Caution When Selling EIUL

Caution When Selling EIUL

If you talk with ten IMOs that push EIUL sales, you’d come away with the impression that they should work for just about any client in multiple situations.

We are here to tell you that couldn’t be further from the truth. Our training is about putting the client first and making recommendations that are in the client’s best interest.

When selling an EIUL policy doesn’t make sense.

Part of our training will be to show advisors when selling an EIUL policy doesn’t make sense or is a risky purchase (odd to hear since most IMOs say there is no risk to EIULs).

                1) Section 79 Plans

                These plans are one of our least favorite in the industry. They are now sold with EIUL policies. The bottom line is that clients would be better off using a “good” EIUL with after-tax money vs. taking a partial deduction to fund a Section 79 plan.  We cover this at training; but if you can’t wait, simply go to to learn more.

                2) IRA Rescue

                A handful of IMOs are pushing IRA rescue using EIUL. They will tell clients anywhere from ages 55-70 that they would be better off taking money from an IRA, paying taxes (and potential penalties), and funding an EIUL. They run the numbers with what we consider bogus or non-real world numbers and show the client how much more after-tax income they could receive with EIUL vs. leaving the money in the IRA and taking taxable distributions when needed.

                This is an abusive life insurance sale in our opinion, and we break down the math at our in-person training. If you are pitched this plan and need help before coming to our training, e-mail for help.

                3) People 55-60 and older

                We see on a weekly basis EIUL illustrations other IMOs are giving out for older clients (55 and older) that look wonderful as tax-free retirement tools. If that’s the case, what’s the problem? The illustration has to be so manipulated in order to make the numbers work that we consider it a bogus illustration. If clients had any idea how bogus these illustrations are, they’d report the insurance agent to the department of insurance.

                Can EIUL work as a decent tax-free retirement tool for someone over 55? It can, but the stars have to align. Because of this, we only recommend it for affluent clients who have several retirement buckets to pull from. This allows the EIUL to grow and be the last bucket taken from. Unfortunately, we see EIUL sales to those 55 and older where “all” of their retirement money goes into the policy. This is very risky and a sale we do not believe is suitable.

                4) Bogus illustration-based sales

                We already alluded to bogus illustrations a few times above. We see on a weekly basis many illustrations for clients who should be good candidates to use EIUL for wealth building, but they are being sold the policy based on bogus illustrations.     

                What is a bogus illustration? One that uses an unrealistic crediting rate. One that uses a true variable loan where the interest rate used is today’s historically low rate (one that is projected out 30, 40, even 50+ years with a policy that doesn’t have a fixed-lending rate).

                As you will learn at our training, you don’t have to give out a bogus illustration to sell EIUL. You can give out a real-world/realistic illustration and make the sale just as easy.  Unfortunately, most IMOs only care about maximum sales and not what’s in the client’s best interest. That’s one thing that sets us apart. We are laser focused on educating advisors so they give full-disclosure advice to clients, and we support them in a manner that is also client focused.