The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Cornbread OMalley on January 20, 2016, 08:06:22 AM
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Last week I was approached by a fellow while we were at a happy hour social. We talked about investing for a few minutes before he extended an invite to a seminar he was leading. I attended the seminar a few days later, and it was a pitch to join this company named Premier Financial Alliance. It looks like their biggest pitch is selling indexed universal life insurance policies as the ticket to financial freedom and versatility. After the seminar, I was approached by two other company agents who told me their success stories. I told them I would do my due diligence and research the company to ensure their values aligned with my values.
Does anybody here know anything about Premier Financial Alliance?
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RUN! RUN and don't look back!
Life insurance is not an investment.
Illustrated Promises: Unmet Expectations (http://www.insurancenewsnetmagazine.com/article/illustrated-promises-unmet-expectations-2533#.Vp-khd-rR5P)
Indexed Universal Life Insurance - Again ... (https://www.bogleheads.org/forum/viewtopic.php?t=121253)
Indexed Universal Life Insurance as Investment (https://www.bogleheads.org/forum/viewtopic.php?t=4272)
Bogleheads Google search (https://www.google.com/search?q=bogleheads+indexed+universal+life+insurance&oq=bogleheads+indexed+universal+life+insurance&aqs=chrome..69i57.1862j0j7&sourceid=chrome&es_sm=91&ie=UTF-8#q=indexed+universal+life+insurance+site:www.bogleheads.org)
MrMoneyMustache Google Search (https://www.google.com/search?q=bogleheads+indexed+universal+life+insurance&oq=bogleheads+indexed+universal+life+insurance&aqs=chrome..69i57.1862j0j7&sourceid=chrome&es_sm=91&ie=UTF-8#q=indexed+universal+life+insurance+site:forum.mrmoneymustache.com)
Reddit Personal Finance Google search (https://www.google.com/search?q=bogleheads+indexed+universal+life+insurance&oq=bogleheads+indexed+universal+life+insurance&aqs=chrome..69i57.1862j0j7&sourceid=chrome&es_sm=91&ie=UTF-8#q=indexed+universal+life+insurance+reddit+personal+finance)
I think that's enough for now. I won't do the research for you :) In general:
With Life Insurance - They take your money, invest it in X for you, take out a huge fee (about 3%), and give you a death benefit.
Without Life Insurance - You take your money, invest in low cost index funds (0.05% fee), don't charge yourself extra fees, and buy term life insurance for a death benefit (if you need it, and you probably don't right now).
Skip the middle-man. Number 2 is mathematically guaranteed to put more money in your pocket:
(http://i.imgur.com/YXn6Xqq.png)
(http://i.imgur.com/9WKNnbO.png)
But that doesn't explain why people hate it. People hate it because it's sold by insurance salesmen who purport themselves to be "financial advisors" and trick people into buying an "amazing investment" which they say will provide a "guaranteed 6%". Those people are then shocked when they pay $107 a year for 25 years, and end up with a $1,200 "cash value" (https://www.reddit.com/r/personalfinance/comments/3soppn/why_does_pf_hate_whole_life_insurance/cwz8zd7).
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PFA looks like it operates off multi-level marketing. They recruit newbies like me, train me up, have me sell insurance while I recruit others. The guy pitching the seminar claims I can reach senior levels and make $60K a month. "Join us, grow your business, and realize your financial dreams!" he says.
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I feel myself being pulled to the dark side...those earnings sound great for the pocketbook...if anything the sales training will benefit me to no end...
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I feel myself being pulled to the dark side...those earnings sound great for the pocketbook...if anything the sales training will benefit me to no end...
If selling crappy products to your friends and family lets you sleep at night, then have at it.
They're not going to give you any leads.
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I now understand why these pyramid schemes and MLM efforts tempt so many people and actually win them over. I know a few names from over the years who have approached me to join: Amway, Advocare, etc. PFA offers me a 30% commission on sales immediately upon joining. Depending on my sales numbers and tenure my commission will jump up to 55%! The guy who invited me to the seminar called me several times since inquiring on my interest. He also asked his officemate to send me emails to determine my interest level. I am playing delay tactics right now.
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MLMs are nothing but a joke. Just say no.
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I will meet with the representatives of PFA this weekend and see what they truly offer.
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I hope they serve you a good lunch for your trouble. Otherwise, attending isn't worth it.
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...isn't worth it.
I think it is worth a look to at least get a better understanding of the predatory tactics these folks employ. I have fallen prey before to salespeople like this but due mainly to my ignorance. I think this a good opportunity to enter their world and study them. I understood that during my networking efforts I will meet some unscrupulous people. I might as well learn from the unscrupulous folks as well as the folks from the other end of the spectrum.
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Okay, seems like you're going in with your eyes open. Keep us posted!
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Thanks, Interest Compound for those articles. I will read them to gain some more education.
Adventine, I met with the agent. He gave me some reading material: charts, brochures, etc. He also gave me a book titled The Retirement Miracle by Patrick Kelly. I will read the book and compare to what IC provided.
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This is a terrible idea.
The business model of those firms looks like this: After a new employee signs up any people that they know that they can, they are then depending on finding other customers to make commission off of. Most can't find enough fresh business to earn a decent living so they leave for some other job. Their family and friends that they signed up are then left with a mediocre investment with a new account manager.
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Thanks, Interest Compound for those articles. I will read them to gain some more education.
Adventine, I met with the agent. He gave me some reading material: charts, brochures, etc. He also gave me a book titled The Retirement Miracle by Patrick Kelly. I will read the book and compare to what IC provided.
You will find his reading material to be great pitches, only highlighting the positives (you will make a bazillion dollars in commission etc.) while hiding any negatives.
Walk away from this.
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I'm sure it's a good way to make money if you're bordering on sociopathy and are a good salesman. You need to be able to convince people to buy something that you know is a terrible deal for them, often when they're very financially vulnerable, then move on to the next person even when they call you in tears wanting out of it. If you can stand to have clients call you about how they're going to lose their house because they're trapped in this plan, or that their grandma isn't able to afford her medication after you sold her a policy, then I bet you'd do well. Whether that's something you think you can handle and want to do is up to you, I know I couldn't do it.
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Thanks, Interest Compound for those articles. I will read them to gain some more education.
Adventine, I met with the agent. He gave me some reading material: charts, brochures, etc. He also gave me a book titled The Retirement Miracle by Patrick Kelly. I will read the book and compare to what IC provided.
How did the agent seem to you in person?
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How did the agent seem to you in person?
Sleazy.
I got burned with whole life insurance earlier in life as a green, fresh-out-of-college kid. I learned a lot from that experience. I am going to skip out on the so-called finance training from PFA too. I think it is nothing but training on high-pressure aggressive tactics to get people to buy rather than selling via sound financial math. No need to enter their world to study them. They have not changed! I thought the foray into the salesmen world would be fun but realize it goes completely against my values (at least with IUL). ooeei's post reminded me of that.
I read about half of the 117-page book today. Oh, man! This thing is chocked full of faulty arguments, misinterpreted math, and examples with things taken out of context. I am going to have some fun with my buddy the salesman who I met at the social. I am going to lay out all my arguments against not buying a policy and expose all his arguments! This will be so much fun!
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How did the agent seem to you in person?
Sleazy.
I got burned with whole life insurance earlier in life as a green, fresh-out-of-college kid. I learned a lot from that experience. I am going to skip out on the so-called finance training from PFA too. I think it is nothing but training on high-pressure aggressive tactics to get people to buy rather than selling via sound financial math. No need to enter their world to study them. They have not changed! I thought the foray into the salesmen world would be fun but realize it goes completely against my values (at least with IUL). ooeei's post reminded me of that.
I read about half of the 117-page book today. Oh, man! This thing is chocked full of faulty arguments, misinterpreted math, and examples with things taken out of context. I am going to have some fun with my buddy the salesman who I met at the social. I am going to lay out all my arguments against not buying a policy and expose all his arguments! This will be so much fun!
Glad you have the critical thinking skills to stay out of that trap!
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I am going to have some fun with my buddy the salesman who I met at the social. I am going to lay out all my arguments against not buying a policy and expose all his arguments! This will be so much fun!
Just be aware these guys convince people to buy this stuff for a living, you may be surprised at how non-convincing he finds your arguments. The correct person doesn't always win the debate, the better debater often does. He'll always have a good reason why you or someone else should buy this, even if the math doesn't work out. If he's good enough he'll probably strike down most of your objections, or twist them around on you. I don't think it's going to turn into him stuttering and being embarrassed like you seem to want. If it was me I'd just not contact again and if he contacts you say you're not interested.
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I don't think it's going to turn into him stuttering and being embarrassed like you seem to want. If it was me I'd just not contact again and if he contacts you say you're not interested.
You have a good point. But I am still going to close him out on my own accord.