How People Get "Ripped Off" With Whole Life Insurance In Canada

We have people that come to us and they say, well you know, I got sold this product and that's it. Like I can't even get a hold of the person that sold it anymore. So I always encourage people to look into those details, like what happens if for say, Dan checked out of life, how would I be supported? Make sure there's a team of people that can take on and carry on.

Have you ever wondered how people get ripped off with whole life insurance? So we thought we'd have a little conversation back and forth about how you could get ripped off by using whole life insurance. So welcome and I'm here with my colleague Liz Lamont. And I'm Dan and we're both infinite banking practitioners. And you can look us up on the Nelson Nash Institute Practitioner finder. So with that we also both work for Ascended Financial. So let's just talk about the four ways that you can get ripped off with whole life insurance. So Liz, what would be number one on your list?

I think one of the most important parts is to make sure that you focus on understanding and educating yourself about anything that you're looking at purchasing. So, so that also applies to whole life insurance. So having an understanding, at least a cursory understanding of how does this product work and what is the best kind of permanent insurance for my situation. So that education is really the first point. An example would be sometimes people get insurance to quickly solve a problem. So mortgage insurance might be an example of that. And there's not necessarily an understanding of how that product actually works or what the fine print means. So understanding the importance that there are different types of insurance available and knowing what the parameters and boundaries around situations that those insurance products will work and the places that they won't is really important part of that education process.

Anything that you do financially in your life, I think it's really important that you take the time to educate yourself. If you're going to invest in something, whether it be real estate or whatever it may be, it's, it could be crypto, you better take the time to educate yourself. And it's no different with whole life insurance. Take the time to educate yourself.

There are a lot of people out there selling different products and these products are often attached to other things. So it's really important to vet the person that you're going to take advice from. So that could be even somebody that you have an established relationship with that's helping you with a different kind of product still going through that vetting process because they may not be the best Fit for when you're considering whole life insurance. So they may have really great intentions of helping you out, but they may also not have the understanding that you need for the product that you're looking and what you're looking to achieve. So Dan, have you ever experienced somebody coming to you with a product that didn't exactly meet what they thought it was going to meet because the person that they worked with just didn't really quite understand what they were looking for?

Yeah, I've definitely had that happen a multitude of times, Liz. And it's what you find out is quite often, you know, if you, you know, let's think of it from a different light. So if you have a very particular medical need and you go to a general practitioner, that general practitioner may or may not be able to help you, but a specialist that's really able to focus on whatever that anomaly is that you have is much better off to suit you and to, you know, give you the results you want. And that's the same when you think about products and when you think about whole life insurance. Make sure you go to a specialist because a generalist, yes, they can have the best of intentions, but a lot of times they just don't know what they don't know. And the other thing that I always think is important is like ask them how are you using this particular product? Or why is this particular product the right one for me? So a big part of your conversation and really go back to your education should be why would this be the right fit for my objectives? Both myself and Liz have experienced. We have people that come to us and they say, well, you know, I got sold this product and that's it. Like I can't even get ahold of the person that sold it anymore. So I always encourage people to look into those details, like what happens if for say, Dan checked out of life? How would I be supported? Make sure there's a team of people that can take on and carry on with what Dan or Liz was doing if something happened. Because we have no lease on life, we don't know how long we're going to be around, but make sure you just set yourself up with a group that can really support you well and there's a way that they can carry on supporting you even if, God forbid, something happens to the person you're working with.

I want to circle back to something that you said which is really, really important and I think it was worth emphasizing is make sure you're working with somebody who is using the product that you Want to use yourself. Now why is that important? So I'm going to give an example based on real estate. So in real estate you can go to a real estate agent and they can sell you. So most people who they've, they've passed their exam, they can sell you a house. But if you're looking to buy it for a purpose of living in it versus as an investment, it's actually a very different set of criteria that you're looking for in that property. So a valuable member on your team is somebody who is actually also understands the difference in criteria of buying a piece of rental real estate versus a home purchase. So working with somebody who specializes in rental real estate as a realtor is just going to make a huge difference to your progress with your portfolio versus somebody who is just helping people buy their first home. Both of them are doing a great job. It's just understanding that the focus needs to be wherever you're at with your investing journey. It's exactly the same with a whole life insurance product is that you need to make sure the person that you're working with is using the kind of product in the way that you intend to use it so that you know that they have a really thorough understanding, not just theoretically, but practically about how to use this product day to day and to meet your investing goals as well.

And the third point that we wanted to bring up was product. And really what we're going to talk about there is make sure you get the product that's going to suit you and help you meet your objectives. So there's a multitude of products out there when it comes to permanent whole life and they all have a purpose. But let's make sure you understand what that purpose is and how they work. So for example, there's a product out there where a portion of your premium goes into a side fund. And if all things go well and that side fund performs really well, that product is a product that can obtain the objectives that you set out hoping it was going to do it the first. But if your side fund doesn't do as well as you hoped, well then you can lose value in your a product that you're actually putting your capital into. So I really encourage you to make sure the product, because there's lots of them out there, aligns with your objective. Understand the why. Why is this the right product for me with that, what would be number four on our list process.

So what we teach people is that using whole life insurance is a process of claiming back control of your financial future. So we use it with clients, we use it ourselves as a process. So having somebody who can coach you on how to follow through with that process is really important. So it goes back to point number two about vetting the person that you're working with, but also understanding that this is not a one and done. It's not, I bought a product, great, I'm finished with this. It's understanding that to really maximize and not get ripped off by the use of whole life insurance, it's a process that you will need to learn and to understand how to use it. The most effectively will be ongoing education, working with a coach who understands how to coach you on how to use this process and continuing to grow your knowledge of the product and most importantly, how you can use it in conjunction with everything else that you're doing in your investing.

We've had experience where we've started to work with people and they don't even realize what they've got at their fingertips. They've got a great asset and it's got all kinds of value in it, but they don't understand the living benefits that you can get with whole life insurance. And so they haven't even put it into practice. So they're missing out on an opportunity in life. And we only get so many opportunities and we're always about, let's maximize those opportunities. So it really becomes very important to get a coach, someone that's going to stay with you, not going to just sell you the product and then step away. So good point, Liz. And I hope you all find this informative and just something to make you think about, hey, what are those things I should consider and how could I get ripped off with whole life? And we just love it too if you'd put comments that you or experiences that you've had in the comments below. We just love to hear from people and we just encourage you to do that. And again, if you have any questions, put them there. That would be a great way to interact with with us if you haven't already done so, to subscribe to our YouTube channel. And that is the Banker's Vault.