E19: Caution: Life Insurance to Never Use in a Banking System
Episode description
Not all life insurance is created equal. In this episode, we discuss the biggest problems found in certain life insurance policies. And we'll cover why you would never want to use them in your banking system.
Now, for those of our listeners who have been with us for a while, they know that we're big fans of a particular concept. It's called the “becoming your own banker” idea. It uses life insurance as a tool to practice banking in a brand new way.
But the problem is that there are so many different kinds of policies out there. We have people come to us who have these policies, and they want to know if they're any good.
So we describe to you a few of the policies to avoid, especially if you're doing this banking concept.
Life Insurance Policies to Avoid Discussed:
* Indexed policies
* Universal variable policies
* Term insurance
* Hidden servicing fees and cost increases
* Funny business with numbers
* The fine print costing you control
* What your agent needs to clearly explain to you
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Episode Takeaways:
* That's the issue with universal life is it may turn out okay, but that's not really up to you.
* The insurance company has the control of the policy to determine what they're going to cap you at, so they can always drop the cap.
* Banks don't buy these policies and there's a reason why, because they can't control what happens to that policy due to the guarantees and all the things that are given control over to the insurance company.