Bad Policy – Worst Universal Life I’ve seen

Here we go again. Not sure about you, but I am tired of hearing myself talk about these horrible policies. However, there are so many of them out there they seem to find me, and each time I get all riled up and start seeing red.

It is understandable that agents only know what they are taught. We rely on our teachers to tell us what we need to know.  If new agents believe the stock market is a great place to park money, then they will believe these Universal Life policies will survive the test of time and continue selling them.  As we all know, I am NOT the person who has faith in the market, but I don’t have to be to see these things fall apart and leave the client out to dry. The below annual report proves my point yet again.

As you can see, this insured was 34 years old when the policy was issued, just three short years ago. This is what you are looking at:

Beginning Account Balance: $240.68

Premiums paid by the insured: $1,252.68/year
Interest earned in the policy: $8.82

LESS = this is where we start subtracting fees and charges!

Premium Load: $250.56
Cost of Insurance: $215.31

Other Expense Charges: $549.00

Total expenses: $1,014.87

Ending account Balance: $487.31


Let’s Break it down:

Percentage of premium paid that is going to fees and charges: 81%
Rate of Return in this policy for the last 12 months: -67.56%

To top it all off the insured has NO cash value! There are surrender charges of $5,145 and no cash value to use in any manner. Even if he cancels the policy he gets NOTHING. Big fat zero.

If I look at the inforce illustration he sent over I see that the policy will have ZERO cash value at age 51 on the guaranteed side and age 71 on the non-guaranteed side. What that means is, worst-case scenario, if this policy makes a 2.5% GROSS rate of return with the current expense ratio, it will have cash value until age 71. If the expenses are raised, it will only have cash value until age 51.

There is one saving grace in this policy, the agent wrote this with a guaranteed death benefit. This means when the cash value hits zero the policy will not lapse. Instead, the insured will have a death benefit with no money. So, in essence, he is paying for term insurance for the rest of his life. Buyer beware here, also, be sure to read your contract on these guaranteed death benefit policies.  It sometimes states that if you are ever late with one payment this guarantee can go away! Know your fine print before it’s too late.

There is no opportunity to borrow against this policy now or for retirement. There will be very little to borrow over the years, since it never accumulates more than $4,837 on the NON-GUARANTEED side! This is the best side to look at, and that even sucks. What about retirement? What about it, there is NOTHING left but death benefit. That is proven on the illustration.

Take a look yourself:

I have to be honest I have seen a lot of bad universal life policies but I have never seen one this bad on someone so young.

You as the consumer need to make yourself aware of what you are buying and what the difference is between whole life and universal life.  It’s sad that you have to do this, but not all agents understand what they are selling and very few educate their clients. It is our job as agents to educate you on what you have and why you have it. If your agent is out to collect commission, run like hell!

In addition, you, the consumer, must stop buying life insurance like you are going to Wal-Mart and stop chasing a rate of return! If you want a rate of return go buy an IRA. Don’t put your life insurance at the risk of the stock market and a stock company that charges nearly $550 of fees for God knows what.

Be sure to look at what you are buying. Look at that illustration and have your agents explain it to you until you understand. If they can’t do that, why are you doing business with them?

Take a look at what you have, don’t assume it’s whole life just because it has cash value. If you are curious to see how it’s performing, ask your agent for an inforce illustration and look to see how long that cash value goes before it hits zero. If you need help with it let me know. I’m happy to help, just as I did with this insured.

If you have not read either of my books, Farming Without the Bank or Wealth Without the Bank or Wall Street,  you will see more information on how a correctly structured life insurance policy should work. You can get them at either or

As usual, let me know how I can help.

Mary Jo

Insurance Policy Examples: Bad Policy #3

If you have not looked at the bad policy #2 yet I suggest you go back and read that one. This one follows #2 because it is on the same insured and from the same agent/company.

The only difference here is this policy is 23 years old already and it even terminates faster than the last one! Yes, you have that right, by age 73 the insured has no death benefit left because the fees and charges are being taken from cash value to supplement the premium.

If you read the blog on “bad policy #2” you remember the insured is non-insurable and has no money to get another policy that will last until he passes. Which is most likely at age 84 because he is male.

Make sure your policy is right from the beginning so you are not caught in this same situation. Again, call or email me and I would be happy to take a look at what you have. That is what this insured did. I am ok with that, I was not able to write another policy for them but I did help them see and understand what they have.

Insurance Policy Examples: Bad Policy #2 (Variable Universal Policy)

The first “bad policy” from the Fiscalbridge library was a Variable Universal policy and here we are going to look at a Universal. I call these kinds of policies “cross-breeds” because there are a few differences but at the end of the day, they are not performing better than each other.

Again, I have removed the name of the company as I don’t feel the company is important. It’s the type of policy and how it’s being sold that is important. These policies can work if you fund them correctly and hope and pray your return is what they (the agent or company) say it will be.

What you are seeing here (sorry it’s a little small) is $1,801.04 a year premium. He has paid a premium on this policy for 16 years already and should have an established policy.  Yet we look down to year 28 when the insured is 69 years old and see his cash value starts to decrease every year, even though he is paying his premium. Continuing to follow those numbers we see by age 80 his policy terminated due to no cash value. Unless of course, he wanted to pay unbelievably high premiums to keep it in place.

This is based on a 3.25% rate of return. That is not even that high of a ROR, yet the policy is not going to last.

This story does not end well. This insured is no longer insurable as he has an aneurysm by his heart. On top of that, he does not have enough money to start another whole life policy which means death benefit is very very important to his family. Unlike most people who call me and want cash value, these people wanted both. I can’t give them either!

Their agent did not look long term or they would have seen this themselves. This kind of stuff rips me apart. I can’t save the policy nor can I help them save the farm they are operating. The only thing I could tell them was he has to pass before 80 or there will be nothing there.

No one time their death and these policies are putting time frames on our lives.

Please watch what you are buying. If your agent is not looking long term you need to be. It is beyond me how agents don’t look at those dashes and show their client that the policy may terminate at that time. Look at your policy are there dashes or zero’s before the illustration stops?

If you have questions on your policies, whether variable universal or whole life, please call me or email them to me so I can take a look. If they are right I’ll tell you to keep it. I am not here looking to replace people’s policies, I am here looking to educate and be sure you have something when you were supposed to have it.

Insurance Policy Examples: Bad Policy #1

Over the years, I’ve accumulated illustrations and a handful of insurance policies from my clients, people who have attended the Secure Wealth Builders Conference, and others who end up in my office because they didn’t see the light at the end of the tunnel. The information in this post is meant to educate and create awareness for those looking for answers and those who want to make sure their insurance policy is set up to benefit them the most.

If you’ve read any of my books or blogs, you have heard me talk about fees and charges inside policies that are not whole life policies. Other permanent products have these and on most account agents are sharing this information with you.

Here is one of those charges: Cost of Insurance (COI) is the expense factor which is the amount the company adds to the cost of the policy to cover operating costs of selling insurance, investing the premiums, and paying claims.

Every company has these COI charges but how they are handled is not the same for every company. Mutual companies take these charges from your dividend before they give it to you. Meaning the dividend you get is after all these are paid, yet you still get a dividend!  In a policy like you see below, that does not happen.

What you are looking at here is a variable universal policy with a non-mutual company. First things first, there are no dividends being given to policy owners so there is no place to get this money from beside you as the policy owner. Second, in these companies have recently gotten in trouble for astronomical increasing costs of COI’s. As you can see here, the COI charge was $3,662.39 and the projected amount for next year is $4,402.08. That is an increase of $740 in one year!

These COI’s are increasing rapidly with some companies because they have over projected the rates of return on these policies. The difference has to be made up somewhere and that is being passed off to you.

You can clearly see this insured has a yearly premium of $1,284.50 and his COI is MORE than his premium! What are they doing to cover the difference? They are taking money from his cash value to supplement.

Look at is cash value, there is only $3005.30 left, this policy will collapse on him the next year unless he pays in more than the premium due. His premium plus his cash value does not even cover the projected COI for next year.

Sadly, this policy was issued in 1983, it was 2015 when he brought this to me. He was sold this policy that he would have money for retirement and make great rates of return. He is now around 83 years old and he has NOTHING!

When I warn about these policies it is not so I can sell more insurance, it is so you as the consumer are educated enough to make the right decision. Whole life is not the same as these other permanent products. Whole life with a mutual company is not the same as whole life with a non-mutual company. Dividends and guarantees are important.

This story is just one that I’ve heard over my career.

If you see anything here that you have questions about or if it sounds familiar, please contact your agent.

Stocks or insurance

Whole Life Vs The Stock Market

Discover why your money is more secure with a whole life insurance policy vs the stock market, as well as why pensions were safe, but no longer are safe today.



Farming Without The Bank Proof

Seeing is Believing – Caution: Undeniable Proof That You Can Farm Without The Bank is in Here

“It’s a Scam!”

“Does it really work?”“She’s hiding something, there has to be a catch.”

“If it was so good everyone would be doing it.”

“Everyone knows whole life is bad.”This list could go on…If you didn’t say it yourself, you may have heard someone else say it when you told them about Farming Without The Bank. It’s human nature to believe things are too good to be true.

Farming Without The Bank is a system based off the Infinite Banking concept that I believe in passionately! But it IS a mindset shift. That makes it difficult to believe in for people who don’t like change. People who say things like, “Well, that’s the way we’ve done it for 100 years…”

I don’t want you to be stuck in a 100-year-old system.

I want to help you take control of your farm’s financial operations using the most up-to-date strategies available and have liquidity, control, and guarantees with your money.

When you talk to folks about these new strategies and get negative feedback, consider the source. Is the person knocking whole life insurance a licensed insurance agent?

Is he knowledgeable about the insurance industry?

In most cases they are not, they are basing their judgments on hear say not facts..Do you need facts? I had a client ask 14 people about it and they all told him he was being lied to. It doesn’t work.

Then he asked his banker. His banker told him he’d be silly NOT to buy it. The banker could see the value with open eyes rather than preconceived notions others put in her head.

Let’s take a look at 3 Examples.

In the first one you’ll see the illustration given to the client when they policy was purchased. Each example includes an inforce illustration, which is an updated illustration showing actual numbers today based on what the client paid since the inception of the policy.

The illustration is an important tool for projecting what will happen to the policy. We can compare the projection to what is actually happening today, by looking at an inforce illustration. Is the growth what they expected?

Inforce illustrations are a great way to show you that dividend paying whole life does what the company and I say it will do.

A couple of things to note when learning from these examples:

1. All premiums were paid as projected.

2. LOANS were TAKEN!

3. Some loans have been paid back and some have not.

4. All policies are going into their 7th year.

If you’ve read my books or heard me speak, you’ve heard me say, “Loans do not affect your cash value growth because you borrow AGAINST it,” Now you can see it.


In the first example, a premium of $6,400/year has being paid. The guaranteed seven-year cash value projection is $9,031+$29,727=$38,758.

The Non-Guaranteed seven-year cash value projection is $43,111

Right below that is the inforce illustration from the day I wrote this blog post. Line one represents year seven – – today.

The Guaranteed side shows a cash value of: $11,602 +$29,727= $41,329

The Non-Guaranteed side shows a cash value of: $42,219

Wow! The company is off a mere $1,100 on the non guaranteed side but up by $2,571 on the guaranteed side.


Why is the guaranteed side so much higher?

Because the guaranteed side is showing the projected value if dividends are not paid. However, that has not happened in 140 years. Dividends have been paid for over 140 years. Once dividends are paid to the non-guaranteed side, that dividend is “assumed” and moved over to the guaranteed, increasing the value.



The Guaranteed seven-year cash value projection is: $50,708 + $4,150 = $54,858.

The Non-Guaranteed seven-year cash value projection is: $62,576.

You may have noticed the low cash value in the early years of this policy. That is not typical, but due to health ratings for this client we had to put most of the money toward the death benefit. However, you can see the cash value still grows at a good rate and is very close to what was projected.

Shown below is the inforce illustration. Line one represents year seven – today.

The Guaranteed side shows a cash value of: $55,617 + $4,150 = $59,767.

The Non-Guaranteed side shows a cash value of: $61,052.



The Guaranteed seven-year cash value projection is: $16,468 + $45,213= $61,681.

The Non-Guaranteed seven-year cash value projection is: $67,169.

The inforce illustration was saved on the day I wrote this blog post. Line one represents year seven – today.

The Guaranteed side shows a cash value of: $19,660 +$45,213= $64,873.

Non-Guaranteed side shows a cash value of: $66,395.


After seeing these three examples you may be asking, why is the guaranteed side so much higher than projected? As stated above, the guaranteed side is showing the worst case scenario–a dividend never being paid. However, dividends ARE paid, increase the value, and once paid they are assumed and will not be taken away!

What is the big takeaway here?


If you put money into a tool that projects future cash value nearly exactly while leaving money LIQUID  without giving up CONTROL and with GUARANTEED cash values higher than they expected, this strategy cannot be denied!

In each real-life example the policy owners took loans from the policy to do other things: buy a vacation home, take a long vacation, and buy equipment for their business.

It doesn’t matter what it’s used for! After all, the policy owner is in control!

Looking back at older policies confirms that even the market crash of 2009 did not harm the policy performance.

Traditional money management cannot do what we do here: offer liquidity, control, and guarantees along with discounted dollars to leave to your family upon your death. If you have land, there is no guarantee that land value will increase. You have to sell it to have the liquidity. (don’t forget to take off the fees for realtors and such).

If you have an investment such as an IRA there are NO guarantees or liquidity. Borrowing against an IRA affects the growth of your IRA. In addition, your IRA is not even worth what it shows on paper. You will pay taxes and/or penalties for withdrawal and lose the growth from the money that was removed.

Moral of the story: the next time someone suggests to you whole life insurance is a bad tool ask them to show you the proof of their money growth with liquidity, control, and guarantees.

Remember, if you’ve read my book – you are more of an expert on the matter than most “professionals” out there.  If you have read the book, t’s time for us to meet. Message us on Facebook for the link to schedule. If you have NOT read the book, I hope this article clarifies a few of the details. The book will explain more about the strategy and our FREE 1-hour consultation will define the details and how this strategy would work in your operation. So – What are you waiting for?

As always, I appreciate your comments or questions!

Mary Jo

Mary Jo is proud to be a Certified Infinite Banking Practitioner helping family farms keep more of the profits, create financial systems, and bring financial clarity to an uncertain industry though correctly structured whole life insurance policies.

Need More Information? Use these books and learn what tool can take away the worry.

Wealth Without The Bank or Wall StreetGet Farming Without The Bank


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Protect Yourself

The topic of estate planning is on everyone’s mind, and in most cases, it’s the ghost in the room.

No one wants to recognize it out of fear. It doesn’t matter the situation. If you have a farm, a plan needs to be in place, and a plan requires “doing.”Estate Plans are crucial for farms, businesses, and family operations. Estate Plans, when done correctly, consider many things and take time to create. This article is just about one of them, the other areas will be covered in a later blog post with attorneys. One of the ‘many things’ that is needed is life insurance and I know one thing well, and that is life insurance – and it is a good place to start.

The Reasons Plans Are Skipped

Upon death and transfer of an estate, there are expenses. Lots of expenses. And the one worrying about it is the one taking on the responsibility of your estate. Not all, but most cases I see the elder who is handing off the farm is stubborn and feels there is no need to address the expenses for several reasons.

One, it was never addressed for them, and they had to buy it.

Two, they don’t feel the need to leave anyone rich – thought is, “They should work just as hard as I had too.”

Three, there just isn’t enough money to pay an attorney to set things up. AKA, An estate plan that would save the family heartache and dollars.

Four, no one wants to disrupt the family dynamics and see anyone hurt….waiting until death just eliminates the elder from the confrontation. It’s the ultimate nasty, last minute gift of procrastination.

Estate plans are a topic of every new conversation I have, regardless of age. If you have a take-over or farming-with scenario, there needs to be a plan. Again, with most cases of young farmers, I visit with there is no WRITTEN plan. It’s an “I think I can” moment. Most feel positive they are going to get the operation or are going to be able to buy it from either the elders or the siblings.

From Experience

With hundreds of farm clients all around the country, I have seen it all.

I have seen plans go wrong and I have seen good families turn into vultures. Two things I have learned is even if there is not a plan the one taking over had better plan if the elders didn’t, and even if the elders did plan there still better be an option for cash in case it all goes south.

Two Options:

If there is no plan, the inheritor should have a takeover plan in place. Consider the expenses.

If there is a plan, create an option for cash if the plan goes south.

Where to Start with a Family Farm Estate Plan

Life insurance is the plan that can help prepare for every situation.

If the elders have a plan, great!

Life insurance needs to be part of that plan. Here are just a few examples of why. 1. The life insurance death benefit will provide an inheritance for the kids off the farm. 2. The death benefit will provide cash for the one taking over to buy out the siblings or use for operating now that they inherited more expenses.

If the elders do NOT have an estate plan, life insurance still needs to be part of a plan. In this case, the one taking over NEEDS to protect themselves from unknowns. Having some life insurance on the elders is critical for this. When the elder passes the death benefit money can be used to buy out siblings, pay estate expenses, or used for operating expenses.

The death benefit may be what determines if that family farm stays in the family.

This last scenario is the one I see most of and it may seem cold but I don’t really care about how nice and wonderful your family is NOW. I care about protecting your family farm and no one knows what will happen until the worst happens. We will plan or at least talk about worst case scenario and how to best prepare for that.

It is always better to be prepared then to wish you were.

Are you the one worried about taking over? Are you the one tired of asking if there is a plan? Are you the one hoping and praying the plan gets done?

If you answered yes to any of the above questions –

STOP relying on them.

START relying on yourself.

Take the bull by the horns and protect yourself. Do the best you can, something is better than nothing. I do a lot of policies on parents or partners and the death benefit is not enough to cover everything but they will have something more than had they not taken action.

One Last Thought

I bet you have worked that farm for many years and helped build it to where it is today. Why aren’t you protecting your work? If the elders won’t do it then do it yourself. Life insurance death benefit is the best way to do that. You are able to pay $0.40-0.70 for every dollar of death benefit. Where else can you go to get discounted dollars to buy the farm? <<Read The Article>>

Open your thoughts and be sure you are prepared if no one else wants to prepare.

You will find more on this in my book, Farming Without the Bank, but I do not go into great detail….it may require it’s own book! If you have not grabbed the book do so now, waiting to get started will just cost you more. Now as in today or this minute – is important in this scenario. I wish you wealthy farming! Mary Jo

Mary Jo is proud to be a Certified Infinite Banking Practitioner helping family farms keep more of the profits, create financial systems, and bring financial clarity to an uncertain industry though correctly structured whole life insurance policies.

Need More Information? Use these books and learn what tool can take away the worry.

Wealth Without The Bank or Wall StreetGet Farming Without The Bank


Comparing The Stability of Banks and Insurance Companies

What do you think?

When something new and out of the ordinary is introduced there is one of two reactions. It’s either accepted or hated and from both ends come the very same questions.

“How secure is the life insurance company?” is an important question. It comes from the conditioned thinking that we talk about in the first chapter of Farming Without The Bank and Wealth WIthout The Bank or Wall STreet. The question originates from the fact that we don’t hear much about life insurance companies or even know much about them. You have probably never heard of the companies that I use and I’m ok with that.

If you’re thinking, “I never really thought of a life insurance company as a place to store and create wealth.” then you’re not alone. The information, case studies, and real examples in my books are based on hard-working American’s who came from the same place as you did. I want you to be aware of another option that doesn’t have the risk and has proven itself safe over time.

Here’s why the life insurance companies that I use for my client’s policies are safe and secure:

What people don’t understand is that a large percentage of the mutual companies that exist today have been around for more than 100 years. One company I work with has been around for 140 years as of 2016 – so when I say over hundred I mean well over a hundred. Again, have you heard of them before your ran into me? They are not table conversation like the stock market or banks, but we do have to look at the history of these institutions. No one wants to put money into a system that is going to leave them broke, right? That is why I left the stock market!

Many people feel the banks are safe because they are FDIC insured and ask me , “What kind of insurance does the life insurance company have?” Here’s the answer:

The August 2015 edition of the LMR, L. Carlos Lara said it best in his article A Closer Look at Commercial Banks:

The life insurance sector is completely different from the commercial banking system and Wall Street. Fixed within life insurance policies are long-term, intangible financial promises not found in any other form of financial product. In effect, life insurance companies are obligated to fulfill their promises as written in their contracts now, or 65 years from now. In fact, no other financial product contains guarantees and options

of such potentially long durations as those found in life insurers. Obviously, a lot can happen to the financial strength of the entity that supports these promises over such a long period of time. Consequently, the financial strength and integrity of a life insurance company are more indispensable to its customers than is true of most other firms.

Like commercial banks and the securities industry,the life insurance industry is among the most heavily regulated sectors in operation today. However, unlike the commercial banks and investment banks, which are regulated by the federal government, the individual state governments oversee the insurance industry and they are the ones that provide the rules and requirements on how companies should manage their finances and the products they sell. Although we have 50 states in the union, these insurance regulations, for the most part, are harmoniously similar.

When a life company experiences financial difficulty, state regulators take a very active role in its rehabilitation or in selling off the company to financially stronger competitors to make sure all insurer promises are fulfilled. In addition, “State Guarantee Associations, support payment of policyholder benefits of financially impaired insurers. In recent insolvencies, 100 percent of death benefits and 90 percent of policyholder benefits have been covered in full. Even in the case of the famous financial impairment a of AIG, it is important to recognize that its financial difficulty was neither precipitated by nor related to its mainstream insurance operations.

At the time I wrote this article, we were hearing and feeling the strain of banks closing their doors in Cyprus and even Greece within the last few years. Completely, closed and it was the headline for weeks! This same thing happened in the United States in 1930 when we had “banking holidays.” In 2008, we saw 1,200 commercial banks slip into financial trouble and people tried to get their money out. What depositors found is it was not possible to get their money as the bank did not have the funds on hand. The FDIC went $9 billion in debt and the U.S. Treasury had to loan them money to make depositors whole.

So, people did get their deposits, but there’s a bigger problem.

The stickers on every empty wall and information on our bank statements says that the FDIC is there to insure you and make you whole should there be a run on the banks, but the FDIC only has 18% of the reserves they need to make everyone whole.

In 2008, during this same period of financial crisis, only one life insurance company became insolvent according to the National Organization of Life & Health Insurance Guaranty Associations. Unlike the 1,200 commercial banks and their depositors who have a “back-up” of less than 20% of total deposits, each state has a guarantee fund set up for insureds should a company licensed in their state become insolvent. The typical guarantee is $300,000 death benefit and $100,000 cash value protection. If you’re interested in learning more about the guarantee limits, contact your state’s insurance department.

Do you see the huge difference in crisis rates? You can also bank on the fact that life insurance is two centuries old and according to the books, mutual companies are being managed very well. But again, they have to be because unlike commercial banks, no one is there backing them up like the FDIC and the U.S. Treasury has no inherent need to print money to bail insurance companies out.

Here’s another question to ask yourself:

Which is more stable? 140 Years and no bankruptcies

or 83 years of experience and more than one “troubled” time?

What do you think?

Would you rather own a business with a private individual that has 140 years of individual history or a business that has 83 yrs of history and went broke and had to borrow money?

Not one company or farm is exempt from failure, but it is possible to mitigate the chances and I’ll take my chances with the guys that haven’t failed for 140 years.

Hope this has helped eliminate the worry and clear up some safety concerns for you. You can always bury a coffee can in your yard, but that too comes at a price of lost opportunity cost.

As always, please leave your comments or feel free to call me with questions. If you’ve read my books and are ready to take the worry out of your financial future, let’s schedule our first conversation.

-Mary Jo

Mary Jo is proud to be a Certified Infinite Banking Practitioner helping family farms keep more of the profits, create financial systems, and bring financial clarity to an uncertain industry though correctly structured whole life insurance policies.