What Your Advisor Doesn’t Know About Whole Life CAN Hurt You

(Contributed by Rose Hillbrand, Bank On Yourself User, Eagle Financial Solutions Employee)

One of the challenges we face as a company that teaches an “unconventional” strategy such as Bank On Yourself is the conflicting advice that our clients get from other advisors and the mainstream media. The Bank On Yourself concept is quite a paradigm shift for many, so it is understandable that sometimes people can feel confused by the different options.

There are a few things to keep in mind when making any financial decision, such as:

  1. 1. Is this thing for real?
  2. 2. And can I trust the person giving me this advice? (And often we are asking the wrong person anyway.)

However, perhaps the biggest question to ask yourself is:

“Is this right for me?”

Bank On Yourself may not be right for everyone. If you have no cashflow and need all the assets you have just to live on, or if you live way beyond your means, the B.O.Y. concept might not be feasible for you (at least right now). In some rare cases, health problems or other personal circumstances may pose an issue.

But in general, we believe the Bank On Yourself concept should be a very important piece of most financial plans, as it provides guarantees, flexibility, liquidity and predictable growth not found in any other financial vehicle available today. (See question #1 above.)

And, in case you were wondering, we put our money where our mouth is! Every single one of our advisors has at least one Bank On Yourself policy themselves (most have several), and 90% of our staff does as well. (See question #2. 🙂 )

So if you have another advisor who is telling you to invest with them, and stay away from Bank On Yourself, you may want to ask them where they have THEIR money!

Something you may not be aware of is that pretty much all major banking institutions have a HUGE amount of cash value life insurance in their portfolios. (See Barry J. Dyke’s expose’ on this in his well-researched book, The Pirates of Manhattan, pgs. 148-156.) But your broker or advisor of course won’t tell you this (it’s not necessarily their fault – they might not even know, themselves).

If your advisor is also a broker affiliated with Citigroup, JPMorgan Chase, HSBC Holdings, Bank Of America, Wells Fargo, Washington Mutual, US Bank, PNC Bank, Fifth Third Bank, or just about any other large banking institution (in 2007 there were over 4,000 banks investing in BOLI – or Bank-Owned Life Insurance), do a little digging and see if you can find out where their financial holdings are. For example, in 2006, Wachovia’s cash values held in life insurance totaled nearly $13 Billion (yes, that’s BILLION – with a “B”)*. (And it’s certainly a lot more than that today, with the recent economic instability.)

Then ask your advisor – “If the company you work for owns $$$$ (billion dollars) in whole life insurance, why do you think it’s such a bad investment?”  Then come back and post a comment below – we’d love to know what he/she says!

* Dyke, Barry James. The Pirates of Manhattan, page 153. Hampton, NH:  555 Publishing, Inc., 2008.

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