Insurance Is For Protection, Not Income

It's time for the b a q a a to b a q a A. The b a q a just.

Tip fineit the b a q a not manday, but a q a. But I still got you a. So this is browna mention question answers. You have questions, although I might not have all the answers, I have some advice that you take with a grain of salt, but not really advice.

It's just I'm just sharing.

And you're gonna lean into the professionals in your life like your I'm not your your mama, your daddy.

I'm not your financial advice.

I'm not your attorney, honey, I'm not your h assurance agent whomever. Right, So you're gonna lean it to them. But you know, I'm just a smart brown girl that knows some brown girl things. Okay, Okay, so go through your grandma, not us. All right, So if you have a question that you want to submit, a question about business, by personal finance, about career money, go ahead on over to our insta brand Ambition podcast and you can dm us or and you can also email us by going

She said, Hey, ladies, quick.

Question from anonymous, thoughts on transferring funds for my kids college fund, which is a five twenty nine plan into their Index Universal policy, thinking I may get more banged from my buck. I appreciate all that you do, keeping amazing GIRLA. First of all, I hate the fact that you have an Index Universal insurance policy.

They got you good. Here's the thing.

I'm gonna take it from the word of get Ver Money. You know my NewYork Times, that seller that has sold over two hundred and seventy thousand copies, and so I personally entered deuce. If you have this book, go ahead on a turn to the get Good with Insurance chapter, and we're going to run on the page of two two forty six that I interviewed my financial advisor for

See the full amount of the promise.

Policy, you know, structure differently than term, and so you get life insurance benefits. You can also access to cash you put in. Now here's kind of like what they sell you on. Now here's the thing. I want you to take a step back. On the surface, it's like, well, dug, I should get permanent because I want to keep paying so that way my beneficiaries will get it even if I live past the thirty years. So on the surface, it seems like permanent or whole life universal sounds great. Now,

Is not. Think about your car insurance. You make money off your car insurances? You don't.

What about pet insurance? You mad that Fluffy is still alive? You make money off your pet insurance, you don't. What about home insurance? You make money off your home insurance, you don't. Insurance is there to protect you, not to make money off of.

But they have figured out with life.

Insurance how to trick you into thinking you should make money off of it. Here's the thing, hokeey, lowkey. You don't make no money off of even universal. There's no money to be made. So I'll give you an example. Forty year old woman, non smoker, if she was going to get a thirty year term policy for about a million dollar thirty year term policy about forty you're looking at about forty.

Or fifty bucks a month.

That means within the thirty years between forty and seventy. If she passes away before she reaches seventy years old, fifty bucks a month is she's gonna be paying monthly, and then that million dollars will go to whoever her beneficiaries are. Those are the people that you signed out and your sister, your cousin, your mother, your kids, who went for your husband, your partner, whoever? Right for about forty to fifty bucks a month for a term thirty

You know what, y'all gonna make me mad. I'm gonna do the math. Child, I'm gonna do the math. Where's my calculator? Just how they be getting you? Child seven?

You're an insurance agent talking about ativeny Shut up for real, because you guys should be ashamed of yourself. Seven hundred times twelve eighty four hundred additionally a month that you'd have to pay just to get that same million dollar policy.

Poor, k Why way, why why? Why? Why? Why?

That's ridiculous. You know the only person that really benefits from a universal policy is the person selling it to you. They eat it good honey off you. That's why the ages be so mad when I be talking, go ahead, k with your grandma, not me, because I blocked honey. So you don't slid on my DMS with the yang yang yang right, Our thirty year policy is meant. A life insurance policy is meant to cover your working years.

Guess what, he was forty one years old.

It covered his working years, and so now because he's not here, he provided for myself and my stepdaughter Lissa, because that's what life insurance is supposed to be for. It would have expired when he was like seventy or seventy five. By then a list will be a grown woman, maybe with kids and a partner of her own.

So certainly, life insurance at its bare core is supposed to provide for the peace people that you are currently providing for in your working years. I'm gonna say that again for the people in the back.

Life insurance is supposed to provide for the people you're currently financially provide for providing for your working years now by the time even if you get a thirty year policy when the baby is one years old, by the time the baby is thirty one, the thought is the child is working the only time.

There are a few times where and maybe it makes sense.

Let's just say you have a child that special needs will always need to be taken care of. There might be some leeway there. But for the average person, thirty year policy is plenty. It's affordable because sixty percent of people don't even pay the full universal because it's so expensive.

It's the first thing to go.

People say, oh, I got forty bucks a month to keep up a million dollar policy even though I lost my job. But people say, I don't have seven hundred and forty bucks a month even though I lost my job, So they get to keep.

All that money. You'll get okay. So here's some things that I wrote in the book.

Right, if the insurance broker says permanent life insurance acts like a tax deferral because you put the money in and you can essentially take out tax free loan for a tax free loan for the amount. What you need to know that is, while it's true it doesn't mean it's the best way.

For you to get a tax deferral.

Make sure you're already taking advantage of all the pre tax deferral accounts that are available to you, like a four to one k or ira iras an individual retirement account. And so a permanent life insurance policy is not the only tax planning strategy, nor is it the best, and it's probably the most expensive. If the insurance broker says it's building value because it has cass value.

You need to know that there are better ways to build your wealth. Do some quick math.

What's the difference between what you would pay for a term policy per year versus the permanent policy in this example seven hundred dollars a month eighty four hundred dollars a year.

What would you do if you put that into the stock market. Here's the thing. Listen to me closely to consumer reports. The average annual rate of return for a whole life guaranteed cast value this is a very popular type of permanent life insurance policy is one point five percent. Did you know what I said? The rate of return?

Child, you could just put your money in a savings account and they're going to give you more. If you're currently listening to this in two thousand. In February twenty twenty four, I think minus like four percent of four and a half four and a half percent, So that cast value. They'll be telling you, Oh, it's value, yes, baty cat value, it's bassula. If you're my Spanish friend, you know I say garbage. One point five percent, and that's not I didn't say that. Don't be mad at me.

Consumer reports senate that that is the average rate of return one point five percent. Says all that money that you're putting up for one point five percent. Meanwhile, the market in the last thirty years had yielded on an average seventy eight percent, in the last one hundred years ten percent.

So you could have taken that seven seven dollars seven hundred dollars monthly, put it into the market and got on a conservative seven percent return over the next ten years or so. Chall But you want your one point five percent because it's cats value. That's how they get you. That's how they get you. And so I made a mistake. I said before that sixty percent of people don't pay

First ten years.

Ooh, that means about half of the people with the most popular type of permanent policies whole life pay all these big premiums and never see a return.

Chow. Why you know.

You'll hear like insurance brokers will say something like, you'll have this benefit that you can provide to your children no matter what, even if you don't have other assets.

They get this life insurance policy from you. But you need to know.

That this guarantee comes at a significant cost that for most people doesn't make sense because are here now. You want that seven hundred dollars for them later or now monthly? You know what I mean? Like you be putting that money up, you know. Like, so I just want you to understand that like for you universal that you know, I see you already have a universal life insurance policy for your kids.

Consider term life insurance.

Now here's the thing, and life insurance is certainly a way for you to pass on wealth. So let's just say you've done all the other things, You've maximized your four one K.

You know, maybe you have a wroth.

You know, you're investing in the market, you're doing all these other maximizing things when it comes to your money, because you sat that with financial advisor and then you've done all the things and you're like, Okay, I want

Because guess what, I am not financially taking care of my sisters.

And my nieces and my nephews. You know, but it is a way to pass along wealth. I'm only continuing to pay the fifteen hundred to two thousand dollars annually because Angelie, my financial advisor said, you don't have to because Jerell's not here. Essentially it was for him, and I've already said a sign money for a listen, she's good, right, But because I already maximize every other area, to me, it's worth it as an additional way to pass on wealth to my family.

Now that's after doing the other things.

Does that make sense that like life insurance can certainly help you pass along wealth that you don't have access to. Candidly, my husband never made over sixty thousand dollars a year, but he was able to leave a good amount of money for myself and Alyssa through life insurance. But even then he had term because it would.

Have taken away from our daily life, the cost of universal whole life.

So I said all that amount of this to say, child, keep that money in that from five to twenty nine plan. And you know, because you want to be careful because five twenty nine is also our tax advantage plan. So if before taking that money out, you want to make sure that it's taking out in a way that's not going to trigger taxes for you, because it is a

Like you can consider something called a custodial account.

A custodial account is the kind of account that I have for my nieces and nephews. So I put money in there, and Alyssa too, I put money in their account. That's how I'm paying for college for her. Is that it's not a five twenty nine because I don't know what school finn to look like because my oldest nephew is eight. So instead of custodial account basically is like an investment account specifically where it can be used any kind of way, but it's not tax advantage.

But I'm willing to do that because I don't know what school is going to look like. The youngest niece is a million no, Maymi is six.

That means Lily is five, right, So I don't know what school is going to look like in like twelve years or whatever. But I saw I have custodial accounts for them, So yeah, like you know there are This is why asking for help and I'm so glad you wrote in anonymous. It's really important when it comes to your personal finances because you want to make sure that

Does that make sense? I hope it does.

Okay, all right, Harry, were gonna take a quick break and we come back.

I'm gonna take my second quite shaw, We are back and blacker then ever.

All right, So I've got an email from Girl. You're not say to keep your name anonymous, but I feel like it's a little personal, so I'm gonna call you Lee Le Okay, Lee, Lily said, Hi, Tiffany and Mandy. I love your show. Thank you, thank you so much for your financial insight each week. I've been separated from my partner since May twenty twenty three. We have been living separately since then in.

Our three year old child, OH and our three children have been living with me. I cover pretty much all of the expenses for our children. His contributions have been minimal, and I will be moving forward with getting a divorced this year. Okay.

Fortunately, I have been blessed to have a stable job as a physician. Okay, Girl, get money, honey, and financially I believe and I'm in a good place. Oh this is good, she said, I make over two hundred and fifty thousand dollars a year. I love that for you. Smart cis Doctor Lee, I need to update it. We're gonna call you a doctor Lely. Doctor Lee says, my partner used to take care of our taxes and we

Doctor Lyly. Honey.

So, first of all, yes, if you are ready for that divorce, going to you know, because you want to make sure that you know when you're married. Here finances are combined, and I don't know what your partner's finances are, but it seems like they're not helping you with the children. So that gives me a little indication that I don't know where they stand financially, and they might be racking up debt, which could be y'all's debt. If you don't,

Yes, doctor Leee, I actually have a website called oh what is it called?

Oh your moneymatch dot Com. I partner with this organization that helps you match you for free to a financial advisor. You're going to fill out a bunch of questions at your moneymatch dot Com and it's going to give you up to three potential financial advisors that you're going to interview. Now here's the thing, the reason why I'm not giving you the organization's name directly.

They hate that I'm doing, but I don't care.

I'm not thinking about them, thinking about you, because when you go to your money match dot com before you get matched, I will give you the questions to ask, like a document to fill out so you're ready.

So this is a.

Document that I feel that when I was looking for my financial advisor and I found her Angeline like, I created a document called your soul called financial Life that gave her an idea of who I am finance Antley. I submitted it to her and a bunch of people ahead of time so we can have an educated conversation about who I was financially with my goals and hopes and dreams are.

So I give you that you.

My so called financial life document. I give you the questions to ask them what to look out for. You do the quick quiz, which is literally just a few minutes. Then they're going to send you an email of like up to three financial advisors that might be a fit, and you're going to interview them to make sure that they're fit.

And if not, go back take the quiz again and get some new people.

And so that's why I won't give you the name of the company directly, because I told them I need to be in the middle of that, and they just told me the other day, which I'm so happy about that the people that go to your moneymatch dot com she said that you guys have been showing up so ready, the questions that you've been asking, the fact that you know your numbers.

I said, I know.

That's why I want to get in the middle, because I don't want to just fling you to the streets and say, oh, go talk to financial advisor.

How what should you be looking for?

Like I, for example, one is not only a certified financial planner, which is critical. It's a difference between just a regular financial advisor that's the gold standard, a certified financial planner, and the organization that I connect you to only has certified financial planners.

Not only does she have that, she's also a CPA, a certified public accountant.

For me, a business owner, that was critical. A I don't need all that. I pay Angelie good money because not only does she advise me on the money side of the tifney side, but also on the budgetnies to side a business. So it might be an overkill for someone but not for me. And so it's not enough of me to like, oh, you know, work with Angelie. No, you want a financial advisor, a certified financial planner.

That matches you.

You might find someone who navigates folks who are going through divorce, like for example, Angelie. Actually her husband is a physician and a lot of her clients are physicians that have their own practices, so she does a lot of small businesses and physicians. She does high networks individuals. So I share all that to say that it's not one size fit all when it comes to financial planners. That's why I said your moneymatch dot com. It's totally

I don't care. You're not the boss of me. I'm the boss of me.

I don't believe in call financial advisors that do aum assets under management?

What does that mean?

That means they manage your assets. Say let's just say you have you give them one hundred thousand dollars to manage. They'll take a percentage, usually about one percent and ends up being way too expensive over the life. I like financial advisors that I paid them a lump sum, whether it's monthly, annually or whatever or just one time. So financial advisors that do that, let's just say, I say, oh, I want a.

Financial plan, and they said okay.

Plans are usually between twelve hundred and fifteen hundred dollars. They give you the plan, you work the plan, boom, you're done, versus you by the time a financial avisor takes one percent, which doesn't sound like much, it actually combines to basically typically eat up almost all of your gains. No, I don't believe AUM, so that's just my two cents, and I don't believe in navigating financial advisors that take AUM.

Am so grateful.

I had a financial advisor because a Julie, it wasn't just about here's what you do with your money. A really good financial advisor is holistic. Before drew past away because it was an aneurysm, so it was really sudden. Angelie asked for all my financial paperwork. He had a pension at work, we had life insurance policy, we had all this stuff. Anjalie looked at all of our insurances everything.

Ask for this type of insurance. She don't get paid on the back end for that.

Because whoever he who pays the piper determines the tune.

What does that mean? That means if.

Angelie got money from the insurance company, she gonna do what they want.

Antealie gets paid by me, so she do what I want.

That makes sense, So I don't want nobody who's getting no back end money from like people that they're upselling me to. That's how them doctors, you know, like all those pharmaceuticalum one of my friends used to be like the pharmaceutical reps.

You know, they begin the doctors all these free stuff, and doctor got.

You oncopin for man's a paying all this stuff. Meanwhile you got a stomach ache because the doctor getting some kickback.

Y'all know y'all be doing that. Not you, not you, doctor Leelee. I'm sure you're great, but I'm saying, I know you know how you have some doctor friends that be writing all them for scriptions, you know, and so he who pays the piper who is paying your financial advisor? You. I pay Auntealie monthly on a one year what's it called it? Like, it costs me one year, and I pay.

On a lot because she does me and the budgetista is so high end, which is fifty I think I pay her like fifteen thousand dollars a year. That's a lot on the typically low end, lower end looking at about five thousand dollars a year, you know, But then you can also pay hourly, which a friend of mine just meets with her financial advisor, you know, like twice

So pay upfront.

No, aum, these are just like you know, like I might give you financial advice.

I'm just certain what I did.

And you know, like you use the free tools that I've given you to help map out the right person and following your taxes like you know, I don't know how if you have your own business or as a physician, whatever, but yes, having like you know, not no H and R blocks. Sorry, I'm sorry there was ever gonna sponsor us, but don't do that. Go ahead to like a regular accountant, and yes, let them file your taxes.

Taxes usually be a maybe between six hundred to.

One thousand dollars to have your taxes filed because you just want to make sure you have all your stuff in a row. So asking for help is never a bad thing. Sometimes it does cost to pay for word, okay, And yeah, so you know girl, you know, you know you're on the next stage of your life, you know, take care of you and your beautiful babies. Doctor Lealey, we'll see you in these financial streets. If you want my body and you.

Think I'm sexy, that's a song somebody y'all too young.

If you want our advice and you think I'm smarty, come my lady, let me know.

I edit it for y'all.

Go ahead on over to Branna Vision Podcast on ig or Brannivision podcast dot com. Click contact us. You can ask your questions there. Questions about money, career, business, entrepreneurship, finance, honey, career, oh that's a career, even your life, honey. You might want some life advice. I don't know all the things,

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