LIFT Strategy FAQ

If your policy's crediting rate consistently falls below the loan interest rate, the leverage works against you. For example, earning 4% while paying 5% on loans means losing 1% annually on the leveraged portion, eroding cash value over time. Our mitigation includes: • Conservative projections (we don't illustrate maximum rates) • 0% floor protection prevents negative years • Quarterly monitoring catches underperformance early • De-leveraging protocols before problems compound Without leverage, you're protected from this risk—but you're also capping your upside at 6-8%.

This is the core risk of any leverage strategy. Short-term inversions (1-2 years) are manageable. Prolonged inversions (5+ years) require strategy adjustments. Historical average crediting: 6-8%. Typical loan rates: 5-6%. Normal spread: +1-3%. Inversion scenario: -1% to -2%. Our mitigation: • Monitor spread continuously • Automatic alerts at 0% spread • De-leverage protocol activated at -1% spread • Emergency reduction at -2% sustained spread In 35+ years of indexed products, prolonged inversions are rare but have occurred. We plan for them.

Lapse happens when loans exceed cash value. Prevention is 100% about loan-to-value (LTV) management. Our approach: 1. Target LTV: 50-70% — Never approach policy limits 2. Quarterly reviews — Catch drift before it becomes dangerous 3. Automatic adjustment triggers — At 75% LTV, we reduce leverage 4. Emergency protocols — At 80%+ LTV, immediate de-leveraging Lapse only happens through neglect or over-aggressive borrowing. With active management, it's preventable.

The absolute worst case is policy lapse with a large loan balance. If the policy lapses, the loan becomes taxable income. Example worst case: • $500K cash value with $450K loan (90% LTV) • Policy performance drops, cash value falls to $420K • Loan interest adds $25K • Cash value can't support loan → Policy lapses • $420K of "phantom income" is now taxable • Tax bill: ~$150K+ This is preventable. It requires ignoring monitoring, adjustment triggers, emergency protocols, and carrier warnings. We've never had a LIFT policy lapse. Active management prevents this cascade of failures.

No—but it's also not magic money. What's real: • Policy loans don't interrupt cash value growth (this is how all life insurance works) • Borrowing at 5% to earn 7% creates 2% arbitrage (basic financial math) • Using borrowed funds to create additional growth compounds returns (leverage works) What's not "free": • You're taking on leverage risk • You need ongoing professional management • Complexity requires engagement • Returns are not guaranteed LIFT accelerates returns through leverage. Leverage amplifies both gains AND potential problems. That's not "too good to be true"—it's finance.

Three reasons: 1. Licensing barriers: Traditional financial advisors (Series 7, 66) aren't licensed to sell life insurance. They literally cannot discuss these strategies. 2. Compensation conflicts: Wall Street charges fees on assets under management. They can't charge fees on life insurance cash value. There's no incentive to educate you. 3. Complexity barrier: These strategies require explanation. Most advisors don't invest the time, and most consumers don't seek the education. This isn't hidden—it's just not marketed to you by the people you typically talk to about money.

No. They're related but different. Infinite Banking Concept (IBC): • Uses whole life insurance (not IUL) • Focus on becoming your own banker • Policy loans for personal/business financing • Lower returns, higher guarantees • Nelson Nash's original concept LIFT Strategy: • Uses indexed universal life (IUL) • Focus on accelerated wealth accumulation • Policy loans specifically to fund additional premiums • Higher return potential, more complexity • Advanced implementation of leverage principles Think of IBC as using your policy as a personal bank. LIFT is using your policy as a growth accelerator.

Several possible reasons: Charitable interpretation: • They're not licensed (most RIAs, CFPs aren't) • They don't understand the strategy • They've only seen poorly implemented versions Cynical interpretation: • They can't charge fees on it • It competes with products they sell • It's easier to put you in index funds Reality check: Most financial advisors are well-intentioned but limited by their licensing and business model. Ask your advisor directly: "Are you licensed to sell life insurance? Can you explain leveraged IUL to me?"

There are no hidden fees. But there ARE fees, and they're disclosed. Policy-level fees: • Cost of insurance (mortality charges) • Administrative fees • Premium loads (reduced in max-funded policies) • Rider charges (if applicable) Strategy-level fees: • Policy loan interest (5-6% variable or fixed) • Management fees (if using FlexVault's comprehensive system) What's NOT a fee: Policy loan interest isn't really a "fee"—you're paying for the use of capital, and your cash value continues earning during the loan. Total cost comparison: A well-designed LIFT policy has all-in costs of 2-4% annually. Compare to: managed accounts (1-1.5% AUM + fund fees), 401K (0.5-2% in fees + tax drag).

First-year commissions on IUL are typically 80-110% of target premium. Renewals are 2-5% for several years. What this means for you: • Agent is well-compensated upfront • Creates potential conflict of interest • Agent may be motivated to sell, not explain Our approach: • We disclose compensation when asked • Our relationship is long-term (ongoing management) • We make money from clients who succeed, not from sales • We'll tell you if LIFT isn't right for you Red flag: Any agent who won't discuss compensation or rushes you to sign. We spend more time on education than sales.

Insurance companies make money—they're businesses. But this isn't zero-sum. Who wins with LIFT: • You: Tax-free growth, flexible access, death benefit protection • Insurance company: Premiums, investment spread • Agent/Advisor: Compensation for implementation and management Who loses: • IRS: Doesn't get taxes on your growth • Wall Street: Doesn't get management fees on your assets The real question: Is the value you receive worth the costs? For qualified clients, the tax-free compounding and leverage benefits far exceed costs.

Completely different risk profile. Margin investing: • Borrow against stocks to buy more stocks • If stocks drop, you get margin call • Forced selling at worst possible time • Can lose more than you invested • Volatile assets backing volatile leverage LIFT/Policy loans: • Borrow against cash value to fund premiums • Cash value has 0% floor (can't go negative) • No margin calls, no forced selling • Can't lose more than you invested • Stable asset backing controlled leverage The fundamental difference: Margin compounds volatility. LIFT leverages stability.

All leverage carries risk. The question is: what kind of risk, and how is it managed? Types of leverage risk: • Margin call risk — Not present in LIFT • Interest rate risk — Present, but manageable • Performance risk — Present, mitigated by floors and monitoring • Lapse risk — Present, prevented by LTV management Risk spectrum: • Margin investing: High volatility, can lose everything • LIFT: Moderate complexity, can underperform but won't zero out • Traditional IUL: Low complexity, lower returns • Savings account: No risk, no real returns (inflation eats principal) LIFT sits in the "moderate, managed risk for enhanced returns" category.

Much less than you'd think. What happens to your policy: • Cash value has 0% floor — No negative crediting in any year • Index participation is reset annually — Bad year = 0%, not -30% • Policy loan rates don't spike — Fixed or predictable variable What happens to LIFT specifically: • Your cash value doesn't drop • Loan balance continues accruing (as always) • Spread may narrow but stays positive (loan rates don't spike) • Next year resets with new opportunity for gains 2008 comparison: Traditional IUL policies credited 0% that year. Cash value stayed flat. Compared to -38% in the S&P 500, this was massive protection.

No. What you can lose: • Growth you would have had with traditional approach (opportunity cost) • Premiums paid (if policy lapses, though this is preventable) What you cannot lose: • Money you haven't contributed • Principal beyond your premiums (no negative cash value) Contrast with margin: Margin investing can result in owing money beyond your investment. LIFT cannot.

Most people, honestly. LIFT is wrong for you if: • Annual premium capacity under $50,000 • Time horizon under 10 years • Need "set and forget" simplicity • Uncomfortable with any leverage • Unstable income for premium commitment • Already maxing all tax-advantaged space and need liquidity LIFT is right for you if: • $50,000+ annual premium capacity • 10+ year time horizon • Willing to engage with quarterly reviews • Understand and accept leverage risks • Stable income for ongoing premiums • Value accelerated tax-free growth

There's no hard minimum, but practical guidelines exist. Income guidelines: • $300K+ annual income ideal • $200K minimum for meaningful benefit • Must have "extra" income beyond lifestyle Premium capacity guidelines: • $50,000+ annually recommended • $25,000 possible but less effective • Higher capacity = more leverage opportunity Why these minimums? LIFT's benefits come from scale. $25K annual premium with leverage provides less absolute benefit than might justify the complexity.

10 years minimum, 20+ years optimal. Commitment breakdown: • Years 1-2: Funding phase, cash value building • Year 3: Leverage activation • Years 3-10: Acceleration phase, critical to stay committed • Year 10+: Income available, strategy matures What happens if you stop early: • Before year 5: Likely surrender charges, potential loss • Years 5-10: Policy can continue, but leverage benefits reduced • After year 10: Flexible—can reduce premiums, take income, adjust

There are options, but stopping early affects outcomes. Options if you must stop: • Use cash value: Policy loans can cover premiums temporarily • Reduce coverage: Lower death benefit reduces costs • Paid-up status: Stop premiums, keep reduced coverage • Surrender: Cash out (with potential tax implications) Our approach: • Build flexibility into policy design • Emergency premium coverage built into leverage structure • Regular reviews identify cash flow issues early • Adjustment options before problems compound

They're similar strategies with different names and implementations. The strategy category: Internal policy leverage (using policy loans to fund premiums) Different brand names: • LIFT (Infinite Wealth Builder) • FlexMethod (National Life Group) • MPI (Insurance marketing term) • Duplifunding (Various agents) • Hyperfunding (Various agents) The difference: Naming, monitoring protocols, and management intensity vary by provider. LIFT is our specific implementation with proprietary monitoring and adjustment protocols.

Different leverage mechanisms entirely. LIFT (Internal Leverage): • Your policy loans fund premiums • No external bank involved • You control the leverage • More flexible adjustments Kai-Zen (External Leverage): • Bank loans fund premiums • 50/50 split (you pay 5 years, bank pays 5 years) • External underwriting required • Typically $5M+ estate targets

Sometimes, but it's usually better to start fresh. When existing policy works: • Significant cash value already built • Policy designed for leverage (max-funded) • Carrier offers competitive loan rates • No surrender period remaining When new policy is better: • Current policy not designed for cash value • High policy costs eating growth • Carrier loan rates uncompetitive • Better carriers available now We'll analyze your existing policy and give honest assessment.

We work with multiple top-rated carriers. Our criteria: • A+ or better rating (AM Best) • 100+ year operating history • Competitive crediting rates • Favorable loan provisions • Strong floor protection We don't name specific carriers here because: • Best carrier depends on your situation • Rates change • Underwriting varies by health/age • We're not trying to sell a specific product

Quarterly, with annual deep-dives. Quarterly reviews include: • Cash value vs. projection tracking • Loan-to-value ratio monitoring • Crediting rate assessment • Adjustment recommendations if needed Annual reviews include: • Full policy illustration update • Strategy optimization review • Tax coordination check • Long-term projection adjustment Why this matters: LIFT requires active management. "Set and forget" is how lapse risk becomes real.

Great! That's the whole point of education. Our philosophy: • We'd rather you say "no" informed than "yes" confused • Not everyone is a LIFT candidate • We offer traditional IUL and FlexVault without leverage • We'll recommend what fits, even if it's less profitable for us Alternative options: • FlexVault without leverage — Four-component system, lower complexity • Traditional IUL — Simple, proven, 6-8% returns • Infinite Banking — Whole life focus, different strategy