As with any industry, you will find dishonest people who make a bad name for your product. It doesn’t matter if it’s a service or product they are looking to do one thing and that moves forward without taking you into consideration.
Lately, I have heard and SEEN far too much of this going on and figured it was high time you were educated on how to prevent yourself from being taken advantage of.
This blog is going to address those of you who have Infinite Banking policies with other agents. You may not be getting straight answers or your agent may not have educated you enough for you to know what can and can’t be done.
So here are a few things that should be red flags to you:
You are told to “cancel” or “move” your policy to a new mutual company.
If you have a true whole life policy that was set up for IBC and done correctly and is with a mutual company that pays dividends there should be no reason to ever “cancel” or “move” that policy! If you are being asked to 1035 money from one whole life to another, this should set off red flags to you. (Notice I only mentioned whole life, not universal or variable)
You are told your mutual company stopped paying dividends.
It is so very rare to have a mutual company in good standing to not pay dividends that you should be questioning why this is happening and possibly checking into it yourself by calling the company directly or with another certified IBC agent. Most good A rated companies who have been around for over 100 years have paid dividends this whole time, why would they stop now? These companies are pros at managing money and have done better than the banks and the Federal Reserve for over 100 years. Another huge red flag to you if you hear this.
You are told you cannot reduce your premium.
If your policy was set up correctly for IBC than there are two parts to your premium and one of them does not have to be paid in full each year. The only portion of your policy that has to be paid in full each year (either monthly or yearly) is your death benefit. So yes, if your policy is set up correctly with two parts you do have the ability to lower it to a certain point. Do not cancel your policy because you can’t afford it, talk to another certified IBC agent to get the facts and have them look at it.
You get YELLED at by your agent because you want to make changes or have questions.
If you are pressing your agent with legitimate questions or make a decision to not move forward with a policy and you get yelled at that is yet another red flag. This is truly a red flag no matter where you go to buy anything. Questions should always be answered without you having to get reprimanded for it. It’s your money, you deserve the right to question and quiz. This also applies to you deciding you may not want to write business or continue business with someone. You should never get yelled at, it’s your decision and your money, not theirs.
You are told to stop paying your premium and make it a “paid-up policy” then they want to write a new one.
There are very few times this should ever be suggested. Unless you are close to the MEC line (the point at which the policy becomes taxable) you should not stop paying premiums just to start another policy. Numbers don’t lie, it is not going to get you anywhere quicker than continuing to use the policy you have. Even in this case I just suggested you would still be paying your current policies death benefit. Red flag city here.
You ask for a loan and the agent “withdraws” money or does a “surrender of PUA’s”
In case you don’t already know if you “withdraw” money from your policy it physically removes money from your cash value. This means two things, 1. your cash value decreases and you earn less compounding interest on less money, just as you would if you paid cash from your savings and 2. You have to pay tax on that money if any of it comes from the growth of your policy. It will be looked at as income.
Similar things will have with surrendering PUA’s. It decreases the amount of money you have earning you anything.
There is just isn’t a good reason to do this unless YOU ask for it to be done and UNDERSTAND the consequences. If you have a good agent they should know better.
You are sold a policy with the paid-up additions rider (PUA) being added after year one.
There is NO reason at all I can think of where this should ever happen. Your policy should have PUA’s on it from day one. If this rider is known about on setup of the policy it should be added right away. The only reason I can think of to do it later is for the benefit of the agent. I have clients of my own who maybe don’t qualify for the rider due to their health rating but that is forced policy not elective. There are also clients who can’t afford to put money into the rider year one but we still add it so we have it there for years to come. In most cases all one has to pay is 10.00/month to keep that rider active, there is no reason to wait.
There are a lot of things here to consider but these are the ones I have come across and get so upset when I see them. None of these things were done for the benefit of the client, but for the benefit of the agent. Just because someone knows this process does not mean they are working for you! I welcome clients who have their guard up, that means they are serious about their money and willing to learn the process to make an educated decision.
DON’T just trust people with your money, ask questions and do your due diligence. You work hard for your money make sure your agent cares about you and at the same time you better be willing to get involved and learn.
If you are scared to ask a question it is most likely a question that needs to be asked.
As always be sure to contact me with any questions.