Transamerica Financial Choice IUL 2 | Full Product Review & Breakdown (Video)

hey guys So we are back with a product review and 
today I’m excited to kind of give you an update on one of our most popular and most watched videos 
on our whole channel and that is the Transamerica IL product review So they’ve come out with a 
relatively new product I want to tell you kind of what’s changed about it Does it help you does 
it hurt you and we’re going to kind of leave it in the context of cash value future income taxfree 
income type goals And so I’m excited to get into this Without further ado I’m going to go through a 
few things on the policy that’s changed And if you haven’t seen the initial product review I would 
recommend kind of pausing here and going back and kind of watching a more outlined picture of the 
full product Uh we’re going to go through kind of what’s changed here though in this video So the 
first thing that we notice is obviously the design This is a huge cover page that’s relatively new 
We got a little bit of a live your possibilities You know I’m I’m in favor for that I like that 
Nothing wrong there The Transamerica Financial Choice IL2 is their new product This is available 
I believe in most states And what I really want to touch on is just a few things that are different 
and kind of updated and I would venture to say are improved from this IL kind of compared to the 
previous generations of Transamerica IULs There are a ton of agents out there selling Transamerica 
IL policies and we have a ton of policies being reviewed every year by our team from Transamerica 
most the time I’ll go ahead and say they’re not designed specifically well And before this product 
the product itself is one of the most expensive and one of the worst products for cash growth and 
income kind of out there And so I I’m excited to say this is kind of an improvement Maybe they’ve 
seen maybe Transamerica has seen our videos I’m not sure what happened Maybe they finally heard 
the cries of the people because this product has taken some steps to improvement And so how how 
improved is it well let’s get into it real quick So the the first thing that we see here and this 
comes on you know the third page is we have a lot more indexing options to choose from So let’s 
find a page that kind of goes through each of those So the last Transamerica IL for kind of 
cash growth and income their best option only gave you three indexing options and that’s 
counting a fixed account which is following essentially their bond portfolio Every carrier 
does it So you’re kind of left with really only two options if you want to choose a strategy 
that’s using indexing options and strategies And that was something like a global index account 
and an S&P account So you had a global index you had an S&P to to choose from Now we have five or 
six options We got six options to choose from So let’s go through each one kind of what I do like 
what I don’t like here And so the first thing that I think we should look into is the indexed account 
monthly charge Now if you’ve seen the video before you know this is one of the biggest things or 
the biggest knocks I’ll say on the Transame IL is it adds a huge percentage of fees over time that 
is no questions asked It has to be on the policy Now they’re essentially giving you the option So 
do you want to have a policy that has an extra charge do you want to elect to be in in the 
index that gives you a charge on some of the indexes you can see there is a monthly charge or 
annually however you want to split it up And then some there you know there are no charges So let’s 
look at the ones with no charges first We have a a new index introduced to the Trans America world 
the Fidelity Small Mid Multiffactor Index That’s very similar to a few different indexes out there 
with different carriers giving you a relatively high participation rate And so let’s pause here If 
you have a long- winded named index with a higher let’s say over 150% participation rate and it’s 
uncapped odds are it’s going to be what’s called a volatility controlled index which is going 
to try to limit your volatility on the index It’s going to give you less up and down from 
you know like the S&P and so that is one of the newer options here This does not come at a 
charge I would venture to say this might be the best option and it’s not because of anything the 
actual index is It is because your other options have relatively low caps And so let’s go look at 
the next no charge index We got the global index account with an 11% cap That’s actually not that 
bad either And I’ll go ahead and go to this what the global index is It’s going to kind of comprise 
of three major indexes 50% of whatever is higher on the S&P and Euro stocks 30% of whatever is 
lower and then 20% in a Japanese index So we’re kind of getting a global performance out there for 
the indexes So what I really wanted to touch on was the S&P index account with no charge is 9.25% 
And that’s relatively low in the industry You know we have indexes the same S&P account no charge as 
low as 6% and as high as I don’t know 13 14% The reality is this is a lower cap on the index right 
now If you wanted to elect for a higher cap which is more industry standard you have to pay the 
fee here So if you want 11.75 cap you got to pay the fee So beforehand they were offering a higher 
cap and it was a mandatory fee on the policy Now if you want a lower cap you don’t have to pay the 
charge So is that a huge advantage is that a huge upgrade i suppose because you get the choice but 
you’re sacrificing you know 250 basis points there without the charge So the Global Plus gives you 
a big boost as well 1% annual charge So they’re giving you more options but are they really giving 
you favorable options when it comes to these four uh I guess I’ll leave it up to you guys You tell 
me if you think that that that’s a good option But you know the Balanced and the Fidelity are two 
rather good options They’re both uncapped Whether or not they perform that’s neither here nor there 
The Balanced does come with a charge It’s a pretty small charge but that’s the differences You know 
you’re getting six options which is really four options but let’s let’s say it’s six You get six 
options instead of two options on the new product So that’s not bad I would say you know in terms 
of indexing options in terms of diversity I’d say it’s pretty decent I’d say kind of middle 
tier middle ground It’s nowhere near the best nowhere near the worst I would say they used 
to be really the worst and now they’re kind of mid-tier And then we have absolutely no bonuses 
non-G guaranteed or guaranteed on the indexes So we don’t have any options for bonuses And I would 
say that’s a knock as well If you want to compete in the space if you want to be a carrier that 
is giving the best bang for the buck you got to have bonuses on the policy Some carriers 
are guaranteed some are not With Transame no bonuses whatsoever So you can see here this is 
a generally speaking a pretty normal IL policy illustration ledger page here It has changed from 
the old transamerica which kind of looked like it was it needed an update Let’s just say that So 
they add some color They added some details here 50,000 for seven was kind of the illustration that 
we ran None of these numbers really matter We’re using that minimum death benefit minimal fees 
minimal commissions to maximize the cash here in order to generate taxfree income And this 
illustration is doing that But let’s go to the next thing which is the loan provisions Now uh 
Transamerica has one of the worst loan provision contracts You know contractually speaking they 
had the the worst loan provisions in the industry If you want to learn more about loan provisions 
we have a ton of videos on it But I’ll just say this Transame had some really bad loan provisions 
They had no participating loan provision options They only had what’s called you know wash loan 
or fixed loan provision that really hinders your chances of generating consistent maximal income 
you know on these types of policies And so I wanted to show you kind of what they have now 
because I will say it is an upgrade from what they had before Okay so they break it down here 
with a few different you know lovely charts with the new purple color And if this looks kind of 
overwhelming I’ll break it down for you It’s really simple at the end of the day So we have 
two different types of loans on this new product conventional loans which is essentially what we 
would call fixed loans or wash loans although it’s not totally a wash unfortunately And then 
they have uh some index loans So let’s go with the conventional loans first They split it up 
meaning if you were to take these and choose the conventional loan the first 10 years 
of the policy it’s called a standard loan If you start taking loans out or when you start 
taking loans out and use the conventional loan 10 plus years we’re going to use a preferred 
loan It’s going to be a preferred loan So the only difference here is what you’re being charged 
You’re going to be credited 2% every single year That is completely guaranteed We’re really only 
all that matters is the guaranteed parts of this So what is guaranteed when you’re taking these 
loans out and this is a non-participating loan So when you take the dollars out it’s transferred 
into another account It is credited 2% whether it’s the first 10 years or you know 11 plus 
years doesn’t matter But what it’s charge what they’re charging you those dollars does 
change So this is not very common but this is essentially a non-g guaranteed wash loan which is 
no good at all I would say their previous fixed or wash loan was better So they kind of took a 
step back in the conventional loans they call it now But let’s go through what this means So 
so within the first 10 years they’re going to credit you that 2% and right now it is declared 
that they will charge you 75 or 2.75 with that net rating being a negative number So if you do it 
in the first 10 years you kind of have a negative arbitrage on on your loans So that’s obviously 
not a wash That’s costing you something It’s not costing you a ton but it is costing you something 
And the guaranteed is a little more than that 1% versus 75 So you’re getting credited 2% guaranteed 
You’re getting charged up to 3% So that is not a fixed loan by any stretch of the imagination This 
is a variable conventional loan Now after the 11th year it gets slightly better You get credited the 
same 2% Right now they declare it a wash loan So they declare you get that same 2% charge But in 
reality if they pull a lever which you know if a carrier has a lever to pull we should assume that 
they’re going to pull it They can increase that by a quarter% So your net arbitrage would be 
negative 25% a negative spread there So either way you write it up or sketch it up here you’re 
getting a negative arbitrage or negative spread on the dollars that you are supposed to be taking 
less risk on And so that’s not very favorable Most people don’t even choose the conventional loans 
anyway because you would be accepting you know potential potentially less income down the road So 
let’s get to the index loans The index loans are pretty simple This is a variable loan provision 
capped to 8% That’s all it is right now They’re declaring that the loan provision is 5% and 
it is guaranteed never to go higher than 8% So right now it’s at 5% It is guaranteed never to go 
higher than 8% So that is giving us all we need to know This is a variable loan provision That’s not 
the most favorable loan provision at all You know we’re looking for a fixed loan provision meaning 
if it was currently and guaranteed to stay at 5% that would be an excellent loan provision That’s 
what we’re looking for even if it was fixed with a little bit higher current rate Fixed meaning fully 
guaranteed I would accept that over a huge uptick on the guaranteed side So what this means is this 
with this policy with this income it makes it extremely hard to have a actual predictable income 
stream down the road because you have no idea at which the rate you are borrowing is going to be 
You don’t know how much it’s going to cost you If it’s 8% you’re going to have to outpace that to 
generate you know some good income to have that positive spread on the dollars that you are being 
uh invested in If it’s 5% you only have to outpace 5% for a positive spread there So I guess I’ll 
back up and say index loans the way these work are pretty simple These are participating loans 
When you are taking dollars out using an index loan the carrier’s loaning you the dollars the 
carrier’s placing a lean upon your policy meaning the interest earning power of the dollars do not 
change They do not go away And so you are going to get credited however your policy performs you’re 
going to get charged whatever the loan provision states So right now it’s 5% it could go up to 8% 
So uh those are really the biggest things that have changed about the Transamerica policy uh on 
this new product And so to sum up you know this Transamerica IL product has improved Their new 
product has improved if your goal is cash growth and income Is it the best bang for your buck 
i would say probably not It’s probably middle of the tier which is where a lot of carriers 
end up being because they’re not willing to uh give up some certain provisions They’re not 
willing to give up some levers And so if you’re looking into these index universal life policies 
for cash growth and future income tax-free income down the road you should reach out to our team 
and book a discovery call We would be happy to talk with you and kind of figure out exactly what 
you’re hoping to achieve and we will kind of be based on information and education and coming to 
a good decision point based on those factors and not trying to sell you on anything These policies 
are extremely helpful for the right fit and we can help you figure out you know is this a good 
fit for you or not So be on the lookout for some improved policies or some updated product 
reviews in the future But until then take care