Caught on Tape: A $100K Insurance Shock Uncovered

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I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. If you have a life insurance policy, the cash value might not be what you think it is. And that money could disappear more easily than you'd think. Jonathan Aguilera has become kind of like the Robin Hood of life insurance policies. He gets on the phone with policyholders and calls their insurance companies with them to expose the policies that are just scams. Today, we're mostly going to be focused on IULs. These policies are different than term policies. Term life insurance policies exist for a term. They're cheaper and they'll pay out if you die during the term. With permanent life insurance, the term is your life. And there are different kinds of permanent life insurance. Two kinds you've probably heard of are whole and indexed universal life. The second one, indexed universal life, is what we're focused on with Jonathan today. Today, I talked to him about the dark side of life insurance. And then we do some insurance rehab and help a real policyholder hold their insurance company accountable. Jonathan Aguilera, welcome to Money Rehab. Pleasure to be here. Pleasure to have you here. I am your biggest fan on social media. I slipped into your DMs. You did. Because I was like, I love what you're doing. We have to be friends. That was an honor for me. I really, really appreciate what you're doing for so many people out there. You help expose the scammy parts of life insurance policies. How did you get started? Like, I have a thousand questions for you, but somebody must have hurt you. So it was actually a client that I was helping. I couldn't get a hold of her policy because she was busy working. So this is what happened. So I never replace any kind of life insurance without doing a full breakdown of a policy. So she was like, Jonathan, can you just call the insurance company for me? So I called and then I just started asking questions and I didn't record anything. And that's where like the light bulb went. I'm like, he's literally telling me everything. What you guys hear is like, this is what he was telling me. And this client was just very difficult to get a hold of. So after the phone call, I go, do you mind if we just call right back? But this time I'm going to record it. And she goes, yeah. I mean, I'm on lunch break. So we called, recorded everything. And I posted it on TikTok. and didn't think anything of it. Right. And then I woke up the next day, I had like a million views. And then what the heck happened? So then DM, like, can you call mine? Can you call my insurance? I'm like, sure, I guess. So you started in the insurance industry. That's correct. Selling term insurance, which is different than indexed universal life policies, which we will talk about. What excited you about being in insurance? is seeing how many people that did have life insurance are paying for whole life insurance and iu index universal life and how it's like 10 times more expensive than term insurance and i'll give you a perfect example my aunt right she's one of those no-it-all aunts i don't know if you can relate to that and it's kind of a good thing like ah see you got scammed i'm kind of glad but now i get to fix it right i look like the hero so she had um a policy a whole life policy and She was paying like $900 a month for it. And then with us switching it to a term policy, it was like $100 or something like that. This was back then. So I instantly saw people are being taken advantage of just because of the financial illiteracy people have. And it's so easy. People are looking for this shortcut to success or to retirement that they think investing in life insurance or they do these crazy investment strategies because they're trying to get to that finish line faster. I mean, the intention is right. But what ends up happening is a lot of people get bamboozled and scammed by not really understanding what they're buying. So you focus on universal life insurance, whole life insurance. What's the difference? So they're very similar and very different. I know that sounds weird, right? So they're similar as far as they both build this like cash accumulation account called cash value. Okay. The difference between like an IUL, index universal life versus a whole life is that whole life has guarantees in it. And those guarantees are like 2% to 3% growth. So you'll never lose in that, but you kind of do because inflation is about that. And people like this whole, oh, I can never lose money in a whole life. It's contractually guaranteed. So you hear a lot of insurance salesmen say that. or IULs, they don't give you the guarantee. That's where they're very different. But as far as it's permanent life insurance for the rest of your life and it builds this cash accumulation account called Cash Valley, that's just terrible. There is a structured component of it where there's no losses, but there's capped gains in some cases. So explain to me the structure. It's an investment product and a life insurance product, and it's downside protected. So it goes when somebody pays in, it goes into a cash value component and then a death benefit component. Right. And then what happens? Yeah. So let's just say you're paying a thousand bucks a month, 12 grand a year. Let's just say of that 12 grand, 2000 of it for the year went to fees and cost of insurance to pay for the life because it's life insurance foremost. Right. So the other 10 grand is going to this cash value component. and the insurance company is going to go do what they got to go do with it to go buy something called call options. I'm not too familiar with that. Against the S&P 500 and then whatever that does, it gets credited to the cash value. So you got these cap rates of like, let's say you're in the S&P 500, the cap rates 10%. The biggest challenge though, is that it's tracking the index, not the total return. So by default, you're tracking the S&P in an inferior way. Yeah, you're buying a model of the index. You're not buying the index. Exactly. And it doesn't have dividends reinvested. So you're just not going to ever be actually buying the VOO. Right. Or SPY or IVV or whatever. But a lot of people get really overwhelmed by that type of stuff. You're usually, though, going to make less than what you would if you put your money in one of those ETFs or mutual funds that track the index. But you're not going to lose money. So that's like their talking point is like if the S&P 500 does negative 20 or zero or worse, well, your IUL does zero, but you still have fees and cost of insurance coming out, and that's still a loss. So when you pay the premium on an IUL policy, a portion of that goes to insurance costs and fees, and then the remainder of that goes into the policy's cash value. And then from that, you get capped at a certain percentage. So if it's the 10% cap that you mentioned, but the S&P 500 gained 20%, you're still going to only get 10%. But if it lost 10%, you're not going to lose 10%. You're going to get zero. That's correct. Also, not everybody knows that the cash value of their policy is probably going to be lower than what they contributed. On a lot of your calls, this is the part that people are stunned by because they think if they've paid $40,000 into their policy, that's what they're going to have. Right. But they're in reality going to have a lot less. Why is there such confusion there? So you'll hear something, and you'll probably get this in your comments, which I'm excited to see the comment section. Let's go. That's just not a properly structured policy. This is a big phrase that you hear. Yeah. So what they're referring to is how much life insurance versus how much you actually paid towards a policy. Okay. So I'll give you an example. I'm 37. If I wanted a $150,000 life insurance policy, I would have to be paying about $1,000 a month for that $150 for it to be properly structured. Very expensive. Yeah, that's way too much. My term policy cost me like $30. Yeah, totally. My husband and I have term, to be clear. Good. Awesome. Can we do one of these calls together? Yeah, let's see. Let's see if she's available now. Hello. how are you good how are you unbelievable okay so do you have about 10 minutes 15 minutes right now to call your company uh yeah it uh i have my husband here with me as well what i want you to do is i want you to call call the company actually let me call them right now your call may be recorded for quality and training purposes. For assistance in English, press 1. If you're an agent, press 1. For death claims or deaths under an accelerated benefits rider, disability, or long-term care, for assistance with a life product, please press 1. For assistance with withdrawal, press 1. Thank you for calling. My name is Helen. How can I speak today? Hi, Helen. My name is and I have some questions about my policy and the policy number is. How can I assist you with this? I have a friend of mine here and I am giving him permission to speak on my behalf. So really quick. Thank you so much for taking my call. What kind of life insurance policy does have? This is an IUL policy a permanent type of policy OK And what is her monthly payment Monthly payment it is set to be Per month, okay. And so since the policy has been opened, how much has she paid in total premiums so far since she's had the policy? Sure. The total premiums paid as of today, that's $49,000. $49,000. Okay. And let's just say had like an emergency and she needed access to her money. What's her surrender value? Well, their net surrender value as of today, that's $25,774.13. That is just in case if they would like to liquidate the policy. Okay, perfect. So out of the $49,000, only $25,000 is available. Were you aware of that? No. Okay. All right. So now let's just say she takes out a loan. Okay. Does she have to pay that back with interest or is it her money? How does that work? So for loan, since we are using the cash value as a collateral, that's the reason why there's a loan interest that's being billed once a year and that it's every policy anniversary year so that they can be able to use that moving forward wants to pay it back. Perfect. So there's a loan interest rate for that. The current loan interest rate is 5% if we prefer to do a loan. But we do have this partial withdrawal option. If you don't want to have an interest being billed, we do have the partial withdrawal option, which is for partial withdrawal. We are not using your cash value as a collateral. However, it is an irreversible type of transaction that once you submitted that request, it will automatically be removed on your cash value as well as on your coverage. So you don't need to pay it back, but you cannot access that account anymore. Perfect. So I'm not too sure if you can help me with this question, but are you able to calculate how much on a monthly basis are all the fees and the cost of insurance that she's paying? Because I know you said she's paying $1,000 a month. How much is going towards cost of insurance and fees? Like I know there's a policy fee. There's a cash value fee, and there's an expense load fee, I believe. Are you able to calculate all that and let me know how much on a monthly basis that is? We don't have like anything to have a calculation on that. Those information is actually being reflected in the annual statements that is being sent out every, as I can see here, the last annual statement that was sent out on here. That was July 23rd of this year. Got it. So on there, on the second page of the annual statement, it will show like a table of the policy transaction statement that will show the expenses, the cost of insurance, and the interest being credited. So are you able to pull up that annual statement right now and just tell us how much all the fees are? Or she has to do that manually? Well, I was able to pull up here the one on July 23rd of this year. So, based on that, it shows this is from August of 2024 to July 22, 2025. The total premium expense charge is $720. The total accumulated value charge is $117.13. The total cost of insurance charge is $236.62. And the total admin fees or other charges is $2,028. That's annually, right? Yes, that's an annual. So she's put in $12,000 a year. $3,000 of it went to fees. Were you aware of that? No, we were never explained. about the costs of the policy. Okay. All right. No worries. And by the way, ma'am, you deserve a raise. You're unbelievable. I appreciate you for helping us out. You're doing a phenomenal job. Thank you so much, first off. I have another question. Like the cost of insurance, how does that work? Does it go up every year? Does it increase or does it stay the same? Does it go down? I'm just a little confused. If you could just give me some clarification on how like the actual cost of the insurance works? The cost of insurance definitely increase every year since, you know, cost of insurance or cost of insurance keep on increasing as the insured ages. So, you know, that's the reason why it keep on increasing yearly since insured is actually aging, right? So because that will be a higher risk on being insured now as to how it is being calculated. It actually depends on how your policy gets structured by your agent since that's the reason why it depends on the coverage amount, all of the necessary structure that your agent set on your policy. That's how much will be fees and cost of insurance will be on your policy. Yeah, perfect. So it does go up. So now my question is, if the cost of insurance is getting more expensive, like she's been paying the same thousand bucks. Has she increased her payment during this duration of the policy or has it always stood the same? Did you pay more every year or did you just it's that been that same thousand bucks a month for since you had the policy? No, we are. I always paid the same amount. OK, perfect. So you never increased it then, right? It's always been the same. And let's just say you kept the policy. you were going to continue to pay the exact same dollar amount for 10, 20, forever, right? Okay, okay. So my point being, ma'am, is she was never intending to increase her monthly contribution to the policy. If the cost of insurance gets more expensive than what she's putting into the policy, where are you guys going to get the money to cover the cost of insurance if it gets too expensive? That's where the cash value cost us in. So if by any chance that the premium that we are receiving is not enough to cover the cost of insurance already, we are already using the cash value to keep the policy active. That's the reason why most of the time, if there will be no premiums being paid, we are using the cash value to keep it active. Awesome. Okay. I mean, were you aware of that? I was never explained about that. Okay. Yeah, no worries, no worries. Okay, perfect. So my last question to you is what happens if there's no more cash value to pay for the policy? What's going to happen to her policy? That's the time that the policy will be in a lapse status or in a pending lapse. That's when the system will be sending out a bill or a reminder that we need to make a payment towards this policy to keep the policy active since there's no enough cash value anymore to cover it. And really quick, you said your husband had a policy, right, as well? Yes, he does. Are you able to bring up that policy just so I can see how much he's put into that policy? Are you able to get your husband to give the information? Yes, he's right here, right here. How can I set three of you for this one? So same thing. How much is his monthly payment? That's the same thing. That's $1,000. And how much has he put in total into his policy since he's had it? That is $50,035. So we're at $98,000 or $96,000 in total. How much surrender value does he have? The net surrender value is $26,159.76. Perfect. Okay. That's after we deducted the surrender penalty already. Yeah. Okay. All right. Thank you so much. We'll call back and see kind of what we want to do with the policy, if we want to put more money into it. Or, yeah. Yeah. but you've been amazing by the way. So thank you so much. I appreciate your time. Okay. You're welcome. Thank you for calling and have a great friend of you. Okay. Okay. Oh, you there? Yes. Okay. Yeah. That was brutal. Let me, um, let me finalize this. I'll call you after cause we're going to get this money back. Okay. How was that phone call? Did you learn something about your policy? Yeah. It was the biggest mistake I ever done in my life. Oh my God. Why do you say that? Because we're only losing money. There's no way. Because when we bought the policy, we were promised that it was a life insurance with benefit in life if we ever need it and a retirement plan. He promised us that with this $1,000 month, we would retire each receiving $4,000 a month from the policy. And he also promised us that our money would grow inside the policy to a point that we wouldn't need to make the monthly payments anymore because the interest that we were going to earn would be enough to cover the costs. But at the rate that we are going, we are going to lose everything. Oh, my God. These are not cheap policies either. That is not what he promised us. Nothing of what he said. So basically, you were sold this policy hoping that once you retire, you will have all the money you need for the rest of your life. Yeah, the main reason we bought the policy was because he promised that our money would grow and we would be able to retire even though we are not legal in the States. Oh, yeah, yeah. And that is what he promises to everyone in his social media. What do you mean on his social media? He has an Instagram account where he posts videos in a daily basis and that's what he promised. Like there's videos where he says, if you were told that you cannot retire in the United States because you were not a legal or a citizen, that is a lie. I can help you with that. There is a way to do that. And you can earn $4,000 a month. He has a lot of videos in his social media where he promises that. and the way that we found him he posted an ad on a facebook group and we saw the ad and we reached out to him to know more about it and he promised that we would have the life insurance with benefit in life if we ever like had an accident or if we discover some kind of illness the policy would cover for hospital costs, anything like that. But he never said that that money would be taken off of our cash value, everything that we were going to put in the policy. And the main reason we bought was because he promised the retirement. And $1,000 a month is a lot of money. $2,000, including your husband. We work hard. We work hard every day. My husband wakes up at four in the morning every day to go to work. How much do you guys make a month? It depends. We work with construction. So some months we make good money, but other months are slow and it's not that good. So we don't have an exact amount a month. A lot of times we had to like really, really cut on expenses to be able to pay for the policy because we were believing in him. And when did you realize that this wasn the right policy for you It was a couple months ago A friend of mine she started working there with them because they are a big group of people and they are every day doing like paid ads to recruit more people because they tried to recruit me when we started with the policy. We even went to a meeting and they tried really hard, but my heart told me, don't do that. So I didn't do it. But they are like, if you are an agent and you start your own agency inside the agency, you can recruit people. And these people that you recruit, any sale they make, you earn a percentage of that. And they are like a really big group of people doing the same thing to a lot of people. So this friend of mine, she started working there. But she realized like if these people make this lot of money with the sales, something's wrong. Somebody is losing money. So she went inside the company and she bought some courses. She went to reach to another person who worked with insurance for a long time. She bought courses from outside the country. She spent almost $10,000 in courses to learn what this policy really was. And she figured out that what they do is they they arrange the policy in a way that they make the most of the commissions, the higher commissions. But you who's buying the policy, you just lose money the way that we are right now. So did he stay in touch with you until after that cancellation period to make sure you were good or you never heard from him again? No, he used to make a Zoom meeting with us once a year, just to ask how we were, how things were, and just to tell things that we don't really understand. but last year on the last one we had he tried really hard to get us to put more money in the policy he asked for 200 from each one of us on each policy per month and yeah we had some um investments in our country and my husband told him like no this is not making sense for us anymore because this is not growing at the rate you said so we're gonna just stick with the thousand dollars a month and that's okay but then after this friend of mine she asked to see our policies and she explained to us everything that was wrong i tried to talk to him we set up a meeting but my husband was at work and he couldn't come so it was just me and him but i recorded the audio of the meeting i have the recording and i started to ask him questions and he wouldn't answer and we get to a point where he told me i'm not going to answer anything to you unless your husband is present and i asked him why yeah and i told him why you're not saying that i have a policy so i'm entitled to ask questions and he said no i will only answer questions if your husband is present because he is the one who always made the decisions and i told him if i am here it's because i make decisions and he said no i'm not answering and i asked him do you remember when you promised us our money would grow on a rate of at least 7.5 percent and he said of course and I told him, yeah, the papers show that it's 0%. What's going on? And he didn't have answer for anything. So after that, he reached out for my husband and they had a meeting. I didn't want to see him anymore, but I was on the side listening and he tried to convince my husband that even though we lost this much money, it was good. We should be thankful. And my husband told him, no, this is not making any sense because the investments I have, I earned something around 10%. And he was like, no. So he was trying to convince us any way he could that losing this money, it's good. We are on the right way. And when he eventually realized that he couldn't convince my husband that he wouldn't be able to convince my husband, He went to another side and he tried to make us think that if you cancel your policy today, you will die tomorrow. The only thing that keeps you alive is having this life insurance because he didn't have any more arguments. But unfortunately, we didn't report this call with him. Well, it sounds like this group is also facing a class action lawsuit. Did you see that for allegedly operating an illegal pyramid scheme where they target immigrant groups? No, I have no knowledge of that. So when did you feel like you needed to get out? When this friend of mine, she explained to us everything that was wrong. And thank God, in the same week, my husband, like, it was just random. but and um one of the jonathan's reels appeared to my husband on instagram and he sent it to me and said hey reach out to this guy i think he can help us and that was like the light of the end of the tunnel because we didn't know what to do and as you guys are working together what's the game plan like what's the end game goal here i just want the only thing i don't want to like bad to happen to anyone i just want justice and i just want to cancel our policy and get our money back well thank you so much for sharing your story with us will you keep us posted via jonathan i I hope that you get all your money back and I'm so sorry that this happened. Yeah. Thank you. Thank you for sharing that story. You're welcome. Bye bye. I'm so happy that we did that call. I'm so happy to. Thank you for letting us listen to it. It really helps paint the full picture of what's going on here. Cause there's so much stuff as she was saying, that's put out in these short clips online. And I have so much empathy for her. Like as an immigrant, she wants to do right by her family and her daughter. Like, of course, like she just wants to do the right thing. And she was lied to. That's the rawest of the raw of the raw. It sounds I mean, it's like the same script. There's somebody that's like a really convincing broker, it sounds like, who gets them to believe the sun, moon and the stars. They pay something that's probably above their means. and they hope that it's going to take care of them for the rest of their lives. But then they don't realize that it's not there or it's far less than they expected. She found someone on social media. We just talked about 75% of people are getting their financial education on social media. She sees that. She wants a shot. And I didn't even talk about this. They're targeting people that are immigrants because you aren't a citizen. you can't get a Rotha, which is a total lie. It's a total. So they're praying like it's outrageous. If you don't have kids, do you need life insurance? Answers. Yes. You need life insurance. If the answer is no, invest your money. Do you have kids? I do. I have a four year old, so I have a lot of life insurance. What's your policy? I have a four million dollar term policy and I pay about one hundred and ninety two dollars. So I pay one ninety two. I'm up four million dollars. I know it doesn't look like I'm a preferred rating. Somehow they gave me a preferred rating. What does that mean? That I'm healthy. I probably eat vegan. Oh, I see. Yeah. I'm not vegan, but they probably like, hey, you figured you fit the profile. So I got a really good rate for me. I would hope so. Yeah, that's a great rate. $194 million, yeah. Let's double click on the tax perks, indexed universal life policies. The cash value grows tax-free, right? So people are like, cool, tax-free retirement income. Woo! Party. But not so fast, right? Because it's loan value. It's not even cash value. It's like it's coming out as a loan. You're not taking this money and just enjoying it. That's a great question. So it actually grows tax-deferred, okay? So it's nothing special. It's how you take the money out of the cash value is going to determine whether it's taxed or tax-free. So they like to say, oh, yeah, I get to access it tax free via loans. Well, all loans are tax free. I can take a securities back line of credit against my brokerage account tax free. Like there's nothing special. There's not a unique benefit to that. All loans are tax free. It's just the problem is you limited your growth in that policy fees. And here's something that nobody wants to talk about. Going back to those cap rates, they start you off at 10. after like year four five six they lower that cap from 10 to like eight to seven to six i have iuls 10 12 13 years in force when they when i got them cap rates of like four percent so they start off like at 12 13 every year so they just suppress how much you can actually make in your policy which is going to hurt the growth long range like you'll never win in these products and then you got to take it out at 5%. That's the loan rate, 5%, 6%, just depending, which causes that policy to lapse because the fees and that interest compounds against you. Explain that part because I think people are like, well, 5% is a good interest rate. If I went to a bank and I took out a loan, maybe it would be 8%. Sure. Yeah. In reality, it sounds good, right? Yeah, that's awesome. But then when you go to the bank, all you're paying is 5%. That's it. IUL, you're paying 5% plus cost of insurance, all of the fees. Because you're still paying into that policy. So you're paying the 5% plus you're paying the fees. And then when you withdraw from the cash value as a loan, that also brings down the death benefit, right? It does. Yes. Yes, it does. So explain that. So you have these two buckets, cash value and death benefit. So I need to draw on my cash value of what I put in and I'm taking it out at 5% and then I still pay my premium at a thousand bucks. What happens when I take that money out? Well, that's if you plan on paying your premium to the day you die. I mean, most people are sold this as a retirement. So you only make X amount of premiums till 60, 65. So, and you stop. So just because you stopped putting premiums in doesn't mean the cost went away because these costs never go away like the cost of insurance will be there forever so even if you stopped paying the costs are coming out of the cash value so not only are you drawing money out via loan at five percent then you still have the fees and the cost of insurance coming out of that so it's like two things coming out of this cash value so how these insurance salesmen pitch this is they illustrate a very linear seven percent that's just not how the market works right you get one down here it throws off the entire illustration. But they're illustrating 6%, 7% for 40 years. I'm like, buddy, I can't even do that. The S&P can't even do that. So then you start drawing money out at 5% and you have no more premiums going in. So you have all the fees and the loan interest rate attacking just draining the cash surrender value What happens is when that goes to zero your policy lapses and nobody wants to talk about that And that happens Then the entire policy becomes taxable If your policy usually every company is different but usually it about 75 So people start taking income at 60, 65. If they overloan their policy and it lapses before 75 years old, everything that they put after cost base and loans and all that becomes taxable. So they have a fat tax bill, ordinary income tax. Long-term capital gains. On what? So can you give me an example? Yeah. So let's say you put in $100,000 of your own money. Well, that would be cost basis. That's not taxable. Okay. But you've taken out $400,000 in loans. That would be taxable. Yeah. It's bad. Okay. So then what happens is there's like this rider, right? These insurance guys are smooth. They always, well, we could do this. Like it's called an overloan protection rider, or if you overloan your policy too much. but you can only activate it after 75. Well, you pretty much surrender your life insurance and you can't take any more tax-free income because you just overloan the policy. So let's talk to the haters who are saying the people you're dealing with just bought a bad product. The product itself is not bad. It's just their particular case. So, you know, some will say that the good ones have high early cash value, low death benefit, which is counterintuitive, downside protection, non-MEC, which if you can explain is modified endowment contract. You might owe income tax or 10% penalty if you make withdrawals before 59. So you want the non-MEC, right? There's so many acronyms here in a well-structured policy. And if you're super wealthy, by the way, this could work out for you. Yeah. Yeah. I mean, there are use cases for permanent and i say permanent life insurance not whole life or anything i i can name couple estate taxes would be a great way for permanent life insurance eyelets right irrevocable life insurance trust would make a long-term care would be a very very good uh reason for permanent life insurance maybe children with special needs i can probably vouch for that as we look at that okay how many people have an estate tax issue how many people right long-term care like But these are very niche situations where nobody, we're talking 5%, 10%. So the other 90% don't need this stuff. They need term insurance. Invest in market-based accounts. For sure. So if the policy lapses, people lose everything that they put in. Yeah, everything. So if they were sold a policy that they felt like, which by the way, I have so much empathy for these people because they feel like they're doing the right thing for themselves and their families, right? And if they can't pay the premium, then everything that they put into that goes away. It's not like you miss one payment. There's grace periods and stuff like that. They'll start deducting it from your cash value to try to pay the premiums. There's something called like an automatic premium loan where if you miss a payment, they'll automatically take a loan from your cash value to pay the premiums. But my thing is just do a brokerage account. And if you can't make the payment there, it's not like your brokerage is going to lapse on you. It's not like your Roth IRA is going to lapse on you to continue to grow even if you stop putting money in. Stick with term. This is even more the reason why you need term insurance and invest in market-based accounts because you have more control, more flexibility versus these products right here. You miss a couple of payments, you're screwed. So why is term more appropriate? Because it's the most affordable economically. Like you're going to get the coverage you need. And heaven forbid something happens to you, we have $500,000, $5 million of coverage. It protects what you need right now. And it frees up cash flow so that you can get debt-free. A lot of people are in heavy consumer debt that I don't think you should be really investing heavily if you have 20% credit cards. We've got to knock that out. Let's get some – they're just fundamentals that need to happen first. And buying one of those products prevents you from knocking out the credit card debt because it's an expensive product. Well, the reason that my family has term insurance is because we just want the insurance. Like if God forbid something happens to me or my husband, we want our daughter to have, you know, our potential earning power. Right. And that's it. And we have investments separately and we don't mix that. Don't ever make, don't ever commingle that stuff. Insurance, insurance, investing, investing. Believe it or not, you have total control. Nobody wants to buy life insurance. but everybody wants to invest money. They want to sound like a financial advisor. They want to sound someone important. They want to sound like a guru. They want to sound like they know what they're talking about money. They want to have something like this. This is awesome, by the way. I love this studio again. Thank you. But they want to – they don't even write books on this stuff. The agents. The agents. Secret of the wealthy. So are they complicit in this? They're getting sued left and right, and they continue to do it. Because the errors and omissions will take care of it. The insurance carriers, they don't care. A little slap on the handle and do it again, bring us more business. Because they're billion-dollar corporations. They can't do anything. Like me getting refunds, like I got a million and five. The insurance carriers last year issued like a billion dollars worth of new business just last year. What about the year prior? I'm not even scratching the scratch of the scratch of the scratch. Like this is pennies for these guys. They're going to continue to do it. They'll continue to build another football stadium with an insurance company name on it. They're not going anywhere. Who's the worst insurer? I wouldn't say there's a worse insurance carrier. I would say they tend to allow things more than others. They turn to look the other way. You know the crazy part, Nicole, is that that exact company has probably a very great term product available. Well, that's the thing that gets missed, I think, in your call. So like, you know, I was writing down all the numbers. She paid $49K. There's $25K. Surrender, 5% loan, which is not a bad interest rate. It's not. And if, God forbid, something happened to her, how much would she get? How much would her daughter and her husband get? Because the death benefit is real. The death benefit is real. They both have $700,000 of life insurance. So they both have a $700,000 death benefit. So if anything happened to them, 700 grand gets paid out. And that's still there. It's still there. Yeah, that's still there until it lapses, like you heard, because it's going to get more expensive every year. So they paid essentially $100,000 to get 700 grand where they could have paid, it would have been a fraction. Their policies with me are like $150 a month total. So like $75 each. And they're spending $2,000 right now. For the same company. So $700 for each. person so 1.4 million that's correct yeah for their death benefit so if something happened to bolt them together their family gets 1.4 million but at this policy too they would still get that they're just correct spending a ton 10 times more that's correct 100 so the the life insurance is real don't get me wrong if something happens they're taken care of so that's why i never cancel the policy without getting a term in place first they have a mortgage they have a business They have kids and all that. So a term goes up, though, as you get older, too. So at the end of her, I think we did a 30 year. I can't remember. It will. But the whole idea is you've got 30 years to get your stuff together to grow some real assets. And then what does it go up to? It just depends on their age, right, of when they. So she mentioned 1985, I think. Yeah, she's my. So that's 40. So 70 when this thing expires, right? Yeah. If she needed a little bit more insurance, she probably would have needed $700,000 because her assets would have been more than that. And her daughter is older. Older, whatever. So then she could probably requalify for another policy maybe at $100,000 because if something happens, she leaves a little life insurance plus all the assets she's been building, step-of-cost basis, all that stuff. And what should people look out for when they're being sold these policies? That life insurance is not an investment or a retirement plan. if somebody's trying to sell you on a get rich quick never lose money run and to be clear you're not getting a portion of that refund zero i get that 96 or whatever those totals equals 100 hers now i do take starbucks right i'm joking i take that like my whole thing is let's create the awareness like i just want more people to invest i mean you're putting real time in no but you know people are buying with you so you're making some commission but you're putting a lot more time i get paid on the commission on the term insurance so i'm not pro bono 100 but yeah i could totally charge to get that like they're more than happy like dude i might i'd rather pay a thousand dollars to get the 96 grand back opposed to just only getting 50 grand back but you're a good person Yeah, I have morals. That's a good thing, right? I think we can still go make a couple hundred thousand dollars per year doing the right thing, putting people first. I think we can all do that because I could totally be making a million dollars selling that crap. I couldn't imagine that. Is there recourse? You're only one man, so you can only do so many calls like this. Are there other resources or is there other recourse that people have? Yeah, there's lawyers now that they've, their whole practice is IULs, like suing IULs. So you just type in IUL litigators or IUL lawyers. They take. They do charge though, but they're effective and they'll go do that, but they won't talk to somebody who has only put in $4,000 because that costs money. So that's where kind of someone like me steps in. It's like, I'll take it. Yeah, it's like any personal injury contingency type lawyer who's going to go after it. Yeah, there's lawyers now that this is all they do. What are some of the questions that somebody should ask if they're talking to somebody who's trying to sell them a life insurance product? Yeah, somebody's trying to sell you. The questions I would ask is, is this a term policy or is it permanent life insurance? Ask them what your commission is. Because as an investment advisor, you should ask them that too. They have to disclose what their fees are. Ask them, how much are the fees? Can you shop around for me? Are you a captive agent? Like, give me five different term quotes. Give me five. Like, I need to know what are all the fees. Be very transparent with that. Oh, so in this case, they didn't get different carriers. They only got one? I don't know that agent, what he did specifically to shop that around. But it sounds like, because every insurance carrier is going to have. um like preferred agents there you go like they they they and how they do that is the compensation is higher so there's always going to be i'd rather go through yeah a you know this particular company because i might get 10 more on a commission here those are questions i would be asking they're going to be let down you're you're going to see a very different insurance agent after like 10 minutes oh really oh you get educated why are you asking see the biggest threat to an insurance agent is an educated consumer big time because you can't fool them. So they hate me. And they're pretty soon they're going to be in your comments. They're going to hate me too. Come for me. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make. you