Transcript of Caught on Tape: A $100K Insurance Shock Uncovered

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It's time for some money rehab. I'm 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 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 hole and indexed universal life. The second one, indexed universal life, is what we're focused on with Jonathan today. Today, I talk 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 Ryan 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 DM's. 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? I have a thousand questions for you, but somebody must have hurt you.

It was actually a client that I helping. I couldn't get a hold of her policy because she was busy working. This is what happened. I never replace any life insurance without doing a full breakdown of a policy. She was like, Jonathan, can you just call the insurance company for me? I I called, and then I just started asking questions and I didn't record anything. And that's where the light bulb went. I'm like, he's literally telling me everything. What you guys hear is 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 was, Yeah. I'm on lunch break. So we called, recorded everything, and I posted it on TikTok and didn't think anything of it. And then I woke up the next day, I had a million views. And then what the heck happened? So then DM, 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 It's Universal Life and how it's 10 times more expensive than term insurance. I'll give you a perfect example. My aunt, she's one of those know-it-all aunts. I don't know if you could relate to that. It's a good thing. I see you got scammed. I'm glad, but now I get to fix it. Because I look like the hero. She had a policy, a whole life policy, and she was paying $900 a month for it. Then with us, switching it to a term policy was $100 or something like that. This was back then. 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 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. You focus on universal life insurance, whole life insurance. Correct. What's the difference?

They're very similar and very different. I know that sounds weird, They're similar as far as they both build this cash accumulation account called CashValium. The difference between an IUL, Index Universal Life, versus a whole life is that whole life has guarantees in it, and those guarantees are like 2 43% growth. You'll never lose in that, but you do because inflation is about that. People like this whole, Oh, I can never lose money in a whole life. It's contractually guaranteed. 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 loss is, 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 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, 2,000 of it for the year went to fees and cost of insurance to pay for the life because it's life insurance, foremost. The other 10 grand is going to this cash value component. 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 sure if you're familiar with that. Against the S&P 500, and then whatever that does, it gets credited to the cash value. You got these cap rates of, let's say you're in the S&P 500, the cap rate is 10%. The biggest challenge, though, is that it's tracking the index, not the total return. 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. 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, right?

So that's like their talking point. It's like if the When your S&P 500 does negative 20 or zero or worse, while 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. Then from that, you get capped at a certain percentage. 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 grand into their policy, that's what they're going to have. But they're in reality going to have a lot less. Why is there There's such confusion there?

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. What they're referring to is how much life insurance versus how much you actually paid towards a policy. 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. They're like, Yeah, that's way too much. My term policy cost me like $30.

Yeah, totally. My husband and I have term, just to be clear. Good. Awesome. Can we do one of these calls together? Yeah.

Let's see if she's available now. Hello. Ms. How are you? Good. How are you? Unbelievable. Okay. Do you have about 10 minutes, 15 minutes right now to call your company?

Yeah. I have my husband here with me as well.

What I want you to do is I want you to 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 death, press under an Accelerated benefits writer, disability, or long-term care. For assistance with a life product, please press one. For assistance with a withdrawal, press one. Thank you for calling me. My name is Helen. How can I assist you 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. Hi.

So really quick, thank you so much for taking my call. What life insurance policy does she have?

This is an IUL policy, a permanent type of policy.

Okay. And what is her monthly payment?

Monthly For the sleep payment, it is set to be $1,000.

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 she had 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. Out of the 49,000, only 25,000 is available. Were you aware of that?

No.

Okay. All right. Now, let's just say she takes out a loan. Does she have to pay that back with interest or is it her money? How does that work?

For a loan, since we are using the cash value as a collateral, that's the reason why there's a loan interest is being billed once a year, and that is every policy anniversary year, so that they can be able to use that moving forward once to pay it back. 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 collateral. However, it is an irreversible type of transaction that once you submit that request, it will be automatically be removed on your cash value as well as on your coverage. You don't need to pay it back, but you cannot access that account anymore.

Perfect. 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 a thousand bucks a month. How much is going towards cost of insurance and fees? 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 anything to have a calculation on that. Those The information is actually being reflected in the animal statements that is being sent out every... As I can see here, the last animal 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 a table of the policy transaction statement that will show the expenses, the cost of insurance, and interest being credited.

So are you able to pull up Can you give us 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. Based on that, it shows this is from August of 2024 to July 22nd, 2025. The total premium expense charge is The total accumulated value charge is $117. 13. The total cost of insurance charge is $236. 06. And the total admin fees or other charges is $2,028.

That's annually, right?

Yes, that's an annual.

She's put in 12 grand 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, 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. 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 the actual cost of the insurance works.

The cost of insurance definitely increase every year since… Cost of insurance or cost of insurance is even increasing as the insured ages. So that's the reason why it keep on increasing yearly since insured is actually aging. Because that will be a higher risk on being insured now as to how it is being calculated. It's actually being 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, okay. So now my question is, if the cost The cost of insurance is getting more expensive, 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 it's been that same thousand bucks a month since you had the policy?

No, I always paid the same amount.

Okay, perfect. So you never increased it then, right? It's always been the same. Let me just say you kept this policy, you were going to continue to pay the exact same dollar amount for 10, 20, forever, right? Mm-hmm. Okay. 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 comes in. If by any chance that the premium that we are receiving is 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. No worries. Okay, perfect. My last question to you is, what 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 lap status or in a penny lap. 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 point, 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, what I say.

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 at $98,000 or $96,000 in total, how much surrender value does he The net surrender value is $26,159.

76.

Perfect.

Okay. That's after we deducted the surrender penalty already.

All right. Thank you so much. We'll call back and see what we want to do with the policy, if we want to put more money into it. You've been amazing, by the way. So thank you so much. I appreciate your time.

You're welcome. Thank you for calling me and have a great friend of you. Okay?

Okay. Are you there? Yes. Okay. That was brutal. Let me finalize this. I'll call you after because 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've 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 needed, 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 earn would be enough to cover the costs. But at the rate that we are going, we're 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 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.

I forgot about that. And that is what he promises to everyone in his social media.

What do you mean on his social media?

He has a Instagram account where he posts videos in a daily basis, and that's what he promised. 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's a way to do that. You can earn $4,000 a month. He has a lot of videos in his social media where he promises that. 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. He promised that we would have the live features with benefit in life if we ever had an accident or if we discover some 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's. We work hard.

We work hard every day. My husband wakes up at 4: 00 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 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't the right policy for you?

It was a couple months ago. A A friend of mine, she started working there with them because they are a big group of people, and they are every day doing paid ads to recruit more people because they are a 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 if this These people make this lot of money with the sales, something's wrong. Somebody's losing money. So she went inside the company and she bought some courses. She went to reach to another person who worked with the 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.

She figured out that what they do is 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 cancelation 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.

We had some investments in our country, and my husband told him, No, this is not making sense for us anymore because this is not growing at the rate you said. So we're going to just stick with the $1,000 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 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? 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%? And he said, Of course. And I I told him, Yeah, the papers show that it's zero %. 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. He tried to convince my husband that even though we lost this much money, it was good. We should be thankful. My husband I told him, No, this is not making any sense because the investments I have, I earn something around 10%. He was like, No. He was trying to convince us any way he could that losing this money, it's good. We are on the right way. 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 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 argument But unfortunately, we didn't record this call with him.

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... It was just random. But one of the Jonathan reels appeared to my husband on Instagram, and he sent it to me and said, Hey, reach out to this guy. I think you can help us. And that was 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? What's the end game goal here?

The only thing I don't want 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 hope that you get all your money back, and I'm so sorry that this happened.

Thank you so much.

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, too. Thank you for letting us listen to it. It really helps paint the full picture of what's going on here because 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. As an immigrant, she wants to do it right by her family and her daughter. Of course, she just wants to do the right thing, and she was lied to.

That's the rawest of the raw, the raw.

It sounds... I mean, it's like the same script. There's somebody that's 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. 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. I didn't even talk about this. They're They're targeting people that are immigrants because they're saying, Because you aren't a citizen, you can't get a Ratha, which is a total lie. Yeah, it's a lie. It's a total... So they're praying. It's outrageous.

If you don't have kids, do you need life insurance?

If the answer is 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 $4 million term policy, and I pay about $192. So I pay $192. A month. $4 million. 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. I'm not vegan, but they probably like, Hey, you figured out you fit the profile. So I got a really good rate for me. I would hope so. Yeah, that's a great rate, $192. $4 million.

Let's double click on the tax perks, indexed universal life policies. The Cash value grows tax-free. People are like, Cool, tax-free retirement income. Party. But not so fast, 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.

Perfect. That's a great question. It actually grows tax-deferred. It's nothing special. It's how you take the money out of the cash value is going to 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 backline of credit against my brokerage account tax-free. 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 year 4, 5, 6, they lower that cap from 10 to 8 to 7 to 6. I have IULs 10, 12, 13 years in force when I got them, cap rates of 4%. So they start off 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. 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 That's how the 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. In reality, it sounds good. Yeah, that's awesome. But then when you go to the bank, all you're paying is 5%. That's it. Are you paying 5% plus cost of insurance, all the fees?

Because you're still paying into that policy. You're paying the 5% plus you're paying the fees. Then when you withdraw from the cash value as a loan, that also brings down the death benefit, right?

It does. Yes, it does.

Explain that. You have these two buckets, cash value and death benefit. 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 till the day you die, most people are sold this as a retirement, so you only make X amount of premiums till 60, 65, and you stop. So just because you stop putting premiums in doesn't mean the cost went away because these costs never go away. The cost of insurance will be there forever.

So even if you stopped paying, the costs are coming out of the cash value. Cash value.

So not only are you drawing money out via loan at 5%, then you still have the fees and the cost of insurance coming out of that. It was like two things coming out of this cash value. So how these insurance salesmen pitch this is they illustrate a very linear 7%. That's just not how the market works. You get one down, your throw's 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. Then you start drawing money out at 5%, and you have no more premiums going in. 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 then what happens?

Then the entire policy becomes taxable. If your policy Every company is different, but usually it's 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, no long term capital gains.

On what? So can you give me an example?

Yeah. So let's say you put in 100 grand of your own money without big cost basis. That's not taxable. But you've taken out 400 $100,000 in loans, that would be taxable. Yeah, it's bad. Okay. Then what happens is there's this writer. These insurance guys are smooth. They always, Well, we could do this. It's called an Overloan Protection writer I don't care 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.

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 some will say that the good ones have high early cash value, low death benefit, which is counterintuitive, downside protection on 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, there's so many acronyms here in a well-structured policy. If you're super wealthy, by the way, this could work out for you. Yeah.

There are use cases for permanent... I say permanent life insurance, not whole life or anything. I can name a couple. Estate taxes would be a great way for permanent life insurance. Ilit, Every Book of Life Insurance Trust, long-term care would be a very good 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 long-term care? These are very niche situations where 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 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. 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 terms. 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.

Why is term more appropriate?

Because it's the most affordable economically. You're going to get the coverage you need. Heaven forbid, something happens to you, we have 500 grand, $5 million of coverage, protects what you need right now. 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 got to knock that out. Let's get some... They're just fundamentals that need to happen first. 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. If, God forbid, something happens to me or We want our husband. We want our daughter to have our potential earning power. That's it. We have investments separately, and we don't mix them.

Don't ever mix. Don't ever commingle that. Insurance, insurance. Investing, investing. Leave it at that. 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 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 hand will do it again. Bring us more business. Because they're billion-dollar corporations. They're not doing anything. Me getting No refunds? I got a million five. The insurance carriers last year issued 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. This is pennies for these guys. They're going They'll 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 worst 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. 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. If, God forbid, something happened to her, how much would she get? How much would daughter and her husband get? Because the death benefit is real.

The death benefit is real. They both have 700 grand of life insurance. So they both have a 700,000-dollar 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 fracture. Their policies with me are like 150 a month total. So $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.

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 spending a ton more.

Ten times more. That's correct. 100%. So 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.

At the end of her, I think we did a 30. I can't remember. It will. But the whole idea is you got 30 years to get your stuff together to grow some real assets.

Then what does it go up to?

It just depends on their age, of when they She mentioned 1985, I think.

Yeah, she might.

That's 40, so 70 when this thing expires, right? If she needed a little bit more insurance, she probably wouldn't need 700 grand because her assets would have been more than that.

And her daughter is older.

Older, whatever. So then she could probably re qualify 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-up cost basis, all that stuff.

What What do 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. I'm joking. My whole thing is, let's create the awareness Yes. I just want more people to invest.

I mean, you're putting real time in, but people are buying with you. So you're making some commission, but you're putting a lot more time than that commission.

I get paid on the commission on the term insurance. I'm not pro bono 100%. But yeah, I could totally charge to get that. They're more than happy. It's like, Dude, I'd rather pay $1,000 to get the 96 grand back, opposed to just only getting 50 grand back.

But you're a good person.

Yeah, I have more. That's a good thing, right? I think we can still go make a couple of $100,000 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 I can imagine in 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 Their whole practice is IULs, like suing IULs. 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. That's where someone like me steps in. I was like, I'll take it.

Yeah, it's like any personal injury contingency type lawyer who's going to go after it?

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 a... The questions I would ask is, is this Is it 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? Give me five different term quotes. I need to know, What are all the fees? Be very transparent with that.

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-Preferred agents? There you go. How they do that is the compensation is higher. There's always going to I'd rather go through 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 going to see a very different insurance agent after 10 minutes. Oh, really? Why are you asking? See, the biggest threat to an insurance agent is an educated consumer.

Big time.

Because you can't fool them. That's why they hate me. And pretty soon, they're going to be in your comments after.

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 Lavoy.

Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your moneyquestions, moneyrehab@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 Money News and TikTok at Money News Network 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.