Life Insurance Loans Are NOT Income

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Welcome to Shooting and Straight with

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Stan. I'm your host Stan the Annuity

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Man. America's annuity agent licensed in

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all 50 states. Today's topic is a very

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good one. I want you to listen closely.

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Life insurance loans are not income. Let

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me start with a basic question. When you

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go to the bank and you get a loan, is

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that income yes or no? Of course not.

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It's not income. It's a loan. You're

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paying interest on that. When you buy a

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life insurance policy

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and you take money out in a loan format,

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is that income yes or no? And if there's

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anyone out there that says yes, let me

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go backwards again. When you go to a

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bank and you take money out as a loan,

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is that income yes or no? Of course,

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it's not. So, the same thing applies to

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life insurance and these really slick

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sales pitches out there that say, "Hey,

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look at this uh look at this tax-free

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income that you're getting. It's a loan.

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All loans are tax-free because it's a

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loan."

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I get so tired of the industry playing

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word games, semantic superstars out

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there that that twist things to where

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you say, "Well, that's that's a pretty

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good deal. All that lo all that is

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tax-free. It's a loan."

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Okay. My opinion and and and I'm Stan

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the annuity man that represents all

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carriers. Life insurance companies sell

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annuities. So, I'm familiar with life

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insurance and I'm a huge fan of life

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insurance and I have a huge amount of

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life insurance on myself that my wife

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and my two young no young anymore two

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daughters will benefit from.

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But to me, life insurance should be as

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simple as when you buy an annuity. You

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should be able to explain it to a

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nine-year-old. No offense to 9year-olds.

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Okay? So, life insurance to me is level

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term or term life. No moving parts, no

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market attachments, no index, none of

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that nonsense. The the cheapest of you

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with life insurance. I'm I'm stuttering

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just a little bit because I'm so

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excited. With life insurance, you buy

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the most death benefit you can for the

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least amount of money. It's that simple.

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Once you start getting fancy with all

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those internal things, all the shiny

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things, and all of the sales pitch

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things, then all you're doing is buying

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your agent or advisor a really nice car

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with a with the high commissions that

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are built into that product.

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Do not believe that you're buying a life

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insurance policy that produces tax-free

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income. It it just doesn't exist.

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Taxfree income is taxfree municipal

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bonds. Okay? Taxfree income is if you

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buy an immediate annuity inside of a

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Roth IRA. That's taxfree income. Taxfree

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income isn't I'm going to take a loan

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from this life insurance policy that

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Johnny Apple Seed agent told me that was

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taxfree income. Oh, by the way, yes, I'm

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paying interest on that and yes, there

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are fees inside of that policy. And even

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though Johnny Apple Seed agent said,

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"Hey, um it's all going to work out good

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because the growth from that policy is

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going to offset all the all the fees."

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Uh no. Uh it doesn't work like that. And

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in fact, if you're really if you're

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saying, "Stan, I don't believe you. I

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don't believe you. I've seen these dudes

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on the internet. I went to the state

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dinner seminar at the Ruth Chris and

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this person told me, "I don't believe

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you." Okay, great. Walk in or tell talk

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to this person.

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run the proposal at zero. Now, they're

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going to say, "Well, we're not going to

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do that because, you know, in the past,

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the back tested numbers were 7 8 9 10%."

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Sir, you say, "Humor me. Humor me. Run

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it at zero." And run it at zero for the

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life of the policy. Okay? Run it at

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zero. See what happens. The policy will

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eat itself up from the inside out.

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Life insurance is for a tax-free death

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benefit for benefit for your

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beneficiaries. Period. End of story.

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Life insurance can be used for long-term

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care.

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It can there's there's that's an

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assetbased probased program that has a

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long-term care component in that.

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But life insurance is not tax-free

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income. They don't go together. It's

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apples and oranges. It's oil and water.

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that for some reason people are getting

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sold that I ran across a guy the other

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day called me and had bought four

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policies, four insurance policies and he

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thought he was getting taxfree income. I

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said and and he didn't believe me. I

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said, "Okay, great. You don't believe

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me. I'm staying in the union man. I got

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decades of experience." I said, "Call

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the carrier and ask them if that's

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taxfree income or a loan." Well, the

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call back two days later was, "Stan,

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that's a loan. You think, player?" Of

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course it is.

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Remember, if it sounds too good to be

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true, it is every single time. And

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you're going to hear some things out

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there in the hinterlands of the life

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insurance and annuity sales world that

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are incredible. Sounds too good to be

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true. My mama owns this. My uncle owns

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this. All my clients do this. Who cares?

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It's about you. Okay? If it sounds too

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good to be true, it is every single time

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without exception. With life insurance

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and annuities, you buy them for the

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contractual guarantees of the policy.

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Period. Not some hypothetical

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theoretical nonsense. Unicorn snakes and

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the butterflies, but I have to address

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this because it is

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the people pitching this. Oh my gosh, I

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don't even know how they do it. I don't

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know how they do it. You know, as my

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grandfather told me a long time ago, if

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you tell the truth, you don't have to

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remember anything. That's our business

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model here. Okay,

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[sighs and gasps]

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that's shooting a straight with Stan. My

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name is Stan the Annuity Man. See you

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next time.