501(k) plans are better than 401(k) plans??? TikTok garbage

[DHK]

This David McKnight video is exposing a new trend of how agents are trying to market permanent life insurance through blatant misrepresentation on TikTok and elsewhere.

This is "almost" as bad as the website www.RothIUL.com.

There is a www.501k.com website. Scary stuff.

So much garbage out there on TikTok.

By the way, there is a 501(k) code section, but it references child care organizations:
https://www.irs.gov/pub/irs-tege/eotopich89.pdf

I hope consumers will search and find this post and choose to NEVER do business with anyone who will so blatantly misrepresent the tax code to the public.

 

[Allen Trent]

This David McKnight video is exposing a new trend of how agents are trying to market permanent life insurance through blatant misrepresentation on TikTok and elsewhere.

This is "almost" as bad as the website www.RothIUL.com.

There is a www.501k.com website. Scary stuff.

So much garbage out there on TikTok.

By the way, there is a 501(k) code section, but it references child care organizations:
https://www.irs.gov/pub/irs-tege/eotopich89.pdf

I hope consumers will search and find this post and choose to NEVER do business with anyone who will so blatantly misrepresent the tax code to the public.

2 clients already this week saw these videos & contacted agents I work with. They both were 110% sure they could buy one of these plans where they put in a $5000 & can borrow against $1,000,000 to use the $1,000,000 to invest in other things that can generate returns to also pay the $5,000 on the policy......and they believe the wealthy get rich by borrowing against the death benefit of a policy. Just magic insurance company money

 

[DHK]

2 clients already this week saw these videos & contacted agents I work with. They both were 110% sure they could buy one of these plans where they put in a $5000 & can borrow against $1,000,000 to use the $1,000,000 to invest in other things that can generate returns to also pay the $5,000 on the policy......and they believe the wealthy get rich by borrowing against the death benefit of a policy. Just magic insurance company money

Wow.

And while there is SOME truth to borrowing against the death benefit (it's the death benefit that repays the outstanding loan at death, but the loan is obtained and secured by the cash values while alive - and I know you know this)... that's just insane.

 

[scagnt83]

We are watching exactly how a state regulated product becomes a federally regulated product.

States are ignoring this, like they do so many other things. Complete incompetence.

Every one of the agents out there marketing IUL dishonestly should have their license revoked. Its all over youtube as well.

This will only add to the class action suits against IUL carriers. Mark my words, give it about 10 years.

 

[DHK]

I can only imagine if these kinds of claims were how stocks were sold back before the Securities Act of 1933 and licensing was required before selling stocks? Just about anyone could say anything back then.

 

[scagnt83]

I can only imagine if these kinds of claims were how stocks were sold back before the Securities Act of 1933 and licensing was required before selling stocks? Just about anyone could say anything back then.

Yep. Wild west back then. We are now seeing the wild west of IUL sales.

I dont understand why carriers are not cracking down on this??

Literally a single compliance person could find 20 agents per day using social media. They are in obvious violation of their agent contract. So terminate them!

But we all know why carriers wont do that... $$$$$

Many of them need the revenue coming from it and have staked too much of their business model on these products. Id bet we will see a transition to something else after the fist class action hits.

 

[scagnt83]

Wow.

And while there is SOME truth to borrowing against the death benefit (it's the death benefit that repays the outstanding loan at death, but the loan is obtained and secured by the cash values while alive - and I know you know this)... that's just insane.

I had an existing client contact me a few months ago. Saw a tiktok clip saying you can borrow from the DB. Wanted to know why I told them it was just the CV. I told them that their annual statement shows the maximum loan available... attached it and highlighted the loan available. Explained that many of those tiktok videos are about IUL and WL are complete lies about how the product actually works.

 

[scagnt83]

And using the tax code to promote a financial product, when that section of code does not pertain to that product.... is a clear violation of state insurance laws... and federal laws regarding use of IRS code for marketing purposes.

 

[DHK]

I dont understand why carriers are not cracking down on this??

MassMutual certainly is... or rather is trying to.

But like most company compliance departments, they only care if you bring their name and mention their product in sufficient detail. Otherwise it's just a concept.

Concepts are what I write about and don't need to get anyone's permission or blessing on my blogs or anything else I do.

But I'm generally very accurate in what I write and talk about.

These guys... will seem to say anything.

So I'm always cautious about what I ask for in terms of regulation. But if we cannot or will not regulate ourselves (individually and as an industry)... someone will have to do it, to protect the consumer.

 

[scagnt83]

MassMutual certainly is... or rather is trying to.

But like most company compliance departments, they only care if you bring their name and mention their product in sufficient detail. Otherwise it's just a concept.

Concepts are what I write about and don't need to get anyone's permission or blessing on my blogs or anything else I do.

But I'm generally very accurate in what I write and talk about.

These guys... will seem to say anything.

So I'm always cautious about what I ask for in terms of regulation. But if we cannot or will not regulate ourselves (individually and as an industry)... someone will have to do it, to protect the consumer.

Idk. I think if you really look into the wording, they could limit what you say a lot more than we like to think.

Essentially, if its bringing you regular clients that you submit to that carrier. They could take issue with it.

Now the only real issue is if its complete lies and it creates issues for the carrier and they start investigating how these pissed off clients came to them.

But I dont think their definition of advertising limits it to just using their name.

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However, in this case, agents are freely talking about products in many of the videos as well. Promoting the carriers that illustrate the highest of course...

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And what does Mass have to crack down on?? Im guessing banking concepts? Not IUL.. lol. They now have FIAs, but I dont see how those could be spun like IULs are.