While I strongly recommend you read my more detailed summaries, the following are the main bullet points explaining why you should stay away from these plans:
1) You have to lie to employees to implement them.
2) The life illustrations given by ignorant or crooked insurance agents are not realistic (most use today’s historically low lending rates with 2-3% loan spreads on variable loans on EIUL policies (ones that do not have a fixed lending rate)).
3) You have to be a C-Corporation to use them.
4) The life policies sold in these plans are so bad that the companies don’t want them sold unless they are in Section 79 plans (the policies are designed to have poor performance so the income tax deduction is increased).
5) Another very good reason not to use these plans is because there are better alternatives likeCaptive Insurance Companies (click here to learn the power of growing wealth through a CIC).
6) And the best reason not to use a Section 79 plan is because when you run the real numbers the client would be better off NOT funding the plan, taking his/her money home after taxes, and funding a “good” EIUL policy (a Retirement Life™ policy).
Conclusion
If you are an insurance agent and are being told by an IMO or insurance company that you need to start selling Section 79 plans so you can get in the business market and make a bunch of money, resist the sales pitch. If you are a business owner being pitched a plan, resist the sales pitch.
If you’ve been told this is a can’t-miss program, have them give you what they think is a good illustration for a client and forward it to me
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