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Years ago, one of my clients called me up and said "Brent, you're a pretty good bullshitter" before asking me for a favor that had nothing to do with insurance or investments.
He wanted me to call his competitors to find out their prices without his name and number showing up on their caller ID.
I had my assistant make the calls, but that's neither here nor there. Mission accomplished.
I later asked him what he meant, and he clarified that I was good at talking to strangers, not that I was full of it when talking about insurance. That was an important distinction.
 During my first year in the business, I was helping my clients obtain policy loans for various purposes. I remember the first one: He needed new dentures and Medicare didn't cover it. He took out a $600 loan and set up a payment plan to get his policy "full up again" before that next dividend was due. He might have only had a high school diploma, but when he "updated" his participating whole life via an offer from the home office to add variable interest rate loans in exchange for a higher dividend schedule, he'd actually read the letter and understood that his policy would perform better if he paid his loan off sooner rather than later, and not let interest accrue. I didn't know what Infinite Banking was at that time, and Nelson Nash's classic first edition wasn't even published yet. Policy loans have been around since even before Elizur Wright became the very first insurance commissioner. We all forget that a LOT of life insurance was SOLD BY BANKS for this very reason: Collateral for loans!
During my first years, I sold a lot of life insurance where the cash value buildup was going to be used for some form of retirement income in the future, either through the annuity feature (a Standard Non-Forfeiture option that's been around since the 1860s, thank you Elizur Wright!) or from surrenders to basis followed by loans (which are currently tax-free as long as the policy matures as a death claim), as well as all kinds of strategies to offset premiums using policy values (we used to call this "vanishing premiums" but now we call it something else, even though the strategies never changed). I didn't even know what Section 7702 was back then. LIRP (Life Insurance Retirement Plan) wasn't a common term yet. IUL (Indexed Universal Life) hadn't been invented. We still had Equity Split Dollar, Section 162 Executive Bonus, and Nonqualified Deferred Compensation plans, but we talked about "tax advantages" and "tax efficient" rather than "tax-free" because sophisticated clients and their sophisticated accountants and attorneys knew full well that loans had to be paid back at some point, even if that point in time was the death of the insured. Back then we didn't have Overloan Protection riders, so policy management to avoid the "Phantom Income 1099" was an issue that could not be ignored, and good agents made sure that clients, their accountants, and attorneys, understood this.
On this policy loan topic: I had an orphan policy owner on a waiver of premium claim for disability who had taken a large loan many years previous, he had never paid any of it back, and his policy was about to implode (expire without value) with more than a $50,000 gain to be reported as taxable to the Internal Revenue Service. His cost basis was nearly zero because he'd gone on claim during the second policy year, so almost all his cash value was untaxed gain. I have met the elephant here, so I'm acutely aware of how this stuff works, much more so than so many other agents who only know theory from a book they skimmed or a website they scraped.
I delivered my first death claim on a policy I wrote during my freshman year as a full-time agent, only six months after the policy was issued. Since then, I've delivered hundreds of death claims of all sizes. I've also helped many insureds file claims for waiver of premium for disability. I've helped countless policy owners obtain loans, surrender dividends, change dividend options, pay off loans, effect 1035 exchanges, and exercise standard non-forfeiture options such as Life Annuity for retirement income and Reduced Paid-Up insurance to eliminate premiums while keeping coverage inforce for life.
I think life insurance is good enough on its own. I don't need to make up stuff to sell it.
This is why I'm annoyed when I see amateur agents advertising on social media making claims about Babe Ruth using a "TFRA" for his wealth (they made this term up: Tax Free Retirement Account, or TFRA, no such animal exists in the Internal Revenue Code in any state insurance law). First, this is patently false. Babe Ruth used annuities during his retirement. Second, nonqualified annuities are not tax-free, and they should never be called anything other than what they are. There are laws against this kind of false advertising, and for good reason. Doing a little bit of "research" I ferreted out the truth: These agents are using Babe Ruth to fabricate a lie to peddle Indexed Universal Life. Shame, shame! Bait and switch is bad for car dealers, it's bad for politicians, and it's just as bad for insurance agents. Please, agents, DO NOT MAKE FALSE CLAIMS IN ADVERTISEMENTS! (or anywhere else, for that matter)
I'm also annoyed when I take a first glance at some agent's website and read Bovine Scat like this: "Previously, wealth-building life insurance policies were used by the wealthiest 1%." Again, this is patently false. The only source of this bullshit claim is other websites published by other bullshitters (although you won't find a citation since they all "scrape" their ideas from each other).
Mutual life insurance companies advertised the savings, investment, and banking benefits of life insurance contracts as early as the 1840s, and their target market was the middle class. In the 1860s, cash-value life insurance was touted in newspapers and advertisements as the savings vehicle for ENTRY to the middle class. In 1870, fully one-third of Americans owned cash-value life insurance, and it was the single most common investment outside of the primary residence or farm. Often, it was the ONLY savings plan other than bank deposits (unregulated at that time, no federal bank "insurance" back then) and grain stores in silos or livestock on the hoof (these all have relatively short lifespans with no guarantees of profit or return on investment). There were no mutual funds back then. Real property, bank deposits, and life insurance contracts were the financial foundation for people of modest means up to the top of the socioeconomic ladder. Life insurance for wealth building was never just for the top 1%.
In the year 1900, over HALF of American's savings were in life insurance contracts, including whole life insurance, endowments, tontines, and annuities. The Armstrong Investigation from 1905 was partly because so many Americans had so much of their excess capital tied up in life insurance contracts that the government was forced to intervene by activist citizens to protect their savings from foolish spendthrifts and predatory vultures that had infected certain companies (this has all happened before, it's happening now, and it will happen again, which is why we must always be vigilant, and avoid reliance on government agencies for protection).
PLEASE NOTE: The Armstrong Investigation didn't happen because of government bureaucrats acting on their own initiative. It happened because regular people like you and me, the middle class, wrote letters to their newspaper editors, which resulted in journalists investigating claims by citizens, and then writing articles exposing and condemning the poor stewardship of policy owner money by certain bad actors.
A couple of bits of wisdom worth remembering:
- If it sounds like bullshit, if it smells like bullshit, it's probably bullshit
- Life Insurance can be a very poor investment, especially if you lapse your policy in the first few years
- Life Insurance owned for a lifetime is often one of the best investments the policy owner ever made
- Don't believe these noobs on social media trying to bait you into clicking with their Bovine Scatology lies
Agents: Before you make up lies to sell life insurance, you might want to pick up a history book first.
Sources for these bits of history include:
Investing in Life: Insurance in Antebellum America, by Sharon Murphy
Marketing Life Insurance: Its History in America, by J. Owen Stalson
Morals and Markets: The Development of Life Insurance in the United States, by Viviana A. Rotman Zelizer
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