And I unfortunately see it all the time. That is what inspired me to write this short article: so that I could help others before they make this costly mistake. For the price of buying me a beer, you can potentially save thousands of dollars.
The people who make this mistake may be losing $10,000 or more and don’t even know it. That estimate is on the low end of the range for some of the policies I review. One client recently had committed to a policy that was going to lose about $90,000 of his money over the first 10 years of the policy! That’s outrageous. He didn’t know it was happening and, frankly, I don’t think the agent who wrote the policy even knew the damage he had done.
I’m sure those agents mean well, but designing a policy for maximum cash value is not as simple as you might think. Most agents sell death benefit protection, not cash value accumulation.
Life insurance is a powerful financial tool, but understanding what is going on under the hood is an integral part of making sure that the client is not wasting their money on a policy that does not meet their needs and, worse, may cost them tens of thousands of dollars in unnecessary fees and commissions.
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