financial products people that financial products are kind of like attorneys there’s enough bad ones out there that makes the good ones kind of get lost in the mud and it’s very true if you’re a financial advisor and you don’t want a client to take an action out an annuity or life insurance product for example what you’ll do is you’ll just confuse them with either other similar products or with fears so that they say no and stay put you know if you see a life insurance policy that Is really good at accumulating tax free sources of money but it’s a little slow on the death benefit in exchange or you’re going to show your client is hey I can get you a better death benefit from those premiums are paying to cut your premiums and half we’re going to double your death benefit their clients going to well why did that snake oil salesman of other life insurance guy tried to sell me this policy and the truth is when you’re in that seat as a consumer you need to remember this one Golden rule here is the Golden rule to remember when you’re buying any financial product why that is simple enough rule for you why let’s expand why are you buying this product is it for a death benefit is it for tax efficiency is it for guaranteed future income is it to give charitably in other ways to pay a future tax bill what is the purpose with this financial product that you’re trying to achieve if it’s just something that somebody is telling you you should need and you’re not convinced yourself absolutely you should not do it ’cause financial products are this they are a contract as an attorney I review all sorts of contracts including annuities and life insurance products and here’s what I can tell you they are confusing alot of them are bad their fees are structured in a way that the company advisor will always win and you at the expense of your money they’re full of outs where they can get out anytime So what I say is the more boring a financial product is the better it likely is for you less bells and whistles it has the cheaper it’s going to be and the better guarantees are going to be able to get for yourself now guarantees in the financial world are not cheap if you want to guarantee you’re going to have to pay for it think about term life insurance for example what’s the guarantee in a term life insurance policy it’s that if you pay your premiums we guarantee will give you a death benefit if you die before a certain time is up within a certain term right now that’s that’s kind of easy guaranteed for life insurance make because they had actuaries that they paid to figure out not when you specifically will die but when men or women of a in your age range will die so that they’ll come out ahead if they sell thousand policies they’re going to win on 900 of them probably more so that’s they do the premiums cheap death benefits great because they know their guarantee is 90% or more that I’m never going to have to payout now if you think about a whole life policy this is your boring old insurance policy says if you pay these premiums we will guarantee a death benefit for you whenever it is that you die and if you had a guarantee that will guarantee that this death benefit increases with our company’s profitability and will guarantee that we keep a pile of money available to you tax free anytime you want what are those guarantees going to do they’re going to drive up your premium costs but if you want to 1st your payout no matter when you die and you want to place to get tax free access to money that’s going to be what you want to do now I just explained two very different life insurance policies one is a guaranteed death benefit within a certain time think about that is guaranteeing to pay off your mortgage or replace your salary if you died young age and the other one is the death benefits more but added bonus death benefits more of hey will get this but we also have some tax advantage situations this could be a little more expensive than the premiums but you get some of that money back so are you really spending that more expensive money or is it just kind of sitting there for you annuities are the same way if you want to add a rider that will give you long term care benefits I mean it will give you more income once you need long term care if you need long term care that’s going to cost you some money if you want to add a writer that’s going to adjust for inflation that’s going to cost you money if you want to write it going to guarantee your spouse the same income that it’s going to guarantee you that’s going to adjust your premium up it just is so you always need to remember why are you buying this if you’re buying a product to replace your pension for you when you pass away will then you the only guarantee you need is for the income to be guaranteed to your pensions amount for the rest of your spouses life that’s the only guarantee you need everything else is optional at your choice don’t get sold on it if you need a life insurance policy to pay off your mortgage either term that’s the same as your mortgage that’s the guarantee you need so think about why you’re buying these products what you’re trying to accomplish because the device that doesn’t want you to do it and it’s going to be the advisor that’s already holding your money and less than one pitching this is going to try and confuse or scare you into doing nothing so they get to keep the money it’s just a matter of them not willing to volunteer for pay cut there’s a lot of advisors and lawyers out there that whenever they confused or concerned whether it’s about your money or theirs they say no and they but they couch no into well I have real concerns about taxes or I don’t know what this is going to serve or man this seems pretty expensive to me vague concerns are going to poke right it nerves they know are exposed for you to get you to do nothing
