Real Clients and Real Results Using EIULs

Real Clients and Real Results Using EIULs

3 min read
David Shafer Read More

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Hitch Hiking on Michael Zuber’s last post, I thought I would share an example of three clients of mine.  I always try to categorize those that contact me and end up purchasing an EIUL with those who decide not to. Generally, the people that do fall into the following categories:

  • Successful careers
  • Disappointed in the typical financial planner advice
  • Educated
  • Skeptical
  • Good with numbers
  • Has shown good tolerance for risk in other endeavors [some have moved from other countries, others have risky professions, others are independent consultants and small business owners]

Example #1: The Computer Engineers

Both husband and wife are computer engineers in their early 40s.  They were born in India and have worked in the California computer industry for years.  They have 3 school age children.  They both had invested in mutual funds inside their companies 401K, but were disappointed in the performance [this was 2008] and had pulled all their funds out of the equity mutual funds and into a money market fund.  We spent much time going over the numbers as engineers like to do.  They bought a policy for both the wife and the husband and plan on buying one for each child in the future.  Since they purchased their policies the interest credit has been the following:
2009   16%
2010   13.39%
2011   0%
2012  13.41%

Needless to say, they have been very pleased.  Since then, on my advice, they have invested in several real estate properties to add a third leg to their retirement [401K, EIUL, RE].  They are locked into their 401K, but have stopped adding to it beyond the match that the husband gets.

Example #2: The Doctor

He is a 34 year old medical doctor working in NYC, living in NJ, who was engaged to be married.  He had just finished his internship and was getting his first big jump in pay.  He had not started saving for retirement when I spoke to him.  He had a reserve of six months expenses.  He wanted to totally fund his EIUL in 15 years so he was aggressive in the premium amount.  He felt since he was use to living on so much less than he was starting to make he could continue his current lifestyle at least until kids arrive and aggressively save for the future.   He bought his policy in 2010 and has had the following interest returns:
2010- 2011  9.5%
2011-2012   6%
2012-2013 [not finished this leg yet but it sits at 8% at this point]

He is busy at work and has added in a 401K meeting the match.  He has no plans at this point to expand beyond what he is doing, despite my prodding.  Is currently married with no children.

Example #3: The Army Officer

He is 46 year old army officer on his last tour of duty before retirement.  He is married and has two kids.  He had several tours of duties in the Middle East.  He will get the full military retirement with over 25 years of service upon retirement.  The EIUL is to supplement that.  His planned premium payments goes to age 60. He just went past his first year policy anniversary where he received a 13% interest credit.  Despite being overseas, he keeps in close contact with me and asks advice as to his policy.  He last talked to me a couple of weeks ago and seemed very happy with the policy.

It’s interesting as I look over my client list how many engineers I have as clients.  Also quite a few attorneys, doctors and independent consultants.  I’m not sure what that means, but I know that every one of my clients were given all the information and data to come to their own independent buying decision.

I sent the following out to a potential client and thought my readers might find it interesting:
The Minnesota Life  EIUL is 10 years old.  Here are the actual results for the interest credit over the life of the product:

2003  17%  [cap rate was 17%]
2004  10.47%
2005   5.63%
2006   12.16%
2007    2.43%
2008   0%
2009  16%  [cap was 16%]
2010   13.39%
2011  0%
2012 13.41%

$1000 in cash value at the inception of this product would be worth $2,340 today.

Once again these are real life results since the inception of the product over the last decade.

Photo: Unhindered by Talent