so why do life insurance agents often have a bad reputation or the industry when it comes to
any type of cash value life insurance whole life universal whatever a lot of times a bad reputation
exists and sometimes it's individuals and other industries and insurance agents they fight with
each other sometimes it's a dissatisfied consumer could be a number of reasons but as a whole a lot
of times you'll see the negativity outweighs the positivity let's go through some reasons
why and here we go so when I take out a cash value life insurance policy the first thing
that could results like the end result be a bad reputation for an agent which would also this
is going to lead to a dissatisfied consumer is poor performance meaning poor policy performance
we project one thing via illustration and illustrations always change they never match
exactly what they say they're going to do could be higher lower but you'll see this to be the case in
almost every scenario with Universal Life when you look at the actual results we've never seen
one policy deliver attractive returns that's been a case where they frequently under deliver and
then poorly designed whole life will do the same thing if we design a policy with a high insurance
expense and nothing going into PUA's you're gonna see the same thing very low yields takes
a long time to break even to get your money back it's not attractive now the other reason and I've
seen this firsthand is poor design so I'll share a story to validate this point when I was new in the
industry I was about 23 years old getting into the sales side this is before I started to transition
into designing policies for individuals and corporations I was in an office where the owner of
this office and another agent had a prospect they used Nelson Nash's book becoming your own banker
as the marketing tool the prospect read the book was interested walked into the office and threw
in the table said I want to put a hundred thousand dollars a year into this policy I'm 23 I hear the
story I'm like wow that's that's cool like why is he putting that much into life insurance because I
was new I didn't know a whole lot so he's putting a hundred thousand a year in and remember he read
the book and that book models high cash value right we can use the policy for the concept and it
touches on how to design policies properly as well now we talk about policy design all the time when
I set up a policy if I'm gonna put $1.00 in where can my money go towards the insurance premium that
buys me death benefit first and then he eventually built cash usually beginning the third year and
then the PUA rider which if I deposit funds they show up in cash value for the most part and then I
get some death benefit as well but when we design policies just like what we do when we work with
a corporation or a bank they are interested in how to inflate their balance sheets as much as
possible to maximize the cash value the monetary value money they can use today in the near future
and long term but the cash value is what the policyholder has access to so back to the story
the individual read the book by Nash the guy was a physician wanted to start with 100k a year money
can go away towards premium or cash these agents and this is going to validate my a bad reputation
exists had that full $100,000 go towards the premium piece of the policy the base premium
and the verbage they used to sell him on this was well first you need to capitalize the policy to
make it work for the banking concept now if we look at this point if I put that much into pure
premium no term writer attached at his age his MEC limit may have been a hundred eighty thousand so
he's got some room for PUAs the thing was when he had more money to pay in the agents recommended he
opened up another policy with guess what pure premium so it was a case where the marketing
initiative was used with a great concept something that works people are attracted to
it because it works but then what was ultimately sold was a different set up was a hundred percent
premium was a life insurance policy and it's going to take the guy 12 years to break even
thanks a long time so that will certainly result in a bad reputation and what it is
is if I'm that consumer I buy a policy and if I should say when I find out that it was set up
poorly really just for a high commission because that's what happened there he was interested in
the infinite banking concept and he was sold a basic life insurance policy what he eventually
finds out what's going to happen he's gonna be upset that's her buyer's remorse comes in if I
would have known I could have done it differently I would have done so but I wasn't taught when I
first opened the policy now he's got to restart maybe he can salvage some of some of it but he
does lose time so important to be aware of that or really this is what can cause a bad reputation in
the industry so really if I'm a consumer and I'm interested I'm doing my homework I'm thinking into
the concept and I want to take out a cash value life-insurance policy I want to do my research
right we always talk about the four major mutual companies Mass Guardian New York Life Northwestern
Mutual and really the only reason we're so big on them is when we look at actual results right
so we've got poor performance up here when we look at actual cash value performance over time
we've seen those four consistently deliver among the highest cash values that's why I'm a fan of
them not to say other companies are bad because they're not I just haven't seen cash values on
par with the big four and then you've got policy design when you look at how corporations design
cash value life insurance policies and you see corporations and wealthy individuals have their
cash value holdings positioned as their number-one asset on their balance sheet a lot of times second
is real estate we see that and we think okay why do the people with the money have so much
money here in cash value life insurance there has to be a reason there is if it's properly
designed positioned with a quality company we see it produce safe liquid tax-free area I can
position money I can tax-free if I do everything right can design it to be flexible all of that
good stuff so I want to make sure the policy is designed how do i as an individual mimic what
the wealthy to mimic what big corporations do and really that's why we spend so much time on
the policy design right that whole 1090 split if I want to put a hundred K in and if I can go back
in time if I'm that consumer and I know wait a minute I can put a 100 K and only have 10,000
go towards that premium maybe I only commit to that and add the rest of my leisure to free it
more cash flow to build a more flexibility you can do that kind of stuff which is attractive it helps
me learn how I can use a life insurance policy as a flexible savings asset rather than a rigid
bill so why many have a bad reputation could be a number of reasons right poor performance or poor
design ones trying to upsell a high base premium a lot of times that's the case but to prevent that
from happening to make sure I as a consumer don't get caught up in a situation where I say wait a
minute I wish I would have known that and then I could have done something differently back then I
want to be educated on the policy design really how do I maximize the monetary value of a cash
value life-insurance policy or be aware of how to do so because if I can continue to maximize
that life insurance policy cash value and death benefit that's going to grow nicely as time passes
as well if I can do that everything else becomes easier practicing the the concept IBC I can borrow
and repay I've got more money in cash value to practice that concept if I want to pull income
from the policy down the road via retirement income stream I've got more money in the policy
short term and long term or now I can do that so really policy design in looking at quality
companies will make sure I'm in a position where I don't have buyer's remorse down the road and
then that company in agent I worked with hopefully does not have a bad reputation I hope this helps