Transcription
If you followed my channel for any amount of time, you'll know that I'm a pretty strong advocate against World Financial Group, along with other MLMs in the insurance industry. And so, I do not recommend anyone buy a product from World Financial Group.
However, if for whatever reason you are dead set on buying some type of product from World Financial Group, here are the four things that you need to make sure that you know before going ahead and signing on that dotted line.
What is up guys? For those of you new to the channel, my name is Philip Head. I'm the founder and CEO of Affinity Life, where we've helped 100 Canadians find the right life insurance coverage at the right price, all from the comfort of their own home. If that sounds interesting, I'll put a link in the description and you can check it out. But without further ado, let's get right into this video.
Okay, so you've been approached by somebody. Maybe it's a family member, maybe it's a friend, maybe it's someone you met at the grocery store who saw that you had a lot of broccoli and thought, "Maybe this person needs life insurance." Whatever the reason is, you've been approached by someone from World Financial Group, and they're offering you some type of insurance plan, whether that's life insurance or disability or some other type of product. And for whatever reason, you are dead set on working with them. You really like this person and you say, "You know what, Philip, I know, I know there's better options out there. I know I could pick a broker, you know, such as Affinity Life or other brokers out there in the marketplace that are probably going to be better and have my interest more in mind."
However, I don't care. I don't care. I don't care. I want to buy life insurance or whatever it is from this World Financial Group agent. I want to support their business, quote unquote. I'm gonna put that there. For whatever reason you want to buy it from them, there are some major things that I think that you need to know, and there's four of them. We're gonna go over them here right away that you should absolutely consider, but before signing on any dotted line and buying from anyone from World Financial Group.
Number one, do not buy any universal life insurance policy. Here's the thing. World Financial Group is a brokerage, just like Affinity Life is a brokerage or other companies are a brokerage. They have access to a multitude of different companies where you can get different products. And you know, you can pick and choose, you know, term life insurance, permanent life insurance, critical illness, disability. A lot of these things are relatively simple. They're easy to understand. However, universal life insurance is an incredibly complicated product. And World Financial Group really likes to sell this product for two main reasons.
The first reason being is the commissions are much higher with a universal life insurance policy, so of course they would try and sell that policy so they make more money. The second reason is universal life insurance and permanent life insurance in general answers the question, "How can I sell life insurance to someone who doesn't need it?" Well, if you're not married and you don't have a spouse and you don't have dependents, and your parents aren't relying upon you financially, what's really the need for life insurance? And that's where this whole, "Maybe you should use life insurance as an investment," quote unquote, discussion comes into play. And universal life insurance is the answer to that question, along of course with whole life insurance as well.
However, here's the thing. I made another very lengthy video on my channel. It's about 40 minutes long where I just compared a very standard invest in life insurance strategy to a standard RSP strategy, where you would put into your RSP, you would get your corresponding tax deduction, you'd be able to invest in there, everything is tax deferred in there, so you're not paying taxes on any earnings and that grows over time and you use that during retirement. Here's the thing. RSPS and TFSAS are very simple to understand. There's easy. There's not a lot of strings attached to it. And generally, there's nothing really that can go wrong. Of course, markets can go up and down, but you know, they're tried and true. Whereas an invest in life insurance strategy, there's more strings attached to it.
By the way, if you're interested in that video, just drop a comment below asking for the "invest in life insurance video" and I'll send it to you. However, with universal life insurance, when you have a strategy such as this, quote unquote, "invest in life insurance," okay, and this is a strategy, and it already has so many variables. What is the interest rate going to be? What is the dividend rate going to be? Are we going to be able to get a loan? Is the policy loan going to be taxable? Because in Canada, it is taxable sometimes, okay? So there's already so many questions that are involved in this strategy. When you then take that and you put a product that also has so many unknowns, you are just inserting so much uncertainty and so many things that can go wrong into this strategy that it becomes very dangerous. And World Financial Group loves to sell these incredibly complicated products because again, the commission is higher, and you can answer that question, "Well, you know, should you, you know, get life insurance if you don't have kids or a spouse or aging parents that rely upon you?" Yeah, get it as an investment.
So be very careful, and I would highly recommend, do not buy a universal life insurance policy for many reasons. Number one, it's incredibly complicated, and I guarantee you the advisor that's selling it to you has no idea how it works. Not a clue how it works. Number two, a lot of things can go wrong, and the policy can collapse, and you can lose all your money. Number three, it's not a great policy if you're looking for that quote unquote "invest in life insurance" strategy. Whole life insurance is a much better product to be utilized for this over universal life insurance. And number four, most people that buy this policy actually end up canceling it because of the complexities and the way that it was designed and that it's just not going to work out in the end. So don't be a part of that percentage of people that ends up paying into this policy and canceling it. Just stay away from universal life insurance altogether.
I made another video on my channel where I actually tried to find some use cases where would you actually pick universal life insurance over whole life insurance, and it's a very small amount of times that it could be more beneficial. And again, if you're interested in that video, just, you know, put a comment below or search on my channel. It'll be "universal life insurance," something like that. But at the end of the day, it's an incredibly complicated product. So many things can go wrong. It's just not worth it in my opinion. And it's a very complicated product that I guarantee you no one in World Financial Group actually understands how it works. So just stay away from it altogether.
Number two, you need to realize that whatever you buy from World Financial Group, from whichever advisor you buy it from, they will be gone from the industry. There is a 95% chance they'll be gone in two to five years. This is the statistics for life insurance, and it's even higher with MLMs such as World Financial Group. So if you buy anything from them, you need to realize that if you want help with this, if you want advice on it, if you want to consult with someone 5, 10, 15 years down the road about how this is going to work, that advisor will be long gone. So make sure that whatever you buy is something straightforward. It's something simple. You know, maybe term life insurance, maybe disability, maybe critical illness, something that's very simple and you can understand how it works. And if something goes wrong, you can go to the carrier and ask some simple questions.
But the fact of the matter is, that advisor will be out of the industry. And they'll say, "It's no problem. We'll have another advisor come in and help you with it." And the next advisor will have no financial incentive to help you with an already placed policy because they make no money off of it. So the only way that they'll want to help you is by trying to sell you a new policy. So that's not a good route to go, uh, as it is, or either I should say. So at the end of the day, understand that your advisor will definitely be out of industry. It's a good chance he's not going to be part, or she's not going to be part of that 5% that actually makes it the two to five years. So make your preparations, make your plan, and make sure you know they will be gone.
Number three, fact check anything that they are telling you. Because I'm so sorry to say this, most people in World Financial Group have very inadequate training when it comes to any insurance, whether it's life insurance, critical illness, or disability. Their primary focus is on teaching people how to recruit, bring more people in, so then they can recruit, can they bring more people in, and they can recruit, because that is World Financial Group's business model. They are a multi-level marketing company, AKA pyramid scheme, that is essentially bringing lots of people into the industry and making money off of recruiting. They spend very little time on actual training. Hence, you should make sure you get a second opinion on whatever it is that they are recommending to you.
I made another video on my channel called "How to Fact Check Your Advisor" and make sure they're telling the truth. But here's a couple ways you can do it. Of course, just search other videos. If they say something like this, "Disability pays out no matter what," or "This critical illness pays out no matter what," whatever it is, okay? Just do a little bit of digging. Go on YouTube. Make sure they're telling the truth. And it's not even that they might be lying, it's that they just might not know.
Another way that you can easily fact check your advisor is if you go on to Facebook. There's a group here in Canada, it's called "Life Insurance Canada," and it's still probably, I would say, with 80% independent insurance brokers, not part of any MLM such as, you know, Great Way or Primerica or WFG or any of these other ones. It's mostly independents who have a lot of time in the industry. They're very experienced. And if they're saying something, pardon me, if your advisor at WFG is saying something that seems a little bit fishy, just go join this Facebook group and post the question to say, "Hey, I have an advisor. He says this. I'm not sure if it's 100% true. What do you guys think about it?" And you'll get a whole bunch of people, and everyone will be telling the truth because it's part of public discourse. They can't hide it. You're right there in the limelight. So all the advisors are going to be telling the truth, and they're going to be given the best advice possible.
Which leads me to the last one. Number four, do not get recruited. So here's the thing. The business model, like I mentioned, at World Financial Group is, we want to recruit people so we can make money off them. We can sell to their warm market, and then get them to do the same thing to other people. Recruit them, sell to their warm market, recruit more people, sell to their warm market, recruit more people, sell to their warm market. It is a very cannibalistic business model in which very few people actually succeed. And it is usually built off the backs of people failing in order for you to succeed in that type of MLM. Other people must fail.
So another business decision, or business model, I should say, that has World Financial Group is, start with recruiting and then end with the product. Because you never start with the product and then go to recruiting. So they will always try and recruit someone into the business first. And then if they can't recruit them, they'll try and sell them a product. Which, if you just think about it, like, is a terrible business model. It's just like, "Hey, whatever we can do to make money off of you, we're gonna do that." Doesn't matter, like, we don't even care if there's a product fit here. We're just gonna try and recruit you. If that doesn't work, we'll try and sell you a product. If that doesn't work, we'll see if you have any friends that we can also try this on.
As you can tell, I have a little bit of a biased point of view against these type of companies. And by the way, this channel is not an anti-MLM channel, although it is a pro financial advice for Canadian channels. And good financial advice in Canada is staying away from these companies. So if you must buy a product from someone in World Financial Group, I would strongly recommend, do not get recruited.
There's another channel here on YouTube called "Always Marco," where he has a bunch of really good videos on World Financial Group and Primerica and all these other companies, along with other MLMs as well. And he breaks down why it's mathematically impossible for everyone to make money in an MLM and how it's reserved for a few people at the top, and it's built on the premise of other people losing for those people winning. So make sure if you are going to buy any type of product from World Financial Group, you do not get recruited into their company.
With all that being said, I think you guys can tell there's much better options out there than buying a product from World Financial Group. However, if you are dead set on it for whatever reason, you must buy this policy from them, you just love the guy or love the girl and want to support them and you believe in them, whatever it is, make sure you follow those four tips today. And if you guys have any questions, just drop them in the comments below. And if you guys are enjoying this content, all I ask is you give it a thumbs up, and I'll see you guys in the next one.