In this episode, The Annuity Man discussed:

• Understanding why life insurance loans are not income

• Questioning glossy tax-free income pitches

• Keeping life insurance simple and purpose-driven

• Testing illustrations and setting clear expectations

Key Takeaways:

• Loans from a life insurance policy are not income, just as bank loans are not income. They are tax-free only because they must be repaid, not because they create earnings. Calling them "tax-free income" is a misleading sales framing.

• Many life insurance illustrations rely on optimistic assumptions and attractive projections. High internal fees and commissions often benefit the agent more than the client. If a pitch sounds too good to be true, it usually deserves deeper scrutiny.

• Life insurance works best when focused on its core purpose: a tax-free death benefit. Level term coverage maximizes protection while minimizing cost and complexity. Avoid products with indexes, market ties, or unnecessary moving parts.

• Running illustrations at 0% growth reveals the true impact of fees and loan costs. This stress test shows whether a policy can sustain itself over time. Life insurance should be positioned as protection, not a tax-free income strategy.

"With life insurance, you buy the most death benefit you can for the least amount of money. It's that simple." — Stan The Annuity Man

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