Use a policy with living benefits, not just a traditional death benefit.
Your Life Insurance Can Be Your Safety Net While You’re Still Living.
Imagine your life insurance policy is like a well-stocked emergency kit in your car. A traditional policy is like having only a spare tire – it’s incredibly useful if you have a flat, but what if your engine overheats or you get stuck in a blizzard? A policy with living benefits is like having a full kit with jumper cables, blankets, and first-aid. If a serious illness strikes, you don’t have to “crash” your finances to survive. You can access a portion of your policy’s death benefit right then, helping you pay for medical bills and keeping your family afloat. It’s about having the right tools for a crisis, not just for the final destination.
Stop overfunding a whole life policy in the early years. Do a 1035 exchange into a better-designed policy instead.
Don’t Drown Your Young Policy; Let It Learn to Swim.
Think of starting a whole life policy like planting a sapling. In the beginning, you want to give it just the right amount of water and sunlight to grow strong roots. Overfunding it is like flooding the poor plant; you’re pouring in so much cash that it can’t be used efficiently, and high early fees just wash it away. Instead of drowning your sapling, consider a “1035 exchange.” This is like transplanting it to a new pot with better soil, a better-designed policy where your money can immediately start working for you, leading to healthier, more robust growth for your financial future without losing the progress you’ve already made.
Stop buying mortgage protection insurance from your lender. Do a level term life policy for 10x the coverage at half the price instead.
Why Buy a Single-Use Umbrella When You Can Have a Full Tent?
Buying mortgage protection insurance from your bank is like buying a tiny, expensive umbrella that only covers your front door keyhole. It pays off the bank directly, and the coverage shrinks as you pay down your mortgage, while your premium stays the same. A level term life policy, on the other hand, is like a giant, affordable tent. It gives your family a massive, tax-free cash benefit—often ten times what the bank offers—for a fraction of the cost. They decide how to use it, whether it’s paying off the mortgage, covering bills, or saving for the future. It protects your family, not just the bank’s loan.
The #1 secret for tax-free retirement income is leveraging a properly structured Indexed Universal Life (IUL) policy, not just relying on a Roth IRA.
Build a Financial Greenhouse, Not Just a Garden Pot.
Relying only on a Roth IRA for tax-free retirement is like having a single, albeit nice, pot for your retirement garden. It’s great, but it has limits on how much you can plant each year. A properly structured Indexed Universal Life (IUL) policy is like building a massive greenhouse. You can cultivate a much larger sum of money, shielded from market downturns (the floor protects your plants from frost) and linked to market growth (the clear roof lets the sunshine in). When you retire, you can take loans from your policy’s cash value, creating a stream of tax-free income that feels like harvesting from your protected, thriving garden year after year.
I’m just going to say it: “Buy term and invest the difference” is terrible advice for high-income earners.
Don’t Use a Garden Hose to Fill an Olympic Swimming Pool.
“Buy term and invest the difference” is like using a simple garden hose to fill a backyard pool – it works fine for most people. But for high-income earners, this strategy is like trying to fill an Olympic-sized swimming pool with that same hose. Your “investment bucket” (taxable brokerage account) will overflow quickly and get soaked by taxes every year. Permanent life insurance, however, acts like a massive, efficient water pipeline. It allows you to move a significant amount of capital into a tax-sheltered environment where it can grow without the constant drag of taxes, giving you more control and a much larger pool of wealth in the long run.
The reason your cash value life insurance isn’t growing is because your agent sold you a high-commission, low-performance product.
Your Financial Rocket Is Burning Fuel Without Lifting Off.
Imagine your life insurance policy is a rocket designed to take your wealth to new heights. A good policy has a powerful engine and a sleek, efficient design. But if your cash value is stagnant, it’s likely your agent sold you a rocket with a tiny engine and a massive, heavy fuel tank full of their own commissions and fees. Your premium payments are just burning up, creating a lot of smoke but no lift. The solution is to find a policy designed for performance, where more of your money acts as rocket fuel, actually propelling your cash value upward instead of just paying for a clunky, earthbound machine.
If you’re still relying solely on your employer’s group life insurance, you’re losing control and portability.
Don’t Build Your Financial House on Rented Land.
Relying only on your employer’s group life insurance is like building your family’s dream house on land you rent from your boss. It feels secure for a while, but what happens if you change jobs or get laid off? The landlord takes the land back, and your house disappears. You lose the protection instantly. Owning your own individual policy is like buying the land outright. It’s yours, no matter where you work or what happens to your job. You control it, you can take it with you, and you can ensure your family’s home is built on a foundation you own, not one you just borrow.
The biggest lie you’ve been told is that whole life insurance is a bad investment.
You’ve Been Told a Swiss Army Knife Is a Bad Screwdriver.
Critics who say whole life insurance is a bad investment are like someone telling you a Swiss Army Knife is a terrible screwdriver. They’re missing the point. While it might not have the explosive returns of a specific stock (the dedicated Phillips head), it’s not designed to. It’s a multi-tool: it provides a death benefit, guaranteed cash value growth that acts like a stable savings vehicle, tax advantages, and a source for loans. It’s the financial tool that provides stability, safety, and multiple options in one package. It’s not about being the ‘best’ at one thing, but about being incredibly reliable and versatile for many things.
I wish I knew about the tax advantages of policy loans when I was first starting to build wealth.
Discovering the Secret Door in Your Own Financial House.
Imagine building your wealth is like building a house. You put your savings into different rooms: the “stock market” room, the “savings account” room. You know that to take money out, you have to open the front door and pay a tax toll. But a permanent life insurance policy has a secret back door. When you take a policy loan, you aren’t actually withdrawing your money. You are borrowing from the insurance company using your cash value as collateral. This means you can access the funds completely tax-free. It’s like having a private, tax-free ATM connected to your house that you never knew existed.
99% of people make this one mistake when buying life insurance: focusing on the premium, not the internal costs.
Don’t Judge a Road Trip by the Price of Gas Alone.
Choosing a life insurance policy based only on the premium is like planning a cross-country road trip and only looking at the price of gas per gallon. You might pick a car with a cheap fill-up, but what if it has terrible mileage, high maintenance costs, and expensive insurance? You’ll end up paying far more over the journey. The premium is just the gas price. The real drivers of cost are the internal fees and expenses—the policy’s “miles per gallon.” A slightly higher premium on an efficient policy can save you tens of thousands in the long run, ensuring more of your money fuels your cash value, not the company’s expenses.
This one small action of adding a paid-up additions rider will change your policy’s cash growth forever.
Adding a Turbocharger to Your Financial Engine.
Think of your whole life policy as a reliable, steady car engine. It works well, building cash value predictably over time. Adding a paid-up additions (PUA) rider is like bolting a turbocharger onto that engine. Every time you contribute to the PUA rider, you’re buying a small, fully paid-up “mini-policy” that immediately adds to your cash value and earns dividends. It’s a direct injection of horsepower into your policy. This small action dramatically accelerates your cash value growth, turning your steady family car into a high-performance financial vehicle that gets you to your goals much, much faster.
Use an Irrevocable Life Insurance Trust (ILIT), not just naming a beneficiary, to protect your death benefit from estate taxes.
Put Your Inheritance in a Vault, Not Just a Locked Box.
Naming a beneficiary on your life insurance is like putting your family’s inheritance into a locked box. It’s safe from most people, but the government has a master key called the estate tax. If your estate is large enough, they can open that box and take a substantial portion. An Irrevocable Life Insurance Trust (ILIT) is like building a secure, separate vault for that inheritance. The trust owns the policy, so the death benefit is not considered part of your estate. When you pass away, the money goes directly into the protected vault for your family, completely shielded from the hands of the estate tax man.
Stop thinking of life insurance as just death protection. Do use it as a private banking alternative instead.
Your Policy Isn’t a Coffin; It’s a Personal Bank.
Most people see life insurance as a casket you buy for your family’s future. They think it only has value when you’re gone. That’s a huge mistake. Instead, think of a cash value policy as your own private bank. You make deposits (premiums), and your capital grows in a tax-sheltered environment. When you need money for an opportunity or an emergency—a down payment, a business investment—you can take a loan against your “bank’s” assets without lengthy approvals or credit checks. You become your own banker, leveraging your own capital to build wealth while you are very much alive.
Stop buying life insurance for your children as a standalone policy. Do add a child rider to your own policy for pennies instead.
Buy One Ticket and Let Your Kids Ride for Free.
Buying a separate life insurance policy for your child is like buying them their own expensive, full-fare train ticket for a journey they might not even take. A much smarter way is to add a child rider to your own policy. This is like the family-pass option where, for just a few extra dollars—pennies on the dollar compared to a separate policy—all your children get to ride along on your ticket. It provides a modest amount of coverage for them, and more importantly, it often guarantees their future insurability, ensuring they can buy their own policy as an adult, no matter their health.
The #1 hack for getting coverage with a health condition is using an independent agent who can access impaired-risk carriers.
Don’t Go to a Bicycle Shop to Fix Your Motorcycle.
Trying to get life insurance with a health condition by going to a single insurance company is like taking a high-performance motorcycle to a bicycle shop. They only have tools for simple, standard models and will likely say they can’t help you. An independent agent who specializes in “impaired-risk” cases is like a master mechanic with a huge garage. They know which insurance carriers are the specialty shops—the ones that have the right tools and expertise to work on complex cases like diabetes or heart history. They can find the one carrier that views your “motorcycle” favorably and get you the best possible offer.
I’m just going to say it: Universal life insurance is often a ticking time bomb of rising costs for the uninformed.
A Beautiful Beach House Built on Eroding Sand.
Imagine buying a beautiful beach house. The seller shows you projections of sunny days and calm seas, representing the policy’s performance. This is Universal Life. The problem is, the foundation is built on shifting sand—the internal cost of insurance. As you get older, that cost can rise dramatically, like a tide coming in. If your policy’s cash value (the beach) doesn’t grow fast enough to stay ahead of the rising costs (the tide), the waves will eventually crash into your house, draining your value and potentially causing the entire structure—your policy—to collapse, leaving you with nothing.
The reason your term policy is so expensive is because you bought it online instead of using a broker to shop dozens of carriers.
You Paid Full Price in a Mall Full of Sales.
Buying term insurance directly online is like walking into the first store in a giant mall and paying the sticker price for a pair of jeans. You might get a decent pair, but you have no idea if the store next door has the exact same pair for half the price. An independent broker is like a personal shopper who knows every single store in the mall. They take your measurements (your health and needs) and instantly check the prices at dozens of different carriers—the “stores”—to find you the absolute best deal, saving you a significant amount of money for the identical coverage.
If you’re still paying for a 30-year term policy in your 50s, you’re losing money that could be building cash value.
You’re Still Paying Rent on a House You Could Have Owned.
Holding a 30-year term policy in your 50s is like paying rent for the same apartment for three decades. For the first twenty years, the rent was cheap and made sense. But now, you’re older, more established, and you’re still just paying rent with no equity to show for it. That money could have been going towards a mortgage on a permanent policy, building up valuable home equity (cash value) that you could access later in life. By continuing to just “rent” your insurance, you’re missing the opportunity to turn that monthly payment into a valuable, appreciating asset for your retirement years.
The biggest lie you’ve been told is that you only need life insurance if you have dependents.
Your Financial Backpack Is for Your Own Journey Too.
People think life insurance is like a will—it’s only for the people you leave behind. This is a huge misconception. Think of your financial life as a long hike up a mountain. Your dependents are your hiking partners, but you are still carrying your own backpack. A permanent life insurance policy with living benefits and cash value is part of your gear. If you get sick, it provides the first-aid kit. If you need capital for an opportunity, it’s your source of emergency funds. It protects your own financial journey, ensuring you have the resources to handle the unexpected long before you reach the summit.
I wish I knew to ladder multiple term policies for different needs instead of buying one large, expensive policy.
Building a Staircase Instead of Taking One Giant Leap.
Buying one large 30-year term policy is like trying to make one giant, awkward leap to cover all your future financial needs. It’s expensive and inflexible. A much smarter approach is to “ladder” your policies, which is like building a staircase. You might buy a 10-year policy to cover preschool costs, a 20-year policy to cover the mortgage, and a 30-year policy to get you to retirement. As each short-term need expires, you let that “stair” or policy fall away, and your premiums drop. It’s a custom-built solution that provides the exact amount of coverage you need, exactly when you need it.
99% of business owners make this one mistake: not funding their buy-sell agreement with life insurance.
Having a Map to Buried Treasure, But No Shovel.
A buy-sell agreement for a business is a map that clearly states how the business will be transferred if a partner dies. It’s a brilliant plan. But having that agreement without funding it with life insurance is like having the treasure map but no shovel. When a partner dies, the surviving partners have the “map” telling them they can buy the deceased partner’s shares, but they have no cash—no “shovel”—to actually do it. Life insurance provides the instant, tax-free cash needed to dig up the treasure, allowing the surviving partners to execute the plan smoothly and ensure the business continues without financial chaos.
This one habit of reviewing your beneficiaries annually will prevent a devastating legal battle for your family.
Updating the GPS for Your Family’s Financial Journey.
Your beneficiary designation is the GPS address you program for your life insurance proceeds. When you first set it up, the address—maybe your spouse—is correct. But life happens. You might get divorced, remarry, or have children. Failing to update your beneficiaries is like leaving an old, outdated address in the GPS. When you pass away, the money could be sent to the wrong destination, like an ex-spouse, forcing your intended heirs into a long, expensive, and emotionally draining legal battle to reroute the funds. An annual review is a simple 5-minute fix that ensures your legacy arrives exactly where you intended.
Use premium financing for large policies, not just your own capital, to maximize leverage.
Using the Bank’s Crane to Build Your Skyscraper.
Imagine you’re building a massive skyscraper, representing a large life insurance policy for your estate. You could spend all your own cash on materials (premiums) brick by brick, tying up your liquidity. Or, you could use premium financing. This is like getting the bank to provide a giant crane. A lender pays the hefty premiums for you, and you only pay the interest on the loan. This leaves your own capital free to be invested elsewhere, earning returns. You’re using the bank’s powerful tool to lift the heavy weight, allowing you to build a much larger structure while keeping your own money actively working for you.
Stop letting your term policy lapse. Do convert it to a permanent policy without a new medical exam instead.
Don’t Demolish the Foundation; Build a House on It.
Letting a term policy expire when you still need coverage is like having the perfectly laid foundation for a house and then abandoning it to be reclaimed by weeds. You did all the early work! Most term policies have a hidden superpower: a conversion privilege. This allows you to convert that term foundation into a permanent home—a whole life or universal life policy—without any new medical questions. You get to keep your original health rating, even if you’re older or sicker. It’s the ultimate home renovation, turning your temporary shelter into a lifelong asset without having to pour a new foundation.
Stop guessing your coverage needs. Do a proper financial needs analysis instead.
Don’t Pack for a Mystery Trip; Read the Itinerary First.
Buying life insurance without a needs analysis is like packing for a trip without knowing if you’re going to Siberia or the Sahara. You’re just guessing, so you’ll either pack way too much (overpay for coverage you don’t need) or not nearly enough (leave your family financially stranded). A proper financial needs analysis is the itinerary for your family’s future without you. It calculates exactly what they’ll need for the mortgage, for college, for daily living. It tells you whether to pack a parka or shorts, ensuring you buy the exact right amount of coverage—no more, no less.
The #1 secret for a massive tax-free inheritance is a Survivorship Universal Life (SUL) policy.
A Financial Time Capsule for Your Grandchildren.
A Survivorship Universal Life (SUL) policy is a special type of life insurance that covers two people, usually a married couple, but only pays out after the second person passes away. Think of it as a financial time capsule. You and your partner create it and fund it during your lifetimes. Because it’s designed to pay out much later, it’s significantly cheaper than two individual policies. When the capsule is finally opened by your heirs, it delivers a massive, completely income and estate tax-free inheritance, perfectly preserving your wealth and passing it down to the next generation intact.
I’m just going to say it: Return of premium life insurance is a gimmick with a poor internal rate of return.
The Financial Equivalent of a “Free” Toaster.
Return of premium (ROP) life insurance promises to give all your money back if you outlive the term. It sounds amazing, like getting free insurance. But it’s like a bank offering you a “free” toaster for opening an account with a terrible interest rate. The extra premium you pay for the ROP feature is the money that could have been earning a much better return elsewhere. You’re essentially giving the insurance company an interest-free loan for 20 or 30 years. When they hand you your money back, it’s worth far less due to inflation. You would have been much better off buying cheaper term and investing the savings.
The reason your life insurance application was denied is because you hid information from the underwriter.
A Small Lie Can Sink a Very Large Ship.
Applying for life insurance is like building a ship. The underwriter is the naval architect who needs to see the full, honest blueprints of your health and lifestyle to ensure the ship is seaworthy. Hiding a medical condition or a risky hobby is like knowingly using faulty materials or covering up a crack in the hull. The architect will eventually find it during their inspection—through medical records or prescription history—and they won’t just fix the crack, they will condemn the entire ship. Honesty is the only way to build a policy that will actually stay afloat and protect your family.
If you’re still holding your life insurance policy inside your taxable estate, you’re losing up to 40% to taxes.
Your Inheritance Has a Hole in Its Pocket.
Imagine your life insurance death benefit is a big bag of cash you’re leaving for your family. If you personally own that policy, it’s like carrying that bag in your own pocket when you pass away. Because it’s in your pocket, the government considers it part of your total wealth (your estate). If your estate is large enough, an “estate tax” officer will reach into that pocket and pull out up to 40% of the cash before it ever gets to your loved ones. By placing the policy in a trust, you give the bag directly to your family, ensuring their inheritance arrives full, with no holes for taxes to leak out.
The biggest lie you’ve been told is that you can’t have life insurance if you’re a senior.
The Garden Doesn’t Close Just Because It’s Autumn.
Believing you’re too old for life insurance is like thinking a garden center closes forever once summer ends. It’s simply not true. While you might not be able to plant a giant oak tree (a massive policy at low rates) like you could in your youth, there are still plenty of beautiful and valuable plants perfect for the autumn season. There are policies designed specifically for seniors, often for final expenses or leaving a legacy, that are affordable and accessible. The options change, but the opportunity to plant something that will benefit your family for years to come is always there.
I wish I knew that life insurance cash value is protected from creditors and lawsuits in most states.
Your Financial Safe Room in a Storm.
Imagine your financial world is a large house. You have assets in various rooms—the stock market, real estate, bank accounts. If a major storm hits, like a lawsuit or bankruptcy, creditors can break down the doors and seize assets from almost every room. However, in most states, the cash value inside your life insurance policy is in a legally protected safe room. It has a reinforced door that creditors can’t breach. Knowing this allows you to build wealth with the peace of mind that no matter how bad the storm gets, you have a protected sanctuary where your capital will remain safe for you and your family.
99% of parents make this mistake: naming a minor as a beneficiary directly on their life insurance policy.
Sending a Million Dollars to a Toddler’s Piggy Bank.
Naming your young child as the direct beneficiary of your life insurance is like trying to wire a million dollars to their piggy bank. It’s a disaster. Insurance companies cannot legally pay out large sums of money to a minor. Instead, the court system will have to intervene, appointing a legal guardian to manage the money—a process that is slow, expensive, and public. A far better way is to name a trust as the beneficiary. This creates a secure financial “playpen” where the money is protected and managed by someone you choose, for your child’s benefit, without any court interference.
This one small action of getting a medical exam can cut your life insurance premiums by half compared to no-exam policies.
Showing the Mechanic the Engine to Get a Better Price.
Opting for a no-exam life insurance policy is like trying to sell a used car without letting the buyer look under the hood. The buyer has to assume there might be problems, so they’ll offer you a much lower price to cover their risk. In this case, the insurance company is the buyer, and they charge you a much higher premium. Taking 30 minutes for a free medical exam is like popping the hood and letting the mechanic see you have a perfectly maintained engine. By proving your good health, you remove the company’s risk, and they will reward you with their best rates—often cutting your premium by 50% or more.
Use a life settlement to cash out an unneeded policy, not just surrender it back to the insurance company for pennies.
Selling Your Old Car Instead of Scrapping It.
Surrendering a life insurance policy you no longer need is like taking your old, but still functional, car to the junkyard. The insurance company will give you the scrap value, which is just the cash surrender value—pennies on the dollar. A life settlement, however, is like finding a buyer who wants to restore that classic car. A third-party investor will buy the policy from you for more than the scrap value, but less than the death benefit. They continue paying the premiums and collect the benefit later. It’s a hidden market that allows you to sell your unneeded asset for a fair price, not just scrap it.
Stop paying for your policy annually if you can’t afford it. Do switch to monthly payments even if there’s a small fee instead of letting it lapse.
Don’t Cancel the Trip; Just Change the Payment Plan.
Paying a big annual life insurance premium can feel like having to buy a whole year’s worth of groceries in one trip. If you don’t have the cash for that one massive bill, your first instinct might be to cancel the whole thing (let the policy lapse). That’s a huge mistake. Instead, you should switch to monthly payments. Yes, there might be a small service fee, like a delivery charge, but it’s far better than having no groceries at all. Paying a little extra to break up the cost keeps your family protected and is always a better choice than losing your valuable coverage.
Stop assuming you’re uninsurable. Do work with a special risk underwriter instead.
There’s a Key for Almost Every Lock.
Feeling uninsurable because of a health condition is like finding a complex, antique lock and assuming no key exists for it. You try your own simple keys, and when they don’t work, you give up. A special risk underwriter or an impaired-risk broker is a master locksmith. They have a massive ring with hundreds of specialty keys. They know the exact insurance carriers (“keys”) that are designed to fit unique and complicated health situations (“locks”). While not every single lock can be opened, a specialist knows how to find the one unique key that can often secure the coverage you thought was impossible to get.
The #1 hack for smokers to get non-smoker rates is to quit for 12-24 months and apply for reconsideration.
Earning Your Way Out of the Penalty Box.
Being a smoker when you apply for life insurance is like starting a hockey game in the penalty box; you’re immediately hit with higher rates. But the penalty isn’t for life! The “hack” is to serve your time. If you completely quit smoking and using nicotine for at least 12 consecutive months (sometimes 24), you can go back to the referee (the insurance company) and apply for a rate reduction. By demonstrating a clean record, they will often “release you from the penalty box” and grant you the much lower, non-smoker rates, saving you a fortune over the life of the policy.
I’m just going to say it: The life insurance quotes you see online are often misleading “teaser” rates.
The Perfect Price Tag on an Empty Box.
Those super-low life insurance quotes you see online are like a beautiful, shiny box on a store shelf with an incredibly cheap price tag. It looks fantastic, so you decide to buy it. The problem is, that price is only for people in perfect, Olympic-athlete health. For 95% of people, once you actually apply and the company looks inside the box at your real health history, they’ll say, “Oh, you wanted the version with the actual product inside? That will be a different price.” The initial quote is just a teaser to get you in the door; the real price is only revealed after underwriting.
The reason your whole life policy seems expensive is because you’re thinking of it as an expense, not an asset.
It’s Not a Bill; It’s a Brick for Your Fortress.
If you view your whole life premium as just another monthly bill, like your cable or electricity, it will always feel expensive because you’re not seeing the value it creates. You need to change your mindset. That premium is not a consumption expense; it’s a contribution to an asset. Think of it like buying a gold brick. Each payment you make is another brick being added to your personal financial fortress. This fortress not only protects your family but also grows in value over time, becoming a source of strength and capital you can use later in life. You’re not spending money; you’re building your own Fort Knox.
If you’re still using your bank for your estate planning, you’re losing out on the superior benefits of a life insurance-funded trust.
Why Use a Rowboat When You Can Have a Yacht?
Relying on a bank to settle your estate is like asking your family to cross a turbulent ocean in a small rowboat. It’s a slow, public, and costly process, subject to the storms of probate court and creditors. A life insurance-funded trust, on the other hand, is like giving them a luxurious private yacht. The moment you pass away, the life insurance proceeds instantly and privately fund the trust, bypassing probate entirely. The yacht is fully fueled and ready to go, providing immediate tax-free liquidity for your family, protecting them from creditors, and ensuring your legacy sails smoothly to its intended destination.
The biggest lie you’ve been told about variable life insurance is that the potential returns outweigh the risks.
A Roller Coaster with No Safety Brakes.
Variable life insurance is pitched as the thrill ride of the insurance world, directly linking your cash value to stock market sub-accounts for explosive growth potential. It sounds exciting, but it’s like a roller coaster that conveniently forgets to mention it has no emergency brakes. When the market soars, it’s a fantastic ride. But when the market plummets, your cash value can crash and burn, and the rising internal insurance costs can drain it even faster. For many, the gut-wrenching risk of losing a significant portion of their principal far outweighs the tantalizing, but completely unguaranteed, potential for high returns.
I wish I knew to check the financial strength rating of my insurance company before buying a policy.
Checking the Foundation Before You Build the House.
Buying a life insurance policy is a long-term promise. You’re paying a company today so they can pay your family in 10, 20, or even 50 years. Neglecting to check the company’s financial strength rating is like building your dream house without ever inspecting the foundation. It might look great on the surface, but if the foundation is weak, the whole structure could crumble when you need it most. Ratings from agencies like A.M. Best or S&P are the engineering reports for that foundation. A top rating (like A+ or A++) gives you the confidence that the company is built on solid rock and will be there to honor its promise.
99% of people make this mistake when taking policy loans: not understanding the difference between direct and indirect recognition.
Two Vending Machines, Two Different Prices.
Imagine your policy’s cash value is money in a special vending machine that also pays you interest. When you take a loan, how the company treats your collateral makes a huge difference. With “direct recognition,” the money you borrowed against is moved to a side account and earns a different, often lower, interest rate. It’s like the vending machine charges you for taking an item and stops paying you interest on that portion. With “indirect recognition,” the company lends you their money and your cash value continues to earn uninterrupted interest or dividends as if it were never touched. It’s a subtle but critical difference that dramatically impacts your long-term growth.
This one small habit of paying your premium on time will protect your insurability for life.
Keeping the Door to Your Financial Fortress Unlocked.
Think of your current life insurance policy as a key to a fortress of insurability. As long as you keep that policy active by paying the premiums, the door to future coverage often remains open, regardless of what happens to your health. Many policies contain guarantees that allow you to purchase more coverage or convert to different types without new medical exams. But the moment you miss a payment and let the policy lapse, that door slams shut and is locked forever. A simple habit like setting up autopay ensures you never accidentally lose the key that guarantees you can protect your family in the future.
Use a MEC (Modified Endowment Contract) intentionally for tax-deferred growth, not by accidentally overfunding your policy.
Using a Greenhouse for Growth, Not Just Storage.
Normally, a life insurance policy is like a versatile barn, offering protection and tax-free access. If you overfund it too quickly, it becomes a Modified Endowment Contract (MEC), and the tax rules change. Many people do this by accident and are horrified. However, a MEC can be used intentionally. Think of it as deciding to turn that barn into a dedicated greenhouse. You lose the easy tax-free access of loans, but you gain a powerful environment for tax-deferred growth, similar to an annuity. For someone who doesn’t need liquidity and wants to maximize growth for later, intentionally creating a MEC can be a brilliant strategic move.
Stop buying final expense insurance from TV commercials. Do use a small whole life policy from a reputable carrier instead.
Don’t Buy Your Car from a Vending Machine.
Those final expense policies advertised on TV are like a product from a vending machine. They are easy to get (no questions asked!), but they’re incredibly overpriced for what you receive, and often have a two-year waiting period where they won’t pay the full benefit. It’s a convenience trap. A much smarter choice is a small whole life policy from a reputable insurance carrier. It’s like going to a trusted car dealership. You may have to answer a few health questions, but you’ll get a far superior product—a policy with better guarantees, lower costs, and immediate coverage—that provides real value and security for your family.
Stop assuming your health rating is set in stone. Do ask for a re-evaluation after making positive lifestyle changes.
You Can Appeal Your Financial Grade.
When you first get a life insurance policy, the company gives your health a grade, like an “A,” “B,” or “C,” which determines your price. Many people think this grade is permanent, like a tattoo. But it’s not! It’s more like a grade on a report card. If you’ve made significant improvements—like quitting smoking, losing a substantial amount of weight, or getting a chronic condition under control—you can ask for a re-evaluation. It’s like going back to the teacher and showing them your new, improved work. If they agree, they can raise your grade and permanently lower your premiums for the rest of the policy’s life.
The #1 secret for business owners is using life insurance to fund a tax-deductible retirement plan.
Turning a Business Expense into a Personal Fortune.
Imagine you’re a business owner. You can set up a special type of retirement plan, like a 412(e)(3) or certain defined benefit plans, that is funded with a combination of life insurance and annuities. Here’s the magic: the premiums you pay are considered a business expense, so they are 100% tax-deductible to the company. This is like the government paying you to build your own personal retirement skyscraper. You get a massive tax break now, while the money grows in a tax-sheltered environment, ready to provide you with a stream of income when you retire. It’s one of the most powerful wealth-building secrets in the tax code.
I’m just going to say it: Your financial advisor who tells you all permanent life insurance is bad is likely ignorant or pushing their own products.
A Carpenter Who Says You Should Only Use a Hammer.
A financial advisor who claims all permanent life insurance is bad is like a carpenter who only owns a hammer. To him, every problem looks like a nail. He can build a few simple things, but he’s completely unable to tackle complex projects. Life insurance is a versatile power tool—it can be a saw, a drill, a sander. It solves problems related to taxes, estate planning, and risk that his simple hammer (stocks and mutual funds) can’t. He either doesn’t know how to use the other tools or he only gets paid for using his hammer, so he convinces you it’s all you need.
The reason your policy lapsed is because you ignored the grace period notice.
The Snooze Button on Your Financial Fire Alarm.
Your life insurance policy is a fire alarm for your family’s financial future. A premium due notice is the “low battery” chirp—a warning to take action. If you miss the payment, the insurance company sends you a grace period notice. This is the alarm itself starting to blare, giving you a final 30-day window to fix the problem. Ignoring that final, loud warning is like hitting the snooze button on a fire alarm while the house is on fire. You’re silencing the one thing designed to save you, and once that grace period ends, the protection is gone, and it’s often impossible to get back.
If you’re a stay-at-home parent with no life insurance, you’re losing sight of your immense economic value to the household.
The CEO of the Household Needs a Key Person Policy.
If a company’s CEO suddenly passed away, the business would suffer a huge financial loss. That’s why they buy “key person” insurance. As a stay-at-home parent, you are the CEO, CFO, and COO of your household. You provide services—childcare, transportation, tutoring, cooking, cleaning—that would cost a fortune to replace. A 2023 survey found this value to be over $190,000 per year. Going without life insurance is like the company deciding their CEO isn’t valuable enough to insure. It’s a massive, unhedged risk that leaves your family’s entire operation vulnerable to financial collapse if the “key person”—you—is suddenly gone.
The biggest lie is that term life insurance is “pure” insurance; it’s a long-term bet you’re designed to lose.
A Casino Game Where the House Almost Always Wins.
Term life insurance is often called “pure” insurance, which sounds simple and clean. But it’s more like a lottery ticket or a long-term casino bet. You are betting the insurance company that you will die within the term. The insurance company, with its teams of actuaries, is betting that you will live. And they are very, very good at setting the odds. Over 98% of term policies never pay a death benefit because people outlive them. You are designed to lose the bet. It’s not “pure” protection; it’s a temporary rental agreement on a financial tool where the landlord is almost certain to get the property back.
I wish I knew that I could sell my term policy for cash through a life settlement.
Discovering Your Old Concert Ticket Is a Collector’s Item.
Most people believe an old term life policy that’s about to expire is worthless, like an old concert ticket stub. They’re ready to just throw it in the trash. But what if that ticket was for a legendary, once-in-a-lifetime show? It might be a valuable collector’s item. Similarly, if your health has changed, your old term policy can become valuable to an investor. Through a life settlement, a third party will actually buy that “worthless” policy from you for cash. It’s like discovering that the ticket you were about to throw away is actually worth a significant amount of money to the right collector.
99% of policy owners make this one mistake: they never review their policy’s performance with their agent.
Never Checking the Gauges on a Cross-Country Flight.
Owning a life insurance policy, especially a Universal Life policy, is like being the pilot of your own small plane on a long-haul flight to retirement. The annual policy review with your agent is your chance to check the instrument panel. Are you on course? Do you have enough fuel (cash value) to make it through potential turbulence (rising costs)? Are the engines (interest crediting) performing as expected? Never reviewing your policy is like taking off and never looking at the gauges again. You’re flying blind, and you might run out of fuel mid-flight without ever seeing it coming.
This one small action of naming a contingent beneficiary will save your family from probate court.
Programming a Backup Destination in Your GPS.
Your primary beneficiary is the main address you plug into your life insurance GPS. But what if there’s an unforeseen accident and both you and your primary beneficiary are in the same car crash? If there’s no backup destination programmed, the delivery (your death benefit) gets lost and sent to the chaotic, expensive mail-sorting facility of probate court. Naming a contingent, or secondary, beneficiary is like programming in that vital backup address. If the first destination is unavailable, the GPS automatically reroutes the package directly to the next intended recipient, keeping it out of the legal black hole of probate.
Use a life insurance policy to pay for college, not a 529 plan, for more flexibility and tax advantages.
A Swiss Army Knife vs. a Single-Purpose Corkscrew.
A 529 plan is like a corkscrew. It’s designed to do one thing very well: open a bottle of wine (pay for qualified education expenses). But what if you decide you want beer instead, or your kid gets a full scholarship? The corkscrew becomes much less useful and can even come with penalties. A cash value life insurance policy is like a Swiss Army Knife. It can be used to pay for college tax-free via loans. But it can also be used for a down payment on a house, to start a business, or to supplement retirement. It offers maximum flexibility without penalties, no matter what life throws at you.
Stop paying for accidental death & dismemberment (AD&D) insurance. Do put that money towards a real life insurance policy instead.
Buying a Seatbelt Instead of a Car.
AD&D insurance is a cheap add-on that only pays out if you die or are dismembered in a very specific type of accident. It’s like buying just a seatbelt. It feels like you have protection, but it will do absolutely nothing for you in the 95% of cases where a crash (death) is caused by something other than an accident, like a heart attack, cancer, or stroke. Instead of spending money on a standalone seatbelt, you should put that money towards buying the whole car: a real life insurance policy. It protects your family from death by any cause, giving them comprehensive protection, not just for a narrow, unlikely scenario.
Stop letting the insurance company hold your death benefit. Do choose a lump-sum payout instead of an annuity.
Take the Treasure Chest, Not the Weekly Allowance.
When a life insurance policy pays out, the company will often encourage your beneficiary to take the money as an annuity—a series of smaller payments over time. They’ll say it’s for “protection.” This is like the insurance company offering to hold onto your massive treasure chest and give your family a small weekly allowance from it. They get to keep and invest your capital. You should almost always choose the lump-sum payout. Take the entire treasure chest yourself. This gives your family full control. They can then decide how to best use and invest it, without leaving their newfound wealth in the hands of the insurance company.
The #1 hack for building generational wealth is cascading policies through multiple generations in trusts.
A Financial River That Never Runs Dry.
Imagine you want to create a source of wealth for your family that lasts forever. The “cascading” strategy is how you do it. First, you buy a large policy on yourself, held in a trust. When you pass, the tax-free death benefit doesn’t get spent; instead, the trust uses it to buy new policies on your children. When your children pass, their larger death benefits are used to buy even larger policies on your grandchildren. It’s like creating a powerful financial river that splits and grows with each generation, irrigating your family tree with ever-increasing, tax-free capital that is protected from creditors and estate taxes forever.
I’m just going to say it: “Infinite Banking” is a powerful concept, but it’s often sold by poorly trained agents.
A Supercar Driven by a Student Driver.
The “Infinite Banking Concept” is a brilliant financial strategy, like a high-performance supercar. It uses the principles of cash value life insurance to create your own private lending facility. When structured correctly by a master technician, it is incredibly powerful. However, the concept has become so popular that it’s often taught and sold by newly licensed agents who are like student drivers being handed the keys to a Ferrari. They don’t understand the complex mechanics of policy design, and they often structure the “car” improperly, leading to poor performance, high costs, and a frustrating experience for the client who was promised a supercar.
The reason your cash value is low is because you’re paying back a policy loan with interest.
Trying to Fill a Bucket with a Hole in It.
When you take a loan from your life insurance policy, you are borrowing money and agreeing to pay it back with interest. Not paying that interest is like drilling a small hole in the bottom of your financial bucket. Every year, the unpaid loan interest gets added to the loan balance, making the “hole” bigger. Meanwhile, your premiums and dividends are the water you’re trying to fill the bucket with. If the loan interest (the water leaking out) is greater than the growth you’re adding, your cash value—the water level in the bucket—will stagnate or even go down over time.
If you’re still thinking you’re too young to need life insurance, you’re losing out on the lowest rates of your life.
Buying Your Financial House at Yesterday’s Prices.
Buying life insurance is a lot like buying a house. The two biggest factors in the price are your age and your health. Putting it off because you’re “too young” is like seeing a perfect house for sale at a great price and saying, “I’ll come back and buy it in ten years.” When you do come back, the price has skyrocketed because you’re older, and you may have developed a health condition that makes the “mortgage” (your premium) even more expensive, or even makes you unable to qualify at all. Buying it when you are young and healthy is locking in the lowest possible price for the rest of your life.
The biggest lie you’ve been told is that you should cancel your life insurance when you retire.
Tearing Down the Fire Station Because the Town Is Old.
Financial gurus sometimes advise you to cancel your life insurance in retirement once the kids are grown and the mortgage is paid. This is like advising a town to tear down its fire station just because all the buildings are now old and paid for. The risk of a fire (a final illness, an unexpected tax bill, the desire to leave a legacy) doesn’t disappear; in fact, it gets higher with age. Your permanent life insurance is the fire station, standing ready with a pool of tax-free cash to handle those final, and often largest, emergencies, preserving your other assets for your spouse and heirs.
I wish I knew that the dividends on a whole life policy are considered a tax-free return of premium.
Getting a Tax-Free Refund from Your Financial Grocery Store.
When a mutual insurance company has a profitable year, it shares those profits with its policyholders in the form of a dividend. Many people think of this like a stock dividend, which is taxable. But it’s not. The IRS views a whole life dividend as a refund for an overpayment of your premium. It’s like your local grocery store, which is a co-op, having a great year and giving you a refund on all the groceries you bought. Because you’re just getting your own money back, it’s not considered income and is therefore completely tax-free.
99% of people make this mistake: they buy a policy without understanding the riders and what they do.
Buying a Smartphone and Only Using It to Make Calls.
A modern life insurance policy is like a powerful smartphone. The core function is the death benefit—the ability to “make a call.” But it comes loaded with amazing apps, which are the policy’s riders. There might be an app that pays you if you get critically ill, one that pauses your premiums if you become disabled, or one that provides long-term care benefits. Most people buy the policy and never learn how to use these incredible, often free, features. They’re paying for a powerful smartphone but only using it as a basic flip phone, leaving immense value on the table.
This one small action of asking about accelerated underwriting will save you weeks of waiting and medical tests.
Using the Express Lane at the Financial Supermarket.
Applying for life insurance traditionally is like going to the supermarket on a busy Saturday. You have to go down every aisle, fill a huge cart, and then wait in a long line for a full medical exam and lab tests. It can take weeks. Accelerated underwriting, however, is the self-checkout express lane. By allowing the insurance company to digitally access your existing medical and prescription records, you give them the information they need almost instantly. If you’re healthy, you can be approved in days, or even minutes, skipping the needles and the long wait. It’s the fast pass to getting your family protected.
Use a combination of term and permanent insurance, not an “all-or-nothing” approach.
Building Your Financial House with Both Bricks and Mortar.
Deciding between term and permanent life insurance shouldn’t be an “all-or-nothing” battle. The smartest approach is to use both, like building a house with different materials for different jobs. You use strong, permanent bricks (whole life insurance) to build the foundation and core structure of your house—things you’ll need forever, like final expense coverage and retirement income. Then, you use flexible, less expensive mortar and wood (term insurance) for the temporary structures, like the mortgage and college funding, that you won’t need after 20 or 30 years. It’s about using the right tool for the right job.
Stop disclosing minor, temporary health issues on your application. Do be honest about chronic conditions instead.
Tell the Fireman About the Gas Leak, Not the Burnt Toast.
A life insurance application is not a confession of every sniffle you’ve ever had. The underwriter is a fireman trying to assess the real fire risk of your house. You absolutely must tell them about the faulty gas line in the basement (chronic conditions like diabetes or heart disease). Hiding that is fraud. However, you don’t need to volunteer the story about the time you burnt the toast and the smoke alarm went off for a minute (a minor cold or a sprained ankle from five years ago). Focus on being transparent about the significant, ongoing risks and don’t muddy the waters with trivial, resolved issues.
Stop thinking your group life insurance is enough. Do realize it’s usually only 1-2x your salary.
Trying to Cross the Ocean with Only a Life Vest.
Relying on your employer’s group life insurance as your only protection is like trying to cross the Atlantic Ocean with nothing but a life vest. If your financial ship goes down, that life vest—typically only one or two times your annual salary—will keep your family’s head above water for a year or two. But it’s nowhere near enough to get them safely to a new shore. It won’t be enough to pay off the mortgage, fund college, and provide income for the decades to come. It’s a temporary flotation device, not a long-term survival craft.
The #1 secret your agent won’t tell you is how their commission is structured on the policy they’re selling.
Asking the Chef if He Gets a Bonus for Selling the Fish.
Imagine you’re at a restaurant and the chef passionately recommends the fish special. It sounds great, but what you don’t know is that the restaurant owner offered a huge cash bonus to whichever chef sold the most fish that night because it’s about to go bad. The same can be true for life insurance. An agent might passionately recommend a certain policy, but they may not tell you that this specific product pays them a much higher commission than a different one that might be better for you. Understanding how your “chef” is paid helps you know if they’re recommending the fish because it’s truly the best dish, or for other reasons.
I’m just going to say it: A life insurance medical exam is a free health screening you should take advantage of.
A Free Look Under the Hood of Your Own Health.
People often dread the life insurance medical exam, viewing it as an invasive hassle. That’s the wrong perspective. You should see it as a free, comprehensive health check-up that comes to your house. A medical professional will check your blood pressure, cholesterol, liver and kidney function, and a host of other important markers, and you can get a copy of the results. This is a multi-hundred-dollar value, completely for free. It gives you a valuable snapshot of your current health, which you can take to your own doctor. It’s not a test to be feared; it’s a wellness benefit to be embraced.
The reason your premium is so high is your family’s health history, not just your own.
You Inherited Your Financial House’s Architecture.
Even if you are in perfect health, you might get a surprisingly high life insurance quote. Why? Because underwriters are not just looking at you; they are looking at the blueprint of your genetic house. If your parents or siblings had a history of certain hereditary conditions like heart disease or cancer at an early age, it’s like having a house that was designed with a higher risk of fire. The insurance company sees that risk in your genetic blueprint and has to charge a higher premium to cover the potential for that inherited risk to emerge down the road, even if you are perfectly healthy today.
If you’re a business partner without a key-person insurance policy, you’re losing protection against your partner’s sudden death.
The Co-Pilot Who Doesn’t Insure the Pilot.
Running a business with a partner is like flying a two-person plane. Each partner is a pilot, critical to keeping the plane in the air. A “key-person” policy is simply the insurance you take out on the other pilot. If your partner—the one who handles all the sales or the technical operations—were to suddenly die, the business plane would immediately nosedive. The death benefit from the key-person policy is the financial parachute. It injects immediate cash into the business, giving you the time and resources to hire a replacement and keep the business flying, instead of crashing to the ground.
The biggest lie you’ve been told is that all life insurance policies are the same.
A Car Is Not Just a Car; A Ford Is Not a Ferrari.
Saying all life insurance policies are the same is like saying all cars are the same. It’s technically true that they are all forms of transportation, but it’s a ridiculously unhelpful statement. A 20-year term policy is a Ford Taurus—reliable, basic transportation for a specific period. A whole life policy is a Mercedes-Benz—engineered for a lifetime of performance, with luxury features and built-in value. A variable universal life policy is a temperamental Ferrari—it can offer thrilling performance but comes with high risk and maintenance. They are fundamentally different tools designed for completely different jobs and financial goals.
I wish I knew that I could use my life insurance cash value to supplement my retirement income tax-free.
Installing a Private, Tax-Free Water Spigot in Your Retirement Home.
As you build up cash value in a permanent life insurance policy, you’re essentially building a large reservoir of water behind the walls of your financial house. When you retire, you need a way to get a drink without causing a flood or alerting the “water tax” man. Instead of taking taxable withdrawals, you can take tax-free loans against your cash value. It’s like you installed a special, private spigot in your kitchen. You can turn it on whenever you need a stream of tax-free cash to supplement your other retirement income, all while the main reservoir behind the wall continues to grow.
99% of people make this mistake: they name their estate as the beneficiary, forcing the death benefit into probate.
Sending Your Inheritance on a Detour Through the DMV.
Naming your “estate” as the beneficiary of your life insurance is like addressing a critical, time-sensitive package to “Central Processing” instead of a specific person. The package, which is your death benefit, won’t go directly to your family. Instead, it gets rerouted to the legal equivalent of the DMV: probate court. There, it will sit for months, or even years, getting tangled in red tape, having fees taken out, and becoming public information before it’s finally delivered to your heirs. Naming a specific person or a trust ensures the package is delivered directly to their doorstep overnight.
This one small action of setting up automatic payments will ensure your policy never lapses due to a missed payment.
Putting Your Financial Fire Protection on a Sprinkler System.
Your life insurance policy is the fire protection for your family’s financial house. Paying the premium manually is like relying on yourself to always be there with a fire extinguisher. You might forget, be on vacation, or be in the hospital when the fire starts. Setting up automatic payments is like installing a sprinkler system. It’s a “set it and forget it” system that guarantees the protection is always on, 24/7. It completely removes the risk of human error, ensuring that a simple, preventable mistake like a missed payment doesn’t allow your family’s financial security to go up in smoke.
Use a graded-benefit policy if you have serious health issues, not assuming you’re completely uninsurable.
A Probation Period for Your Life Insurance.
If you have significant health problems, you might think you’re locked out of the life insurance building entirely. But there’s a side door called a “graded-benefit” policy. It’s like a probationary hiring period. For the first two or three years, if you pass away from natural causes, your beneficiaries only get the premiums you paid back, plus some interest. But after you’ve “passed” that two-year probation, you are fully “hired,” and your beneficiaries will receive the full, tax-free death benefit. It’s a way for the insurance company to provide valuable coverage while managing the immediate risk.
Stop listening to your brother-in-law’s advice on life insurance. Do consult with a licensed professional instead.
Don’t Ask Your Plumber to Do Your Brain Surgery.
Asking a well-meaning but unqualified relative for financial advice is like asking your plumber for his opinion on your upcoming brain surgery. He might have seen a documentary about it once and have lots of confident opinions, but you would never let him near you with a scalpel. Life insurance and financial planning are complex fields. A licensed professional is the trained surgeon who has spent years studying the intricacies of the craft. They have the right tools and the expertise to design a plan that will actually work, saving your family from the disastrous consequences of well-intentioned but amateur advice.
Stop putting off buying life insurance. Do realize the cost only goes up with age and declining health.
The Clock Is Ticking on Your Best Price.
Delaying the purchase of life insurance is like standing in front of a store with a big sign that says, “Sale Ends Today! Prices will be higher tomorrow, and we might run out of stock.” Every single day you wait, you get a day older, and the price on the tag goes up permanently. Even worse, every day you risk a health issue popping up that could make the item “out of stock” for you forever. There is no better time than right now to lock in the lowest price and guarantee your eligibility. The sale is on today; tomorrow it will be more expensive.
The #1 hack for a quick payout is having a clear, undisputed beneficiary designation.
Paving a Superhighway for Your Family’s Money.
Think of the life insurance claims process as a journey your money must take to get to your family. A messy beneficiary designation—like naming “my children” without specifics, or still having an ex-spouse listed—is like sending the money down a dirt road full of potholes, detours, and toll booths. It will get stuck in legal traffic jams for months. A clear, specific, and up-to-date beneficiary designation—naming “Jane Smith, wife,” with her social security number—is like paving a six-lane superhighway. The money travels directly and immediately to its destination with no delays, arriving in days instead of months.
I’m just going to say it: You should own your own life insurance policy, not have your spouse own it.
Hold the Keys to Your Own Financial Car.
Having your spouse own your life insurance policy is like letting them hold the only set of keys to your car. It might seem fine, but what happens in a messy divorce? They can cancel the policy, change the beneficiary, or refuse to give you ownership, leaving you without coverage. By owning the policy yourself (with your spouse as the beneficiary), you always hold the keys. You control the destination, you decide who the passengers are, and you can ensure that no matter what happens in your relationship, this critical financial vehicle remains in your garage, ready to protect the people you intend it to protect.
The reason you’re confused about life insurance is because the industry uses intentionally complex jargon.
A Restaurant Menu Written in a Foreign Language.
Imagine walking into a restaurant, and the entire menu is written in a language you don’t understand. You’re hungry and you know you need to eat, but you have no idea what to order. You’d feel confused, intimidated, and might just order the first thing you see out of frustration. This is what the life insurance industry often does with its jargon—”premiums,” “dividends,” “sub-accounts,” “riders.” It’s an intentionally complex menu designed to make you rely on the waiter (the agent) to order for you. The key is to find an advisor who is willing to translate the menu into plain English.
If you’re still paying for a policy you no longer need, you’re losing the opportunity to cash it out with a life settlement.
That Old Painting in Your Attic Could Be a Masterpiece.
Many people have an old life insurance policy sitting in a drawer, one they no longer need or want. They keep paying for it, or are thinking of just stopping payments and letting it go. This is like having an old, dusty painting stored in your attic that you think is worthless. But you should get it appraised first! A life settlement is a financial art appraiser. They can tell you if your “old painting” has hidden value to an investor. You might discover that the policy you were about to throw away is actually a masterpiece that someone is willing to pay you a significant amount of cash for.
The biggest lie is that the cash value in your whole life policy is the company’s money and you can’t touch it.
Your Money Is in a Vault, and You Have the Key.
A common myth is that the cash value in your policy belongs to the insurance company until you die. This is completely false. Think of your cash value as your own money stored in a high-security vault at a private bank (the insurance company). Not only can you access it whenever you want via tax-free loans, but you get to use the bank’s money while your own money remains safely in the vault, earning interest. You have the key. It’s your asset, listed on your personal balance sheet, and it’s one of the most secure and accessible assets you can own.
I wish I knew that permanent life insurance is an asset class that performs well in volatile markets.
The Anchor in Your Financial Portfolio’s Storm.
Imagine your investment portfolio is a ship on the ocean. The stock market is the wind in your sails—it can propel you forward quickly, but it can also create violent, stomach-churning storms that threaten to capsize you. The cash value in a permanent life insurance policy is the heavy, stable anchor of your ship. When the market storms rage and your other investments are being tossed around, the anchor holds firm, providing guaranteed growth and stability. It’s the asset class that lets you sleep at night, knowing that a portion of your wealth is completely shielded from market volatility.
99% of people make this mistake: not understanding the “free look” period where they can cancel for a full refund.
The 30-Day Test Drive for Your Financial Car.
When you buy a life insurance policy, you’re not locked in the second you sign the papers. Every policy comes with a “free look” period, which is typically 10 to 30 days. This is your no-risk, money-back guarantee. It’s like being able to take a new car home from the dealership and drive it for a month. You can read the owner’s manual (the policy contract), take it for a spin, and if you find anything you don’t like, you can return it for a full, no-questions-asked refund. It’s a critical consumer protection that most people don’t even know they have.
This one small action of reading your policy’s annual statement will tell you everything you need to know about its health.
Your Policy’s Annual Physical Exam Results.
Your life insurance policy is a living financial asset, and just like you, it needs a check-up. The annual statement that the company mails you is the detailed report from your policy’s yearly physical. It tells you its current vitals: how much cash value it has, how much the internal costs were, how much growth it experienced, and if there are any warning signs. Spending 15 minutes reading this one document is the single most important thing you can do to monitor its health and ensure it’s on track to perform as you expected for the long term.
Use a policy review to identify underperforming assets within your variable universal life contract.
Weeding the Garden Inside Your Life Insurance Policy.
A variable universal life (VUL) policy is like a special greenhouse where you can plant various investment funds (sub-accounts) to grow your cash value. Over time, some of those plants might become unhealthy weeds, underperforming and dragging down the growth of your entire garden. A policy review with your advisor is your opportunity to go into the greenhouse and do some gardening. You can identify which funds are the “weeds” and reallocate that capital to the healthier, better-performing plants, ensuring your cash value garden remains vibrant and productive.
Stop letting your dividends buy more term insurance. Do use them to buy paid-up additions to accelerate cash growth instead.
Stop Renting More Space; Start Building More Equity.
When your whole life policy pays a dividend, you have a choice. Using it to buy more term insurance is like using your profit to rent a small, temporary storage shed next to your house. It gives you a little more space (death benefit), but you build no long-term value. Using your dividends to buy paid-up additions (PUAs) is like using that same profit to build a permanent, equity-rich addition onto your actual house. Each PUA purchase immediately increases your cash value and your death benefit, and it starts earning its own dividends. It’s the turbo-charge button for your policy’s growth engine.
Stop assuming your life insurance is only for after you die. Do use the living benefits for chronic, critical, or terminal illness instead.
Your Fire Extinguisher Can Also Be a First-Aid Kit.
Most people think a life insurance policy is a fire extinguisher in a glass box: “Break only in case of death.” But modern policies are much more. They now come with a built-in first-aid kit called “living benefits.” If you are diagnosed with a serious illness like cancer, a heart attack, or stroke, you can “open the kit” and access a significant portion of your death benefit while you are still alive. This tax-free cash can be a financial lifesaver, allowing you to pay for treatment, cover lost income, and focus on recovery without destroying your family’s finances.
The #1 secret to passing a medical exam is to schedule it for the morning, fast, and avoid caffeine and alcohol.
Stacking the Deck for Your Health Snapshot.
A life insurance medical exam is a snapshot of your health on one particular day. To make sure it’s the most flattering picture possible, you need to prepare. Think of it like a photo shoot. Schedule it for first thing in the morning when your body is in a rested state. Fast for at least 8 hours beforehand to ensure clean bloodwork results. For 24 hours prior, avoid caffeine, alcohol, and strenuous exercise, as they can temporarily elevate your blood pressure and other readings. This simple preparation is the secret to presenting the best, most accurate version of your health to the underwriter.
I’m just going to say it: The person who sold you your mortgage insurance at the closing table was not an insurance expert.
The Cashier Who Sold You a Warranty on Your Groceries.
When you buy a house, the lender will often push you to buy mortgage protection insurance right there at the closing table. The person selling it is usually a loan officer, not a licensed insurance professional. This is like the cashier at the grocery store trying to sell you a complex extended warranty on your carton of milk. They don’t know the fine print, they can’t compare it to other options, and they are motivated by a quick add-on sale. This product is almost always a bad deal compared to a real term life policy from a dedicated, professional agent who can actually give you expert advice.
The reason your policy illustrations look so good is because they often use unrealistic, non-guaranteed assumptions.
A Vacation Brochure Full of Photoshopped Sunsets.
A life insurance illustration is the travel brochure for your policy’s financial journey. The agent can show you beautiful pictures of where your cash value could be in 30 years. The problem is, these pictures are often heavily photoshopped. They might use assumptions of high interest rates and low costs that are not guaranteed. It’s like a brochure for a resort in a rainy location that only shows pictures of the one sunny day they had last year. You should always ask to see the “guaranteed” page of the illustration—that’s the real, un-photoshopped picture of the worst-case scenario.
If you still think Social Security will take care of your family, you’re losing touch with reality.
A Leaky Life Raft in the Middle of the Ocean.
Relying on Social Security survivor benefits to be the sole provider for your family is like finding yourself in the middle of the ocean after your ship has sunk and thinking a leaky, child-sized life raft will get you and your whole family safely back to shore. The benefits are incredibly modest—the average for a spouse with two children is only around $3,500 a month—and they come with complex rules and limitations. It’s a minimal, short-term survival tool, not a comprehensive plan. It will barely keep your head above water, and it’s certainly not a vessel that can carry your family to a secure financial future.
The biggest lie you’ve been told is that life insurance is a morbid topic to discuss.
It’s Not about Death; It’s about a Love Letter to the Living.
People avoid talking about life insurance because they think it’s about planning for death. That’s looking through the wrong end of the telescope. Life insurance isn’t about dying. It’s about what happens to the people you love after you’re gone. It’s the ultimate act of responsibility and the final love letter you will ever write to your family. The conversation isn’t about the morbid details of your passing; it’s about a beautiful vision for their future—a future where the mortgage is paid, college is funded, and their lives can continue with dignity and without financial struggle.
I wish I knew that I could attach a long-term care rider to my life insurance policy instead of buying a separate one.
The Financial Multi-Tool That Saves You Money.
As you get older, the potential need for long-term care is a huge financial storm cloud on the horizon. Many people buy a separate, expensive long-term care (LTC) policy to prepare for it. A smarter, often more affordable, way is to add an LTC rider to your permanent life insurance policy. It’s like buying one high-quality multi-tool instead of two separate, clunky tools. If you need care, you can access your death benefit while you’re alive. If you don’t end up needing care, your family receives the full, un-touched death benefit. It’s an efficient way to solve two problems with one elegant solution.
99% of people with old policies make this one mistake: not reviewing them to see if new products offer better features for the same price.
You Wouldn’t Keep a 20-Year-Old Cell Phone, Would You?
Imagine you were still using a cell phone from the year 2003. It’s big, clunky, the battery life is terrible, and it can only make calls. You would never do that, because modern smartphones offer vastly superior technology and features for a comparable price. Yet, millions of people do this with their life insurance policies. Products designed today are more efficient, have lower internal costs, and come with powerful new features like living benefits. An independent agent can review your old “brick phone” policy and see if you can upgrade to a new “smartphone” policy, often getting more coverage and better features for the same or even a lower premium.
This one small action of creating a document for your family explaining your policy will save them immense stress.
Leaving a User Manual for Your Financial Legacy.
You wouldn’t buy a complex piece of equipment for your family and then hide the instruction manual. Yet, that’s what most people do with their life insurance. In the midst of their grief, your family is left to become detectives, hunting for policy documents and trying to figure out who to call and what to do. The simplest gift you can leave them is a “letter of instruction.” A simple document, kept with your will, that lists the policy number, the insurance company’s contact information, and your agent’s name. This one small action turns their frantic, stressful search into a simple, clear set of instructions.
Use a split-dollar arrangement for executive compensation, not just bonuses, for incredible tax benefits.
The Ultimate Executive Golden Handcuffs.
A split-dollar arrangement is a powerful way for a business to reward a key executive. Imagine the company and the executive want to build a financial skyscraper (a large cash value life insurance policy) for the executive’s future. The company agrees to pay for the “bricks” (the premiums). In return, the company gets its money back from the death benefit, while the executive’s family gets the rest. The best part is the tax magic: the executive receives this massive benefit but only has to pay a tiny tax on the “economic benefit,” not the full premium payment. It’s a tax-efficient way to provide a huge benefit that also ties the executive to the company for the long term.