Local Agent vs Expert: Why Face-to-Face is Costing Farmers Money (Ep. 375)

“It’s just crazy to me how people think, ‘Well, I do business face-to-face, that’s a lot easier.’ Is it? Because the person that you’re doing business face-to-face with, do they have time to actually meet with you? Are they actually doing their job? Do they actually understand? Or you just feel more comfortable to waste money because you can see that person face-to-face?

I get it. I like being able to see people I do business with once in a while. But that doesn’t mean that they’re good people. There’s all kinds of people locally that I would never in a million years do business with because they’re not good people.

Just because they’re local doesn’t mean anything.”

Hello, hello, hello, and welcome back to the podcast. Thank you very much for being here. We’re gonna go over some Q&A stuff today, and not necessarily maybe questions that I’ve gotten, but stuff that, you know, I see all kinds of things online. So we’re gonna address them. First of all, though, if you are a client today, if you are an existing client, you are getting emails to come to the Black Sheep Summit, the client-only summit that I have once every three years.

Okay? I don’t do it every year. I just do it once every three years. We’re having that in January, and so a lot of you are telling me that you’re not getting my emails. And so I’ve had a lot of people ask, “Mary Jo, I thought you were having a summit this year.” I am having a summit. And we have amazing speakers like Coffey Anderson, Flint Rasmussen.

It’s gonna be fun. It’s gonna be great. We’re gonna have a client panel. It’s going to be fantastic, so check your emails so that you can get registered. But the biggest thing is, is a lot of people don’t understand either that I only do it once every three years. And so if you’re a new client after January, you’re not gonna get invited to one for three years.

So it’s not like you get to come every year. If you don’t wanna come this year, you’re gonna wait for three years. That does make a lot of difference to people. And so make sure that you get signed up to come, or at least check your emails. All right, let’s get into it. One of the things that I have seen online, and I guess I didn’t catch this.

When I was on Farming for Profit, I was talking about how easy it is to take a loan against your life insurance policy, and one of the guys that was hosting that show, he couldn’t believe it was that easy. The other guy that was hosting the show said, “Yeah, it’s that easy.” I didn’t notice it at the time, I guess, and now they’re running a clip.

Somebody’s running a clip of it online, and I happened to see it. And the comments, there’s not a lot of comments, but there’s a couple comments underneath that somebody said, “Come on,” and they can’t believe that it’s that easy to take a loan against your life insurance policy. And I talk about it all the time, that we have control. We have access to money. Those are the two things that are really big with the life insurance that people don’t understand. But it gives us the flexibility we need, because if cattle prices are down, if grain prices are down, now all of a sudden we have flexibility to pay that back if we want to or not.

So I want to dive a little bit deeper into that because I don’t know why it’s so unbelievable. Maybe because there’s nothing else that gives us that much control. But it’s always interesting to me when people think I’m lying about it instead of actually going and doing some due diligence. It’s so hard to do due diligence in today’s world, you know.

So when we pay our premium, let’s just talk about the process of this. So when we pay premium, now this is in a correctly structured policy, okay? This is not traditional, old-fashioned whole life. This is not what’s going to happen there. But this is what’s going to happen when it’s str… structured correctly.

You’re going to pay your premium, and then you’re going to have access to borrow against that money in 10 days with the company I use. 10 days. Some companies are 30, some companies are 90. You pay premium. Instantly, we have the ability to borrow against the cash value. To do that, you go online, you fill out a form. You answer three or four security questions. If you pass the security questions, they ACH the money to your account. You’ll have to fill out your account information one time, and then they’ll just keep ACH-ing it to the same account after that. Unless you want it changed, you’re going to have to change that.

They do not ask you, “When are you going to pay it back? How are you going to pay it back? What are you using it for?” There are no questions. This is the part that people can’t quite get a grasp on, or the fact that you have access to money in 10 days. I was talking to a gentleman a couple of weeks ago, older guy, was a financial advisor back in the day.

He’s 70 years old. He now does tax strategy stuff, and I’m looking for tax strategies, so I’ve been talking to a lot of people, and it’s very interesting. These tax strategy guys have no idea about whole life, and this guy who sold investments and has been a tax strategy dude, tax strategist for a long time, he said, “How do you have money that fast?”

And I said, “Well, the insurance company allows you to borrow in 10 days.” And he said, “No, it takes years to get money in a whole life policy to be able to borrow against it.” And I said, “Well, that is true if you don’t structure it correctly. But when you’re putting a paid-up additions rider on there, and you’re structuring it correctly, and the insurance company allows access to money in 10 days, you have access to borrow money in 10 days. There’s no question on that.”

So I can borrow that money, and I could go do whatever. I don’t care what… You could go on vacation. You could buy cows. You can buy tractors. Nobody cares. And there’s not a loophole to that. That’s not something crazy. The reason the insurance company doesn’t care is because if you die, the death benefit is going to pay off that loan.

They’re using your death benefit as collateral to that cash value loan, and there is one thing certain in life: death. You aren’t getting out alive. And so they know they’re going to get their loan paid off because when you die, which you will, it’s going to get paid off. A lot of people think, “Well, oh, why am I paying interest to the insurance company to use my money?”

You’re not paying interest to use your money. You’re paying interest to use their money. That’s why your death benefit is collateral to the loan. You have zero questions. It is that easy to get access to your money. Now let’s compare it to a savings account. If you put money in the bank, you go into the bank and you withdraw money, they don’t ask you.

Well, they do now, but they used to not ask you what you’re taking money out for. Do you say, “Well, that’s too easy. Why aren’t they asking me? Why aren’t they making it more difficult?” No. We know that that’s how savings accounts work. We can just go in and ask them for money, and they’ll give us our money.

It’s the same thing with life insurance. The only difference is, is you’ve maybe not heard about it and heard that it’s that easy. And so now we question it and say, “Oh, no, no, the person talking about it is a liar. She’s making it sound easier than it is.” No, I’m not. It’s just how it works. On the bank side of things, I’m gonna go, I’m gonna… I’m a squirrel, you know?

It’s how this goes, my friends. But I saw a video the other day of a banker, and she said the reason that I know that they’re probably asking questions, because the bank is nosy, but a lot of these tellers are asking questions when people come in to withdraw large sums of money because of all the scammers, and I had never thought of that.

So just a little FYI, if you are gonna get mad at your teller, she’s just doing her job and trying to protect you. And she did save some elderly lady from taking, like, $25,000 or something out of her account, and the scammers were still on the phone, and she had the phone in her purse. She said, “We don’t like it when you guys yell at us for that question,” but they’re just trying to make sure someone’s not being scammed, and the amount of people that I’ve seen be scammed is massive.

So let’s cut them some slack. Okay. It is that easy to take a loan. Back to the original conversation. The insurance company also does not ask you why you’re taking $100,000 for a loan, a million dollars for a loan. They’re not asking any questions. They’re just ACH-ing it. So where the bank is asking questions, “Why are you moving that much money?”

Or, “Why are you taking that much money out?” They’re not asking that question. And you’re not taking the money out, you’re borrowing it. That is also very, very different. If you withdraw money from a life insurance policy, it’s like withdrawing money from your savings account. You’re not earning the interest and the dividends on that money anymore.

The money is out of the account. If you’re going to borrow it, then it stays in there, earning compound interest and dividends, right? So we want to make sure that when we call the company or we go online, we fill that out correctly, and we fill that out as if we’re borrowing, not withdrawing.

Another question that I’ve gotten recently, and I get this a lot actually, is when people meet with me, they’re like, “Yeah, but what happens when you die?” Or, “What happens when you retire? Who’s gonna be there to help us?” Well, ideally John, because, you know, he’s only 32. He’s quite a bit younger than me.

And so ideally, John will be here to help. I do have things in place to make sure that you guys aren’t just left out in the cold. And of course, there are all kinds of other agents that you can go to and that sort of thing. Especially if you’re a client, the insurance company knows who I trust and who I don’t trust, and so they would be able to point you in the right direction as well.

But yeah, I have people ask, “Can we buy life insurance on you?” And so the goal here, here’s the thing, you might need me right away, but as time goes and as you listen to the podcast and as you become your own banker and you become more knowledgeable, the less you need me. And so if you need me 20 years in for general questions instead of intense strategy, then that’s an issue of you didn’t do your due diligence and you didn’t actually become your own banker.

You bought a life insurance policy, and now you’re relying on me to answer all those questions going forward, which is great and fantastic because that’s what I’m here for. But if I die, it’s gonna hurt worse for people like that. And let’s also talk about what a 1035 is, because a lot of people don’t know what this is, and I actually had a case this week with an agent that works with me, and a 1035 is not the end-all be-all. So what a 1035 is, is if you have an existing life insurance policy, whole life, universal life, indexed, IUL, or UL, whatever. If you have an existing permanent life insurance policy that has cash value, you can do what’s called a 1035, and the money from that policy can be moved into a new policy that you would do with us.

What happens when you do that is the other policy gets canceled. So money gets taken from that one, that gets closed. It’s like moving money from one account to another account. However, it is not always the solution, and there are agents out there that will automatically make that the solution. And I saw it firsthand this week, and it is quite unsettling to me.

This particular person went and did a policy with a different agent, a local agent. That agent sold them a good whole life policy, but did not talk to them really about the fact that they can put more money into paid-up additions, and they did not illustrate it on the illustration. So the client then took this to another IBC person, and because they’re going through their program, took it to them and said, “Here’s what we have that was sold to us.”

And we’re talking, like, between the two of them, about $80,000 is going to the death benefit portion of the policy. That portion of the policy does not create cash value for years, okay? It might take 20 years for that portion of the policy to really get moving and to really break even. And so that’s a lot of money.

If you 1035 that policy or you cancel that policy in the early years, you lost money. So this particular client goes to the second company, shows them the illustration. The second company says, or the second agent, sorry. The second agent says, “This was set up incorrectly. We need to 1035 the money you have in there,” because there was a paid-up additions rider, so they did add a little extra money, so there’s cash value. “So let’s 1035 that into a new policy with us.”

Because our policy is set up correctly. And so I looked at it and said, “Okay, but why do you even have cash value? Your illustration from agent number one shows that you shouldn’t have any cash value, but you’re telling me there’s cash value. So where is this money? Like, how did you get it in there?

Is there a paid-up additions rider? How much more can you put in?” So we investigated that. How is this policy structured? I want to see an illustration with the max amount of money you can put to cash value. I want to see that because there’s no reason for me to 1035 and cancel a good whole life policy to start you another whole life policy that’s set up the exact same way.

There’s no reason for that. The only two reasons for agent number two to do that is because they don’t understand, which I 100% believe is what’s happening here, because I know them. So they don’t understand, or they’re greedy. That’s not the case. This agent, agent number two, just is too new to insurance that they don’t understand what’s happening with the policy from agent number one.

And so a lot of agents will say, “Well, let’s just 1035 it.” There’s money to be lost. There’s death benefit to be lost when you 1035 money. If we’re going to 1035 from one policy to another, you have to understand, you’re losing the death benefit from the first policy. If that policy is collapsing, okay, fine, I get it.

But if that policy is not collapsing, and it’s a fine policy, why are we doing that? There’s no reason to do that. And so I’m not going to 1035 a policy unless I see an in-force illustration to show me why I should do that. Not to mention, agent number two over here didn’t even set everything up long term like it should have been set up.

I don’t know what the conversation was, but it was definitely a conversation that we do not understand people in agriculture, and so therefore, we think they’re going to quit working. Not happening. Especially people, these people who have multiple businesses. They farm and ranch. Like, they’re very entrepreneurial.

I cannot tell you that I’ve ever met anybody entrepreneurial that just says, “Oh, I’m going to quit at 65, and I’m never gonna do anything again.” That’s not happening. That just doesn’t happen with people that have brains like ours that are constantly going, constantly. We can’t take a break from things.

When we do understand what a 1035 is, understand that it is not the only solution. It may not be a solution at all. You might just wanna keep the policy you have. My recommendation, without even seeing the in-force illustration, is if you can put excess money into the policy, number one, there’s absolutely no reason to cancel that policy and lose 80-ish thousand dollars, like 70, 80.

Absolutely zero reason. Criminal. That’s a lot of money. We’re not talking, like, five grand. And even five grand to the respective individual is a lot of money. And so make sure that when you’re working with somebody, that you know that they know what they’re doing. Okay? If you’re listening to the podcast, if you’ve read our book, and you’re just scared to do business with us because we don’t live in your town, to me, that’s crazy.

This is your money, and you’re gonna go and give it to somebody that doesn’t understand what we’re doing because you wanna do face-to-face business. We’re doing face-to-face over Zoom. We’re real people over here. I don’t care that I lost this business in the first place. Like, doesn’t matter. What I do care, though, is that this client didn’t get what’s best for them and their situation.

And so, they still got something good, but now they’re coming back to me or going to a different agent from the first agent because they need help, and they’re looking for experts within the infinite banking industry. And so you guys have to think about that. Like, obviously, if I was criminal, I’d be in jail already.

Okay? When you call, we answer the phone. I’m seeing a lot of people asking that question, too, of, “Well, you’re just gonna be gone.” Somebody said that online. “Well, oh, just another person that’s gonna be here for six months and gone.” I’ve been here for 16 years. It’s gonna be 17. Nearly two decades. I’m not going anywhere, unless God decides I need to go somewhere else.

I am not going anywhere. We have people that answer the phone. We’re not gonna have a machine answering the phone. The only time a machine picks up is if all of our lines are busy. Somebody is answering the phone. Somebody is helping you. We’re building relationships. It’s just crazy to me how people think, “Well, I do business face-to-face, that’s a lot easier.” Is it? Because the person that you’re doing business face-to-face with, do they have time to actually meet with you? Are they actually doing their job? Do they actually understand? Or you just feel more comfortable to waste money because you can see that person face-to-face?

But yet they could probably be the criminal. I mean, like, we have to logically think about that. I get it. I like being able to see people I do business with once in a while. But that doesn’t mean that they’re good people. There’s all kinds of people locally that I would never in a million years do business with because they’re not good people.

Just because they’re local doesn’t mean anything. Think about it, and if you, heck, if you wanna drive to North Dakota or South Dakota to see John and I, well, get in your little car and drive. Get on the plane and fly in and see us. There’s always an option to meet us in person. You could become a client and come to the client event, all sorts of things.

All right, you guys. That’s enough. Let me… If you have not scheduled your appointment, schedule your appointment. Meet with us, virtually, in person, whatever you wanna do. I occasionally do have people that come to North Dakota, and they wanna meet with me personally, and hey, fantastic, great. We will meet in person. And I’ll do the same thing I’m gonna do online.

All right, you guys, let us know if we can help in any way. maryjo@withoutthebank.com, john@withoutthebank.com. Get your book, schedule your appointment, and you have a fantastic rest of your day.