1. “IBC Review, State of the Economy, and IBI Plans for the Future”
Robert P. Murphy
IBI Think Tank
February 2014

2. OUTLINE OF TALK
(a) Review of 2 Technical Issues (b) Economic Outlook (c) IBI’s Plan for the Future

3. (A) Reviewing Two Technical Issues in IBC

4. Review Topic #1: Cash Value Growth in a Whole Life Policy  A “front-loaded” policy has faster cash value growth than a more uniform policy.
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6. Theoretical Definition: The cash surrender value is the “expected” death benefit payment minus the “expected” flow of remaining premium payments.
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7.  Consider: A PUA contribution is just a “mini” ONE-PAY policy
 Consider: A PUA contribution is just a “mini” ONE-PAY policy!  So of course it gives a big jump in cash value, followed by a gradual rise for remaining life of policy.
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8.  Related (many missed on Exam): For the same out of pocket flow of $$ into policy over time, if structured as PUAs (rather than base premium), then DB is lower at any point but CV rises more with each payment.  This underscores Nelson’s focus on “need for finance” > DB
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9. Review Topic #2: “I heard the insurance company keeps cash value when you die!!”  Defusing a typical objection to whole life insurance.
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10. Here’s what I said at Night of Clarity 2013 workshop…
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11. “Cash surrender value” is the anticipation value of the expected future death benefit payment (net of future premium payments).
Akin to building equity in house nobody demands bank “pay my full equity” and give deed to house after 30 years! 11

12. Although technically true (and important to stress), my answer conceded too much to Dave Ramsey and others who make this objection, if we’re talking about IBC (not just generic use of Whole Life).
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13.  If you take out (spend) dividends and no PUAs, then death benefit constant. This allows apples-to-apples comparison with a term policy (+ mutual fund) that Ramsey wants to make.
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14. (Taken from Course Manual to show constant death benefit illustration…)
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15.  BUT, if you reinvest dividends and PUAs, then you’re pushing up CV (analog of mutual fund), but also DB. So yes, upon death you “only” get the DB (and not the CV too), but that DB itself is higher because you are listening to Nelson.
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16. (Taken from Course Manual to show rising DB w/ dividend reinvestment…)
 What DB on “same” term policy??
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17. (B) Economic Outlook

18. On Janet Yellen’s alleged forecasting skills…
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19. “At the time of our last meeting, I held out hope that the financial turmoil would gradually ebb and the economy might escape without serious damage. Subsequent developments have severely shaken that belief…I have significantly marked down my growth forecast. The possibilities of a credit crunch developing and of the economy slipping into a recession seem all too real.” Yellen at Fed meeting IN DECEMBER 2007.
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23.  We have to admit that another crash is coming
 We have to admit that another crash is coming. This is why the IBI stresses Austrian Economics—they are the only school that really understands the crisis that Bernanke/Yellen are setting up.  Practitioners must inform their clients of these developments, both as a general service, but also to win their trust. They will remember who had warned them, and who thought the worst was over.
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24. (C) IBI Plans for the Future

25.  The IBI has a two-pronged approach to spreading IBC: Educating Practitioners directly, but also evangelizing to the general public and pointing them to the Practitioner Finder.
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26. Practitioner Education:
* the Think Tank * Bank Notes * online Forum discussion * Lara-Murphy Report * Monthly online video briefings (begun in December 2013).
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27. Outreach to the Public:
* Night of Clarity (Nashville) * Videos on IBI YouTube Channel *Lara-Murphy Report * Marketing brochure (ask details) *Forthcoming new books from Nelson and Bob/Carlos!
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28. We appreciate your early support. The IBI has a bright future
We appreciate your early support. The IBI has a bright future. Americans need to learn the benefits of IBC…NOW!
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