube

Get David's Tax-free Tool Kit at taxfreetoolkit.com

David reviews an anti-IUL book, LAPSED, written by financial advisor Elan Moas, who believes IULs are designed to fail rather than succeed.

According to David, the book is written with dramatic and highly-charged rhetoric around what will befall you if you make the mistake of purchasing an IUL.

So the big question is, “Are IULs too good to be true?”

For David, IULs do exactly what they're meant to do. Their true purpose is to give you stock market exposure up to a cap with a guarantee against market loss.

IULs are not meant to be a stock market alternative. They are a bond alternative with returns of between 5% and 7% net of fees over the life of the program.

David debunks Elan's theory on how IUL providers are intentionally and aggressively working to confiscate your money.

David shares a chart showing return rates from real and highly-rated IUL carriers.

Only when you see that the author is out to sell you a whole life insurance policy will you understand the motivation behind his misinformed book.

David believes the author's goal is to scare people out of their perfectly adequate IULs into a whole life policy that he would be more than happy to facilitate.

If you like whole life insurance, great. If you like IULs, great. But please don't waste everybody's time with intentionally misleading scare tactics.

Mentioned in this episode:

David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code

DavidMcKnight.com

DavidMcKnightBooks.com

PowerOfZero.com (free 3-part video series)

@mcknightandco on Twitter

@davidcmcknight on Instagram

David McKnight on YouTube

Get David's Tax-free Tool Kit at taxfreetoolkit.com

Previous Episode

Dave Ramsey Says You Can Take an 8% Withdrawal Rate in Retirement! (Is He Right?)

Today’s episode revolves around whether Dave Ramsey is right – or wrong – in saying that people can take an 8% withdrawal rate in retirement.

A group of fiduciary advisors recently confronted Dave Ramsey on Twitter.

Just like David, they too thought that Dave Ramsey is living in a fantasy world because of the advice he shares with people.

David points out a big flaw in Dave Ramsey’s recommendation of staying 100% invested in stocks your entire lifetime: the approach doesn’t account for investment volatility.

Remember that just because you average 11.8% per year, it doesn’t mean that you’ll be getting precisely that result each and every year.

That’s because the order in which you experience returns in retirement is one of the biggest keys in determining whether your retirement assets will last through life expectancy.

David emphasizes the fact that most people who retire at age 65 need their money to last a full 30 years.

Ramsey’s “one-size-fits-all” approach is the reason why, David believes, he takes positions even if they aren’t supported by the data.

Mentioned in this episode:

David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code

DavidMcKnight.com

DavidMcKnightBooks.com

PowerOfZero.com (free 3-part video series)

@mcknightandco on Twitter

@davidcmcknight on Instagram

David McKnight on YouTube

Get David's Tax-free Tool Kit at taxfreetoolkit.com

Dave Ramsey

Morningstar

Ibbotson Associates

Debunking the Myth of the 8% Return by Wade Pfau

Next Episode

1-minute Summary of Every David McKnight Book on Retirement

David gives a 1-minute summary of all his books on retirement.

The Power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement.

The book outlines a step-by-step plan for getting to the 0% tax bracket in retirement, because if tax rates double, as some experts predict, two times zero is still zero.

Look Before You LIRP: Why All Life Insurance Retirement Plans Are Not Created Equal, and How to Find the Right One for You.

David explains that while various LIRPs may help get you to the 0% tax bracket, not all will do so with the same efficiency or effectiveness. In fact, finding the right LIRP for your tax-free retirement plan can be just like finding the ideal spouse. Just as you likely had a list of qualities you were looking for in a life-long partner, you should have certain attributes and provisions in mind when looking for the ideal LIRP.

The Volatility Shield: How to Vanquish the 4% Rule & Maximize Your Retirement Income.

In this book, David breaks down financial truths that challenge conventional wisdom and reveal the gaping hole in people’s retirement picture. He also reveals how you can open a volatility shield account that allows you to pay for your retirement living expenses in the year following a down market.

Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement.

David lays out a comprehensive, step-by-step roadmap for a secure retirement and how to shield yourself from longevity risk as well as the unintended consequences of higher taxes.

The Infinity Code.

This book speaks of the evils of the modern monetary theory, which says that we can print an unlimited amount of money to pay for our nation’s burgeoning debt load.

David shares insights from his upcoming book, Guru.

Americans love charismatic gurus who dish out one-size-fits-all financial advice that is easy to digest and implement.
However, the dumbed-down financial advice offered by Dave Ramsey and other gurus is good for bad investors but bad for good investors. David believes that while these financial gurus sometimes dispense good advice, it’s nearly always at the expense of the best advice.

Mentioned in this episode:

David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code

DavidMcKnight.com

DavidMcKnightBooks.com

PowerOfZero.com (free 3-part video series)

@mcknightandco on Twitter

@davidcmcknight on Instagram

David McKnight on YouTube

Get David's Tax-free Tool Kit at taxfreetoolkit.com

Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David M. Walker