Whole life insurance or infinite banking is a misleading investment “opportunity” that has been going around. The premiums are high with insurance agents trying to sell you complicated and fake promises. Just to make a commission from you, usually 100% of your annual premium. Don’t get tricked without knowing the truth.
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The Whole Life Insurance Scam: What Agents Don’t Tell You
Life insurance is a crucial financial tool for protecting your family’s future in the event of your passing. However, not all life insurance policies are equal, and it’s important to be aware of potential scams that could leave you and your loved ones in financial distress.
One such scam is the whole life insurance policy, which is often marketed as a great investment opportunity by insurance agents. While whole life insurance can provide some benefits, it’s important to understand the potential downsides that agents may not disclose.
First and foremost, whole life insurance is significantly more expensive than term life insurance. With whole life insurance, you are not only paying for the death benefit but also for the cash value that accumulates over time. This means that the premiums for whole life insurance can be up to ten times more expensive than term life insurance. This can be a huge drain on your finances, especially if you’re on a tight budget.
Furthermore, the returns on the cash value of a whole life insurance policy are often minimal. While agents may tout the tax-deferred growth of the cash value, the reality is that the returns are often lower than what you could achieve by investing the premium difference between whole and term life insurance in other investment vehicles.
Another issue with whole life insurance is the lack of flexibility. With a whole life policy, you are locked into paying premiums for the rest of your life, regardless of your financial situation. If you miss a payment, the cash value of the policy may be used to cover the premium, reducing the death benefit for your loved ones.
Moreover, whole life insurance commissions are typically higher for agents, incentivizing them to sell these policies over term life insurance, which may be more suitable for your needs.
So, what can you do to avoid falling victim to the whole life insurance scam?
First, be wary of agents who push whole life insurance policies without fully explaining the differences between whole and term life insurance. Make sure to do your own research and understand the pros and cons of each type of policy before making a decision.
Second, consider consulting with a fee-only financial advisor who can provide unbiased advice on the best life insurance policy for your specific needs. This can help you avoid the pressure tactics used by commission-based insurance agents.
Finally, always read the fine print of any life insurance policy before signing on the dotted line. Make sure you understand the cost, benefits, and potential drawbacks before committing to a policy.
In conclusion, while whole life insurance can be a suitable option for some individuals, it’s important to be aware of the potential drawbacks and avoid falling victim to the whole life insurance scam. By being informed and proactive, you can ensure that you choose the best life insurance policy for your specific needs and protect your family’s financial future.
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I'm going to give you the benefit of doubt you just watched a bunch of ill-informed videos. As someone who sells both Whole Life and Term, when you design a policy for infinite banking( which is a marketing term), if done correctly, you are literally lowering your commission because you're mainly getting paid on the base. If the policy is designed for infinite banking it is at 10%- 40% base compared to a traditional Whole Life design where it is 100% base. On Whole life, the commission is generally between 55%-95%. I usually get between 90%-110% on Term with much less work. If someone is calling it an investment opportunity, they are wrong. Whole life is the vehicle, not the investment. Understand that when you leverage cash value to invest in real estate for example, you are putting your money to work in two places simultaneously. And because your money is working in two places at one time, you are earning a higher combined rate of return. Is it a retirement vehicle? No people use it to help fill the gaps in their retirement strategy. Of course, the Whole life will be more expensive because it's guaranteed to pay out the term isn't. Who told you that you have to pay for the rest of your life? You can set one up with a single premium, 5 pay, 7pay etc…I don't have time to correct the other errors but there were more.
https://youtu.be/vR4qc77MKB8?si=QL99aGJOyQSRmQ37
You need to watch real authorized IBC
You are confusing the real IBC with scammers that sell whole Life Insurance
Great video! A few comments:
– Cash value life insurance can come in handy as an estate planning tool. For example if you live in a state like IL where the estate tax threshold is substantially lower than the federal level.
– I’d also recommend your viewers check out a textbook like “McGill’s Life Insurance, 11th edition.” It’s several hundred pages long, but goes into exhaustive detail about how these policies are capitalized by insurers, how risk and mortality tables are used to calculate premiums, and also how the net-present-value formulas work when you factor in commissions and other factors.
The surrender rate on term policy is pretty high too. The premium amount can be higher or lower its up to you.
Lol, I never understand why people don't at least talk to a relevant professional before giving their two cents on this topic. If whole life dividend is merely a refund then how could it ever have a positive return? Limited pay policies from top mutual insurers were giving closer to 5% tax free even when interest rate was near zero for the last 15 years, if rates don't go down to zero then dividends should go up. Whole life insurers give out same rate as HYSA for their MYGA now, and they do so because they can get higher rates elsewhere and then pass on the spread as dividend. It's essentially a corporate bond fund supplemented by institutional business profits.
Watch Chris Nogel, and check to see if you feel the same.