What Life Companies Don't Tell Canadians (A Rant)

But the problem is the life company that can't get a transaction right, can't really tell you when that problem is going to exist. And no one can give you a straight answer on how to warn you that when you go to reduce some of the term insurance at some future point when you're going to be in a taxable event scenario. Now you can run some illustrations to kind of get an idea. But the problem is.

So recently a video was sent to me and it's a Canadian individual who is a mortgage professional mortgage broker. We need those, those are great. He probably has a great business, but he's also licensed as an insurance advisor. And my interpretation, and I could be wrong, happy to be wrong, is that he is a, a mortgage broker, that's his primary business and a part time insurance person. And so that's cool, no problem there. And I, I believe, you know, as our friends James and Ryan would say on their, their podcast Banking with Life, that they have angelic intentions. And I, in other words, I believe that this person wants to help people and go out of his way to do that. But he's got a video talking about the right or the correct way or the only way to structure policy for the purposes of infinite banking. And it's about 10 minutes long and unfortunately you can't even get past the first minute without finding a bunch of holes in it. And I don't believe it's because the person's being intentionally deceiving of people. I think it's quite literally it's just a lack of knowledge and understanding and a lack of experience with the actual products themselves. And so what's interesting is, you know, he goes on to talk about, he uses some screen snips of a particular company, a green company, and he's using the first year cash values. Well, here's, here's the wrong way to do it. He shows a couple screenshots of the very first line of an illustration and then he says but. And then this is slightly better, and then this is slightly better. And then there's this one, it's obviously the best, but he goes through it so fast that you also can't see what's happening. You don't see how the death benefit is rising substantially and you don't know why it's happening. He doesn't mention about the other mechanics and he goes to talk about why this one has so much more cash value in the very first year and clearly it's better. But then he doesn't go on to say, oh, by the way this company doesn't allow you to take a policy loan in the first year. So it doesn't matter how much cash in there because he can't get access to any of it. Doesn't mention that. He doesn't mention that, that particular company, although I'm sure they have, they have a great product. I personally own one of those policies. I'm very familiar with it, so do you. And that they can't possibly get a transaction correct. Anytime that you send the money to do a paid up additions, can't apply it properly. Anytime you send money to a policy loan, they can't apply it properly. So you have to wait an extra one, two, three weeks, sometimes a month to get someone to actually apply the transaction you sent in the way that you, the policy owner told them you wanted it done. Meanwhile, you're receiving letters as a policy owner saying, hey, we got your money, here's what we did with it. Not what you asked. Because it's auto generated by a stupid computer system. And then you're frustrated because it's not working well. And if you're frustrated, it's not simple, it's not easy, it's not peaceful. And they have a weird loans process. They're inconsistent on actually getting people's policy loans to them. It takes. Sometimes it goes really fast, sometimes it's really long. I personally have experienced that myself. In fact, I'm ready to go do a transaction of about 26 grand I'm gonna fund into that particular policy this year. And I'm hesitant I'm going to do it, but I'm hesitant because I just know already after doing it enough times just how much of a pain in the butt it's going to be for me to get someone on the line and say, I sent you an email, I did it the way you want. I told you before I did it. What's going to happen. I sent the transaction. You're supposed to apply it to paid up additions. You've done it wrong, you've applied it to the loan or you put it some other place. I have to get. Yeah, my, myself or my assistant has to go in and get on the phone with somebody, make sure they do it correctly, then wait and follow up and follow up and follow up until it's done right. Yeah. And we have to hound them and hound them and finally you get someone in the company who knows it that you can rely on to get it done. Boom, they're promoted or they move on to somewhere else. And you have to train a New person, an administrator at that company. It is the most frustrating thing in this business that I have dealt with, bar none. And there's, there's more things I could go into. But that's, none of this is mentioned in the 10 minute video. And he's isolating this one company. By the way, it's not a mutual company. Now we always want to do business with mutual company but there's certain circumstances where people can't do that or it doesn't make sense. And for me I'm, I want to make sure that I have a policy with most companies because I want to know what the problems are. I'm putting myself in the testing phase before my clients have to go through it. There's nothing that I'm going to have a client go through that I wouldn't personally go through. You know what, I'm going to go on my rant a little bit more. There's another company recently, they launched a new power account. Good, great, great news. They've never ever had a dividend paying policy ever. They've launched a par account, they've launched a new whole life company because they see where the market's going, the market share, they want to get some of that business. So it's good news for us because if you have term insurance with them and you are uninsurable, there's an option for you. Now that wasn't there before. This is great, this is really great news. However, they don't have a loan form. No one's requested a loan. The things been, been available now for 18 months. They've got two products you can purchase. They don't have a loan form. They don't even know how to get a loan. They've been hounding their head office. No one knows how to take one. They don't even know what the interest rate is. They haven't declared an interest rate for loans because no one's taken a loan yet.

Crazy.

They, they, they funded the account. They seeded the account with I think $10 million of money from the parent company. Right in the illustration there's a, there's a paragraph that says by the way, when you know this company, the parent company reserves the right to take our seat capital out when, wherever we're ready. Basically once the, once this thing is growing enough. So in other words as soon as they get enough people in there paying money and the account gets large enough they can pull their $10 million back out. Well that's called dilution. So how is that going to impact future dividends and when are they going to do that? Nobody knows. Like there's all these unknowns that, that you. It looks good on paper, it looks good in an illustration. The illustrating tool is fantastic. But what's the actual reality of doing business with this company? Who do they support? What's their focus? Are they there for the policy owner? Can the policy owner get questions asked? Can they deal with someone? These are things that are far more important when you're in this process than what the fricking illustration says.

Yeah.

Do I have an online login where I can log in and see what I have available in loan and loan amount or loan outstanding, or what my paid up additions are or where I can go and access my in force illustrations? Do I have one of those? Well, guess what, there's only one company in the country that has that today that I'm aware of. The other ones don't have squat. They're in the freaking dark ages now. Are they going to create one? Probably. You know, modern technology and all. Like we've got, we've got freaking virtual worlds being created in the metaverse, for crying out loud. And insurance company still can't give you access to see your freaking insurance data. It's, it's absolutely insane. One company's got it figured out and they've, they're investing R and D to make it even better. Imagine that. Oh, hey, guess what? They're a mutual company. Great. Hey, guess what? They're primarily focused on their whole life insurance product. Wow.

Amazing.

Hey, they have a defined loans process. Isn't that great? It's like all the stackable things that we can do and people were like, no, no, this company over here is the best company to do it with. I'm sorry, that is inaccurate.

Oh, Rich, now you're getting me fired up. They just want to flip this table right over the companies that, that, that, that have been around for 100 plus years. And also to your point, did they, did they get into whole life when the market was really hot and get out when they decided, oh, we're paying too much out to policyholders or, or is that their game? If you're trying to make the NHL or, or go to play in the NFL, do you want to go and get like a personal trainer who is athletic and a fit guy and he trains people all across? You know, if you're fighting in the ufc, you're not going to go get a guy who, who trains football players and trains hockey players and does maybe they have a specific niche that they train those guys on. But my point is, you know, a guy who spends a couple hours a week holding pads, or do you want an actual fight coach or maybe a guy who's even got some experience in training fighters or somebody who's maybe even been in the octagon or the ring themselves? Like, you want somebody who, that's their game. You don't want somebody who kind of, oh, yeah, you know, oh, MMA is picking up. People are really busy. Well, let me go start training MMA fighters now because I'm with. Hockey's kind of cooling off or football's cooling off or whatever it is. That's kind of what some of these insurance companies do. There's a specific company that you're referring to, the Big Green Monster. They created this whole life tool because the market basically made them do it. They're like, oh, my gosh, there's like, look at, look at what's going on out there. We better get back in the market. They get in, they get out. They get in, they get out. So that's the point is there's certain companies that are like, this is their game. They understand what they're doing, they get it. They, and, and, and they're not like, going to switch tomorrow because something else is, it's the, what do you call it? It's the, the shiny object syndrome. No, they, they understand the game, they understand what they're doing. And that might be a company that you might, would, would rather consider doing business with.

I, I, I'm so glad you mentioned it, because that was on my, like, in my back of my mind. It was in the, the Rolodes of the things I wanted to rant on. And you, you took it there. So, so going back to the, the Big Green Monster or whatever, again, these aren't bad companies. These are great companies have products. I have a policy with many of these companies, Vern, you've got a policy with multiple companies. Our clients have policy with these companies. There's not, there's nothing wrong with doing business with them. What is inaccurate or incorrect is to make bold, ridiculously stupid statements that this is the only way to do something without having any understanding of a client's needs, objectives, insurability, what they want to accomplish, what they have to work with in capital, their need of immediate use of capital, and any of these other dynamics. And so going back to this, I'm going to say hats video who, I'm sure he's a nice guy and all, but unfortunately he is, he is, he's going to, he's going to bamboozle and he's going to interfere with the brains of people and they're going to get a crappy product that they don't understand and they could put themselves in a serious financial harm. And here's how. In order to manipulate the illustration with that particular company to create this extra cash capacity, you have to do something that could create a massive taxable event for the client. And if they're not educated and most clients don't remember what they're told 10 years ago, some do, some don't. I don't know, I can look back 10 years ago to things I was told probably by my parents that I don't remember. I'm no different than anyone else. I understand this though, because this is all that I do. Now this particular company, if you have a, a death benefit with a combination of whole life and some term insurance, you can, you can put a lever on it and you can manipulate the crap out of it. The problem is the life company that can't get a transaction right can't really tell you when that problem is going to exist. And no one can give you a straight answer on how to warn you that when you go to reduce some of the term insurance at some future point when you're going to be in a taxable event scenario. Now you can run some illustrations to kind of get an idea. But the problem is people don't know what they're going to do. So if I all sudden wake up one day and I phone the life company and say, hey, you know what, guys, I'm going to get rid of that term insurance I've got, I've already put too much money into my personal contract that I will have a taxable refund event on that contract today. Right now if I did that today on one that I own now, I know that that problem is there. I also know how to deal with that problem, how to mitigate that problem, how to handle it and the timing of those things. Most advisors have no earthly idea and they're certainly not explaining it to their clients. We keep hearing that because we're having people reach out to us, say, I've got one of these. Can you tell me what's wrong with it? I'm like, well, I can tell you some things. You might not like what I say, but I'm going to be honest with you. And so those potential taxable events are, can be so ridiculously damaging for people. They have no earthly idea it's going to happen. And advisors unfortunately also don't understand it's going to happen. And they're not educating their clients. It's not because they're trying to be bad people. They're not, they're, they're good hearted, they want to help, they believe they're doing the right thing. All the power to you for helping your client get insurance and doing the right thing. But you may be unintentionally misleading them because of what you don't know. It's what you don't know that's creating a big, big fat problem. And if you're not there to coach and educate them, which by the way, we're already hearing that there's a lot of people who have policies, they're not getting any coaching, they're not able to contact their advisor. Their advisor is not telling them about these things. They're telling them to go get a third party bank loan right away and all this other kind of stuff. And they're not really being educated on implementation and usage of the tool. And they're certainly not experiencing the transactional problems because they're not even funding the money into the policy. They're not doing loan repayments. They're not focused on understanding the importance of what Nelson taught us as fundamentals. Then talking about what you said, Vern, you said that this, you know, particular company, they left the participating insurance business for a good period of time, about 11 years. They had a PAR policy, PAR product, you could buy one new on their shelf. And then they just said, boom, closing the doors. Anyone that's got an existing one, you're good, you're fine, we're managing it, no problem. We're going to go and create a brand new product which is basically a mimic, it's a mirror image of par. But it's non par. But we're going to do all the same things as par, but it's not going to be par. Why would they do that? Well, because they're a stock company and they did it for the benefit of stockholders, not PAR owners, stockholders. And so they sold that product and sold that product. They made claims of what they were going to do. And a 10 year mark, they had some 10 year, kind of like get guarantees on some of the performance. And then at the end of the 10 year mark, interest rates were way lower and so boom, the performance dropped like a hot potato on that product. Imagine that. Never seen that happen before. And, and then right around that same time they said, oh, you know what, hey, PAR is doing pretty good. Let's go launch a new power product. So 11 years later, they bring par back to the mix. So they reopen their, their PAR block and they created a new product for it. Now, the product has some good features, it has some cool stuff to it. Company could use some work as far as how their administration operates. I've already stated that in my rant. But the product has some, has some features that can make it, you know, functional and viable or whatever. Here's the thing. Who is who, who is their master? Who are they jumping for? Who are they looking to support? They're looking to create profits for stockholders because they're a stock company. So their master is stockholders. They're chasing quarterly share profits. They want to make their, their quarterly announcements that look at how good we're doing as a company and our dividends we're paying for our stockholders, which means their master. They have the tale of two masters. Is it the PAR owners or the stockholders? Well, a company that was big on par leaves it entirely, sees the market trend and says, oh geez, we got to get back in that business and then jumps back in. You got to be a little suspicious about what's going on. So I've had conversations with people from that company, some of them that work in higher levels. And I know the reason why. In fact, I've had conversations with actuaries at that company. One of the reasons that they've reopened that PAR contract is because they didn't want to lose market share on all of their other list of products. If you sell group plans and critical illness and long term care and you know, blah, blah, blah, blah, blah, all these, this laundry list of other products, well now if you have that other product on the shelf, you get that business back. So if people were going to go do term conversions, they were going to do all these things. All that business that would now would start to go off the books. An advisor would take it to go sell it with other companies. Why would you just come to the one stop shop? We've got everything you need. Yeah, we've got par, we've got that, we've got this, we've got all of it. And so it's, it was them focused on retaining market share for the other products, not the PAR product that now creates profits for who Those other products create profits for stockholders, not for PAR owners. The PAR little segment is its own little bubble. And so it's only what happens in the PAR that stays in their PAR account. That is not the case with a mutual insurance company. So again, you want to go and promote the best policy and the best way to structure a policy, the only way to do it is this way. And you're going to show one company who, by the way, that same company. Here's another thing. Back in like 2013 or 2012, some hat at that company wrote an article about how infinite banking is suspicious and bad because he didn't read the book. I, I also know that I validated that. And he, he took a little bit of information. He jumped to an absurd conclusion because he was looking at how people were marketing it, some bad advisers marketing it in a certain way. He didn't actually look at the fundamentals of what was being talked about. And he's making assumptions about product, not about process. So they don't support the concept. They jumped out of the par market. They jump back in. They want to support stockholders. They can't get a transaction right. There's a potential big taxable problem with the product if you design it the way that people are showing. And I'm sure I could list off a variety of other things.

Yeah, that's really good, Rich. This is awesome. And that's what we've been talking about. The rant is exactly that, right? There's so much focus on the product versus exactly that, the process. Speaking of which, you just rang a bell for me. I actually need to connect with you at some point and pick your brain on a case that I'm working with, working on, because I have a. I may have a client who bought one of those policies from someone. And it's interesting when, you know, they're in the conversation portion of it. I'm chatting with the guy, he's like, oh, man. He's like, none. I didn't hear any of this stuff. Like when I'm just. I wasn't saying, oh, that's all bad. I was going through my own process and showing them, you know, what we do and how it all looks. And he's like, in fact, I don't even think I knew he had a policy right away. I can't remember that exactly. But he's just like, this, this is what I was hoping for. I just didn't know any better. I was working with this guy, not receiving any coaching, and that is what it is. And now I always. I don't know about you, Rich, but I really don't like to cancel policies, especially when they're in. Even if it's term or universal. Like, I always look very closely and we have good conversations to determine does it actually make Sense. And now it's really challenging for me because I'm like, long term, yeah, it's a good, it's going to work. It's going to be something, right? It's a good, it's a tool. Ultimately, yes, it's a good tool, but it's like brand new and it's not structured very well. And there's, you know, what I'm getting at, so we can talk about that later. And I had another guy that I was chatting with, Vern, met with this guy 13 times. He had nothing but time for me. I signed the policy paperwork, we get it all done. Have not heard from this guy in 13 months. I can't get a hold of a.

Guy, 13 meetings, get the policy in the books and do business with somebody, and 13 months later, still can't, can't get a hold of the person afterwards. It doesn't make any sense. It's totally irrational.

He might have exaggerated, but he did say, he said, look, I met with this guy like 13 times. He basically said to me, goes, Vern. He had all of the time in the world when we're in the beginning stages of it. And then as soon, by the way, the way that this policy was designed, in fact, I redacted the information, but I shared some of that info with you. Completely backwards.

I know the one you're talking about. And it's, it's, it's, it's financially damaging to the client is what it is.

Yeah, it's financially damaging. No coaching. Hasn't heard from the guy. And the problem with that is too, again, another, we're just, we're just going off now, but it's like we're constantly competing against this stuff. I'm not saying, like, I've got a little halo over my head here. I'm just saying there's a very specific way that we do things and how we coach people and we're involved. And the client portal we've created in the quarterly coaching sessions and regular meeting invites and reminders to actually connect with our clients. And oh, by the way, we all have policies and we practice the concept, kind of an important thing. But then we have guys out there or guys, gals, people in the industry who are just like, oh, what, becoming your own banker? Gosh, that sounds like a pretty good marketing scheme. That sounds like a good way for me to sell some policies and, you know, say all the right words and all that, you know, like, that's always going to happen in any industry, but it's just, just one of those things that we constantly deal with. And it's very frustrating because you, you know, you talk to someone and they're tainted now, like you said, like, oh, no, I heard about that before. I talked to a guy, got screwed out of it and whatever, whatever. And then, you know, then you got to try and pick up the pieces. And sadly, sometimes you can't now help that person because they're convinced that this is bad and you're evil type of thing. Right.

So anyway, yeah, it's unfortunate these things do happen. And again, we're not, like, we don't, we're not trying to, we don't be slanderous to any, any of our colleagues, any people in the industry. If you're in the industry and you're helping people get insurance and you're helping protect their families and you're, you're, you're doing things to try to help people, we appreciate you that. That's what's there. What we, what we are trying to say is we're not perfect. We're always growing and developing and getting better. But recognize that you can too, okay? And be receptive and be open to some coaching. And if you want to be out there and you want to be touting from the mountaintops and the rooftops that you teach the infinite banking concept and you, you, you, you want to see Nelson's vision out in the world, well, first off, you better have read Nelson's book a whack of times, like, like at least 10 times. Because if you haven't done that, then what are you doing at all, period? You should have applied and been accepted to, or at least at least reached out to make application to the Nelson Nash Institute. To join the institute, you have to go through an interview process, be aware of that. They don't accept everybody. You better have your own policy, and you better have taken a policy loan and you better have made loan repayments. If you haven't done those things, you have no business at all teaching this concept to any human being, period. That's my belief, that's my opinion. You know, opinions are, take, take it as you want. And you better recognize that if you're making statements like this is the only way to build and design a policy, you are simply wrong and incorrect because everybody's got a different financial juncture and we're all sorting through our own stuff. And so if you get clear on objectives and you understand other dynamics about insurability and creating options for the future for people and limiting ginormous potential tax landmines that could happen. When you structure a policy, et cetera, et cetera, then you know, you're actually doing the hard work, you're doing what's necessary. But you can't just say that, hey, there's a blanket. This is the only way building design a policy. And when I hear that kind of stuff, I'm not going to sugarcoat it anymore. I think it's. And that's not how we should be doing things. And if you're doing that, I'm not calling you out. What I'm asking you to do, I'm asking you to just think through it a little bit, bit differently. Think about what you're doing and understand or recognize, is there a way that you could be doing it better? Is there something you could be doing differently that could support your clients more? And just ask yourself that question. You know, I think we do a really good job here, but I also know we all have room for improvement. I believe that I can improve in everything that I do, Vern. I know that of you. You're a constant. You. You love coaching. You take things in. You're always trying to improve. And the more that we do that, and we also help our clients understand they can do that. We're all getting better. We're all growing. We're all moving towards a better and brighter future. And I envision that for our industry, because this is a phenomenal industry. We can help people in an amazing, amazing way. Everyone, everyone that's got an insurance license, you can do some tremendous good for folks. You just got to recognize that you can do it. And you gotta. You gotta. You gotta get started, you know, in the. In the right way, in my opinion.