Caught on Tape: A $100K Insurance Shock Uncovered

Summary

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Money Rehab with Nicole Lapin

Episode: "Caught on Tape: A $100K Insurance Shock Uncovered"

Date: January 6, 2026
Guest: Jonathan Aguilera, insurance policy advocate and educator

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Episode Overview

This episode confronts the widespread confusion and potential deception surrounding indexed universal life (IUL) insurance products. Host Nicole Lapin sits down with Jonathan Aguilera, an industry insider turned consumer advocate who helps clients expose misleading life insurance arrangements. Together, they dissect how policyholders can end up paying tens of thousands of dollars but access only a fraction of their money—and then, in real time, they help a client uncover the true value and costs of her own IUL policy on a recorded call with her insurance company.

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Key Discussion Points & Insights

1. The Dark Side of Indexed Universal Life Insurance (IULs)

• Permanent Life Insurance Explained:

  • Term insurance is straightforward, cheaper, and pays out only if the policyholder dies within the term (03:31).
  • Permanent options include Whole Life and IUL—both more expensive and confusing (03:38).

• IUL Policy Mechanics:

  • Monthly premium goes to fees, the cost of insurance, and a “cash value” account invested with capped market gains and no dividends (08:48).
  • If markets perform well, you’re still limited by a cap (e.g., S&P 500 up 20%, client gets only 10%) (10:24).
  • The appeal is “downside protection” (you don’t lose in down years—just get a 0% return), but ongoing fees and insurance costs mean you can still lose money (10:08).

Quote:

"Their talking point is like, you know, if the S&P 500 does negative 20 or 0 or worse, your IUL does 0—but you still have fees and cost of insurance coming out and that’s still a loss."
—Jonathan Aguilera (10:08)

2. Exposing Hidden Fees and Surrender Values

• On-the-Spot Policy Review (Live Call, 12:04–22:07):

  • Nicole and Jonathan dial into a client's insurer to get direct answers.
  • Client and her husband have each paid roughly $50,000 in premiums ($100,000 combined), but their surrender values are only ~$25,000 each—barely half of what they paid (13:45, 21:42).
  • Totally ~$98,000 paid, but only about $51,000 could be recouped if they cash out.

• Breakdown of Annual Costs (16:50):

  • Policy Fees: $720
  • Accumulated Value Charge: $117.13
  • Cost of Insurance: $236.62
  • Admin/Other Charges: $2,028
  • Total annual charges: over $3,000 on a $12,000 annual premium.

Quote:

"So she’s putting in $12,000 a year. $3,000 of it went to fees. Were you aware of that?"
—Jonathan Aguilera (17:37)

• Escalating Costs:
  • Cost of insurance increases with age, eating more of the cash value over time—often not explained during sales (18:18).

3. The Client’s Story: Lost Savings & Broken Promises

• Misleading Sales Tactics:
  • Promised a policy that would grow tax-free, provide retirement income, and eliminate the need for future payments by accumulating sufficient cash value—all unfulfilled (22:25).
  • Policyholder and her husband were targeted via Facebook by an agent specializing in marketing to immigrants, promising retirement security regardless of legal status (24:02).

Quote:

"When we bought the policy, we were promised that with this $1,000/month, we would retire, each receiving $4,000 a month from the policy… But at the rate we're going, we're going to lose everything."
—Policyholder (22:28)

• Predatory Marketing:
  • Group operates in a manner similar to a multi-level marketing (MLM) scheme, encouraging sales agents to recruit others for greater commissions, often preying on financially vulnerable immigrant communities (26:10, 31:32).

Quote:

"They try to recruit me. When we started with the policy, we even went to a meeting… But my heart told me, don't do that."
—Policyholder (26:18)

4. Systemic Issues & Industry Incentives

• Unjustifiable Complexity and Costs:
  • Industry knows most consumers will be “bamboozled” by technical language and illustrations of unrealistic investment returns (07:19, 38:04).
  • Feigned “tax-free retirement” is misleading—cash is accessed via loans that accrue interest and reduce the death benefit (36:31).

Quote:

"It actually grows tax deferred... It's how you take the money out that determines whether it's taxed. All loans are tax free—it's not a unique benefit to IULs."
—Jonathan Aguilera (35:30)

• Policy Lapse Risks:
  • If fees and cost of insurance outpace contributions/cash value, the policy lapses; all benefits and initial contributions may be lost, and withdrawals could become taxable (39:59, 41:23).

5. Guidance, Red Flags, and Consumer Protection

• Is There Ever a Good Case for IUL/Whole Life?

  • Rare scenarios: estate tax, irrevocable life insurance trusts, very wealthy clients, children with special needs (40:36).

• Why Term Life Insurance Is Usually Better:

  • Far less expensive; better to separate insurance from investment (42:28).
  • More transparent, flexible, and less risk of total loss.

Quote:

"The whole idea is you got 30 years to get your stuff together to grow some real assets… Don't ever co-mingle [insurance and investing]."
—Jonathan Aguilera (46:36, 43:23)

• What to Ask When Buying Life Insurance:
  • Is this term or permanent?
  • What are all the fees?
  • How much commission are you earning?
  • Are you shopping multiple carriers, or "captive" to one? (49:22)

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Notable Quotes & Memorable Moments

• Jonathan on social media influence and misinformation:

  "75% of people are getting their financial education on social media. She sees that, wants a shot… And they’re targeting immigrants by saying 'because you aren’t a citizen, you can’t get a Roth IRA,' which is a total lie." (34:01)

• Nicole on empathy for victims:

  "As an immigrant, she wants to do right by her family and her daughter… She was lied to." (33:07)

• Jonathan on industry accountability:

  “They're getting sued left and right. And they continue to do it because... this is pennies for these guys.” (43:58)

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Timestamps for Key Segments

• 03:31 – Nicole introduces topic: IULs vs. term life insurance
• 04:44 – Jonathan Aguilera joins; explains his path to advocacy
• 10:08 – IUL pitch vs. reality
• 12:04 – Live call with insurance company; policy costs revealed
• 17:37 – Annual fee breakdown
• 22:28 – Policyholder realizes loss & shares her story
• 24:02 – Predatory social media/multilevel marketing exposed
• 35:30 – Tax-free “benefit” demystified
• 41:23 – Lapse risk and total loss explained
• 42:28 – Why term life is best for most
• 49:22 – What to ask an insurance agent
• 50:26 – On the threat of educated consumers

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Tone and Language

The episode is conversational, direct, and empathetic—cutting through technical jargon to clarify how these products really work (and how they’re sold). Jonathan’s approach is frank, determined to empower consumers; Nicole is candid and compassionate, both visibly upset by the client’s experience and adamant about protecting others.

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Conclusion: Actionable Takeaways

• Don’t mix investments and insurance; buy term, invest the difference.
• Ask pointed, specific questions about fees, commissions, and alternatives.
• Be wary of “tax-free retirement” claims using insurance products.
• If you feel misled, seek help—there are advocates and even lawyers specializing in life insurance refunds and abuse.
• As Nicole underscores: “You are not alone, and you deserve financial justice.”

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If you have a story, question, or suspect your life insurance might be costing more than you’re being told, reach out. This episode is a must-listen resource for anyone evaluating complex insurance products, especially IULs and whole life policies.

Transcript

[Nicole Lapin]

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[Nicole Lapin]

I'm Nicole Lapin, the only financial expert.

You don't need a dictionary to understand it's time for some Money Rehab. If you have a life insurance policy, the cash value might not be what you think it is, and that money could disappear more easily than you'd think. Jonathan Aguilera has become kind of like the Robin Hood of life insurance policies. He gets on the phone with policyholders and calls their insurance companies with them to expose the policies that are just scams. Today we're mostly going to be focused on Iuls. These policies are different than term policies. Term life insurance policies exist for a term, they're cheaper and they'll pay out if you die during the term. With permanent life insurance, the term is your life. And there are different kinds of permanent life insurance. Two kinds you've probably heard of are whole and indexed universal life. The second one, indexed universal life, is what we're focused on with Jonathan today. Today I talked to him about the dark side of life insurance. And then we do some insurance rehab and help a real policyholder hold their insurance company accountable. Jonathan Aguilera, welcome to Money Rehab.

[Jonathan Aguilera]

Pleasure to be here.

[Nicole Lapin]

Pleasure to have you here. I am your biggest fan on Social media. I slipped into your DMs.

[Jonathan Aguilera]

You did?

[Nicole Lapin]

Because I was like, I love what you're doing. We have to be friends.

[Jonathan Aguilera]

That was an honor for me.

[Nicole Lapin]

I really, really appreciate what you're doing. For so many people out there, you help expose the scammy parts of life insurance policies. How did you get started? Like, I have, I have a thousand questions for you, but somebody must have hurt you.

[Jonathan Aguilera]

So it was actually a client that I was helping. I couldn't get a hold of her policy because she was busy working. So this is what happened. So I never replace any kind of life insurance without doing a full breakdown of a policy. So she was like, jonathan, can you just call the insurance company for me? So I called and then I just started asking questions and, and I didn't record anything. And that's where like the light bulb went. I'm like, he's literally telling me everything. Like all the, what you guys hear is like, this is what he was telling me. And this client was just very difficult to get a hold of it. So after the phone call, I go, do you mind if we just call right back? But this time I want to record it. And she goes, yeah, I mean, I'm on lunch break. So we called, recorded everything, and I posted it on, on Tick Tock and didn't think anything of it, right? And then I woke up the next day, I had like a million views. And then what the heck happened? So then dm, like, can you call mine? Can you call my insurance? I'm like, sure, I guess.

[Nicole Lapin]

So you started in the insurance industry?

[Jonathan Aguilera]

That's correct.

[Nicole Lapin]

Selling term insurance, which is different than indexed universal life policies, which we will talk about. What excited you about being so insurance.

[Jonathan Aguilera]

Is seeing how many people that did have life insurance are paying for whole life insurance and IU index universal life and how it's like 10 times more expensive than term insurance. And I'll give you a perfect example. My aunt, right, she's one of those know it all ends. I don't know if you could relate to that. And it's kind of a good thing. Like, ah, see, you got scammed. I'm kind of glad. But now I get to fix it, right? I look like the hero. So she had a policy, a whole life policy, and she was paying like 900 bucks a month for it. And then with us, like switching it to a term policy was like a hundred dollars or something like that. This was back then. So I instantly saw like people are being taken advantage of just because of the financial illiteracy people have. And it's so easy to, like, people are looking for, like, this shortcut to success, right, or to retirement that they think, you know, investing in life insurance or they do these crazy investment strategies because they're trying to get to that finish line faster.

[Nicole Lapin]

I mean, the intention is right, but what ends up happening is a lot of people get bamboozled and scammed by not really understanding what they're buying. So you focus on universal life insurance. Whole life insurance. What's the difference?

[Jonathan Aguilera]

So they're. They're very similar and very different. I know that sounds weird, right? So they're similar as far as they both build this, like, cash accumulation account called cash value. Okay. The difference between, like an IUL index, universal life versus a whole life is that whole life has guarantees in it. And those guarantees are like 2 to 3% growth. So you'll never lose in that, but you kind of do because inflation's about that. And people like this whole, oh, I can never lose money in our whole life. It's contractually guaranteed. So you hear a lot of insurance salesmen say that, or IULs, they don't give you the guarantee. That's where they're very different. But as far as it's permanent life insurance for the rest of your life, and it builds this cash accumulation account called Cash Valley. That's just terrible.

[Nicole Lapin]

There is a structured component of it where there's no losses, but there's capped gains in some cases. So explain to me the structure. It's an investment product and a life insurance product, and it's downside protected. So it goes, when somebody pays in, it goes into a cash value component and then a death benefit component. Right. And then what happens?

[Jonathan Aguilera]

Yeah, so let's just say you're paying 1,000 bucks a month, 12 grand a year. Let's just say of that 12 grand, 2,000 of it for the year went to fees and cost of insurance to pay for the life because it's life insurance foremost. Right. So the other 10 grand is going to this cash value component, and the insurance company is going to go do what they got to go do with it to go buy something called call options. I'm not too familiar with that. Against the s and P500. And then whatever that does, it gets credited to the cash value. So you got these cap rates of, like, let's say you're in the s and P500. The cap rate's 10%. The biggest challenge, though, is that it's tracking the index, not the total return. So by Default, you're tracking the S P in an inferior way.

[Nicole Lapin]

Yeah, you're buying like a model of the index. You're not buying the index.

[Jonathan Aguilera]

Exactly. And it doesn't have dividends reinvested. So you're just not going to ever be actually buying the like voo, Right.

[Nicole Lapin]

Or SPY or IVV or whatever.

But you know, a lot of people.

Get really overwhelmed by that type of stuff. You're usually though going to make less than what you would if you put your money in one of those correct ETFs or mutual funds that track the index. But you're not going to lose money. Right.

[Jonathan Aguilera]

So that's like their talking point is like you know, if the S P500 does negative 20 or 0 or worse while your IUL does 0, but you still have fees and cost of insurance coming out and that's still a loss.

[Nicole Lapin]

So when you pay the premium on an IUL policy, a portion of that goes to insurance costs and fees and then the remainder of that goes into the policies cash value and then from that you get capped at a certain percentage. So if it's the 10% cap that you mentioned, but the S&P 500 gained 20%, you're still going to only get 10%. But if it lost 10%, you're not going to lose 10%, you're going to get zero.

[Jonathan Aguilera]

That's correct.

[Nicole Lapin]

Also, not everybody knows that the cash value of their policy is probably going to be lower than what they contributed on a lot of your calls. This is the part that people are stunned by because they think if they've paid, you know, 40 grand into their policy, you know, that's what they're going to have.

[Jonathan Aguilera]

Right.

[Nicole Lapin]

But they're in reality going to have a lot less. Why is there such confusion there?

[Jonathan Aguilera]

So you'll hear something and you'll probably hear, get this in your comments, which I'm excited to see the comment section that comes out. Right. That's just not a properly structured policy. Yo, this is a big phrase that you hear.

[Nicole Lapin]

Yeah.

[Jonathan Aguilera]

So what they're referring to is how much life insurance versus how much you actually paid to towards a policy. Okay, so I'll give you an example. I'm 37. If I wanted a $150,000 life insurance policy, I would have to be paying about a thousand thousand bucks a month for that. 150 for it to be properly structured. Very expensive. Okay, here. Like yeah, that's way too much. Right. My term policy cost me like 30 bucks for. Yeah, totally.

[Nicole Lapin]

My husband and I have Term, to be clear.

[Jonathan Aguilera]

Good. Awesome.

[Nicole Lapin]

So can we do one of these calls together?

[Jonathan Aguilera]

Yeah, let's see. Let's see if she's available now. Hello, Miss, how are you?

[Policyholder (Client)]

Good, how are you?

[Jonathan Aguilera]

On Believable. Okay, so do you have about 10 minutes, 15 minutes right now to call your company?

[Policyholder (Client)]

Yeah, I have my husband here with me as well.

[Jonathan Aguilera]

What I want you to do is I want you to call. Call the company. Actually, let me call them right now.

[Insurance Company Representative]

Your call may be recorded for quality and training purposes. For assistance In English, press 1. If you're an agent, press 1. For death claims or under an accelerated benefits, rider, disability or long term care. For assistance with a life product, please press 1. For assistance with the withdrawal, press 1. Thank you for calling. My name is Helen. How can I assist you today?

[Policyholder (Client)]

Hi, Helen, My name is. And I have some questions about my policy. And the policy number is.

[Insurance Company Representative]

How can I assist you with us?

[Policyholder (Client)]

I have a friend of mine here and I am giving him permission to speak on my behalf.

[Jonathan Aguilera]

Hi. So really quick, thank you so much for taking my call. What kind of life insurance policy does have?

[Insurance Company Representative]

This is an IUL policy, a permanent type of policy.

[Jonathan Aguilera]

Okay, and what is her monthly payment?

[Insurance Company Representative]

Monthly payment? It is set to be one $1,000 per month.

[Jonathan Aguilera]

Okay, and so since the policy has been opened, how much has she paid in total premiums so far? Since she's had the policy?

[Insurance Company Representative]

Sure. The total premiums paid as of today, that's $49,000.

[Jonathan Aguilera]

49,000. Okay. And let's just say had like an emergency and she needed access to her money. What's her surrender value?

[Insurance Company Representative]

Well, their net surrender value as of today, that' $25,774.13. Just. That is just in case if they would like to liquidate the policy.

[Jonathan Aguilera]

Okay, perfect. So out of the 49,000, only 25,000 is available. Were you aware of that?

[Insurance Company Representative]

No.

[Jonathan Aguilera]

Okay. All right. So now let's just say she takes out a loan. Okay. Does she have to pay that back with interest or is it her money? Like. Like how does that work?

[Insurance Company Representative]

So for loan, since we are using the cash value as a collateral, there's a reason why there's a loan interest being billed once a year. And that is every policy anniversary year, so that they can be able to use that moving forward once to pay it back. So there's a loan interest rate for that? The current loan interest rate is 5% if we prefer to do a loan. But we do have this partial withdrawal option if you don't want to have an interest being billed. We do have the partial withdrawal option, which is for partial withdrawal. We are not using your cash value as a collateral. However, it is an irreversible type of transaction that once you submitted that request, it will be automatically be removed on your cash value as well as on your coverage. So you don't need to pay it back, but you cannot access that account anymore.

[Jonathan Aguilera]

Perfect. So I'm not too sure if you can help me with this question, but are you able to calculate how much on a monthly basis are all the fees and the cost of insurance that she's paying? Because I know you said she's paying a thousand bucks a month. How much is going towards cost of insurance and fees? Like, I know there's a policy fee, there's an. A cash value fee, and there's a, an expense load fee, I believe. Are you able to calculate all that and let me know how much on a monthly basis that is?

[Insurance Company Representative]

We don't have, like, anything to have a calculation on that, though. Those information is actually being reflected in the annual statements that is being sent out every. As you can see here, the last annual statement that was sent out on here, that was July 23rd of this year.

[Jonathan Aguilera]

Got it.

[Insurance Company Representative]

So on there, on the second page of the annual statement, it will show, like a table of the policy transaction statement that will show the expenses, the cost of insurance and interest being credited.

[Jonathan Aguilera]

So are you able to pull up that annual statement right now and just tell us how much all the fees are or she has to do that manually?

[Insurance Company Representative]

Well, I was able to pull up here the one on July 23rd of this year. So based on that, it shows this is from August of 2024 to July 22, 2025. The total premium expense charge is $720. The total accumulated value charged is $117.13. The total cost of insurance charge is $236.62. And the total admin fees or other charges is $2,028.

[Jonathan Aguilera]

That's annually, right?

[Insurance Company Representative]

Yes, that's an annual.

[Jonathan Aguilera]

So she's putting in 12 grand a year. 3,000 of it went to fees. Were you aware of that? I mean, that. That's like.

[Policyholder (Client)]

No, we, we were never explained about the, the costs of the policy.

[Jonathan Aguilera]

Okay, all right, no worries. And by the way, ma', am, you deserve a raise. You're unbelievable. I appreciate you for helping us out. You're doing a phenomenal job. Thank you so much. First off, I have another question. Like the cost of insurance, how does that work? Does it go up every year. Does it increase or does it stay the same? Does it go down? I'm just a little confused. If you could just give me some clarification on how like the actual cost of the insurance works.

[Insurance Company Representative]

The cost of insurance definitely increase every year since, you know, cost of insurance or cost of insurance keep on increasing as the insured ages. So you know, that's the reason why it keep on increasing yearly since insured is actually aging. Right. So because that's, that will be a higher risk on being insured. Now, as to how it is being calculated, it's actually being depends on how your policy gets structured by your agent, since that's the reason why it depends on the the coverage amount, all of the necessary structure that that your agent set on your policy. That's how much will be fees and cost of insurance will be on your policy.

[Jonathan Aguilera]

Yeah, perfect. So. So it does go up. Okay, so now my question is if the cost of insurance is getting more expensive, like she's been paying the same thousand bucks, like has she increased her payment during this duration of the policy or has it always stood the same? Like did you pay more every year or did you just. It's that been that same thousand bucks a month for since you had the policy?

[Policyholder (Client)]

No, we all. I always paid the same amount.

[Jonathan Aguilera]

Okay, perfect. So you never increased it then. Right? It's always been the same. And let's just say you kept this policy, you were going to continue to pay the exact same dollar amount for 10, 20 forever. Right? Okay. Okay. So my point being, ma', am, is she was never in going, you know, intending to increase her monthly contribution to the policy. If the cost of insurance gets more expensive than what she's paying, put it into the policy. Where are you guys going to get the money to cover the cost of insurance if it gets too expensive?

[Insurance Company Representative]

That's where the cash value comes in. So if by any chance that the premium that we are receiving is not enough to cover the cost of insurance already, we are already using the cash value to keep the policy active. That's the reason why most of the time, if there will be no premiums being paid, we are using the cash value to keep it active.

[Jonathan Aguilera]

Awesome. Perfect. Okay. Right. I mean, were you aware of that?

[Policyholder (Client)]

That I was never explained about that.

[Jonathan Aguilera]

Okay. Yeah, yeah, no worries. No worries. And okay, perfect. So my last question to you is, what happens if there's no more cash value to pay for the policy? What's going to happen to her policy?

[Insurance Company Representative]

That's the time that the policy will be In a lab status or in a pending labs. That's when the system will be sending out a bill or a reminder that, that we need to make a payment towards this policy to keep the policy active since there's no enough cash value anymore to cover it.

[Jonathan Aguilera]

And really quick, you said your husband had a policy, right, as well?

[Policyholder (Client)]

Yes, he does.

[Nicole Lapin]

All right.

[Jonathan Aguilera]

Are you able to bring up that policy just so I can see how much he's put into that policy? Are you able to get your husband to give the information?

[Policyholder (Client)]

Yes, he's right here, I think.

[Insurance Company Representative]

How can I. The three of you for this one?

[Jonathan Aguilera]

So, same thing. How much is his monthly payment?

[Insurance Company Representative]

That's the same thing. That's $1,000.

[Jonathan Aguilera]

And how much has he put in total into his policy since he's had it?

[Insurance Company Representative]

That is $50,035.

[Jonathan Aguilera]

So we're at 98,000 or 96,000 in total. How much surrender value does he have?

[Insurance Company Representative]

The net Surrender value is $26,159.76.

[Jonathan Aguilera]

Perfect. Okay.

[Insurance Company Representative]

That's after we deducted the surrender penalty already.

[Jonathan Aguilera]

Yeah. Okay. All right, thank you so much. We'll call back and see kind of what we want to do with the policy, if we want to put more money into it or. Yeah, yeah. But you've been amazing by the way, so thank you so much. I appreciate your time. Okay.

[Insurance Company Representative]

You're welcome. Thank you for calling and have a great photo for you. Okay.

[Jonathan Aguilera]

Okay. Oh, you there?

[Nicole Lapin]

Yes.

[Jonathan Aguilera]

Okay. Yeah. That was brutal. Let me, let me finalize this. I'll call you after because we're going to get this money back. Okay.

[Nicole Lapin]

How was that phone call? Did you learn something about your policy?

[Policyholder (Client)]

Yeah, it was the biggest mistake I ever done in my life.

[Nicole Lapin]

Oh my God. Why do you say that?

[Policyholder (Client)]

Because we are only losing money. There's no way. Because when we bought the policy, we were promised that it was a life insurance with benefit in life if we ever need it, and a retirement plan. He promised us that with this $1,000 months, we would retire, each receiving $4,000 a month from the policy. And he also promised us that our money would grow inside the policy to a point that we where we wouldn't need to make the monthly payments anymore because the interest that we were going to earn would be enough to cover the costs. But at the rate that we are going, we are going to lose everything.

[Nicole Lapin]

Oh my God. These are not cheap policies either.

[Policyholder (Client)]

That is not what he promised us. Nothing of what he said.

[Nicole Lapin]

So basically you were sold this policy hoping that once you retire, you Will have all the money you need for the rest of your life.

[Policyholder (Client)]

Yeah. The main reason we bought the policy was because he promised that our money would grow and we would be able to retire, even though we don't. We are not legal in the States.

[Jonathan Aguilera]

Oh, yeah? Yeah.

[Policyholder (Client)]

And that is what he promises to everyone in his social media.

[Nicole Lapin]

What do you mean? On his social media?

[Policyholder (Client)]

He has a Instagram account where he posts videos in a daily basis. And that's what he promised. Like, there's videos where he says, if you were told that you cannot retire in the United States because you are not a legal or a citizen, that is a lie. I can help you with that. There's a way to do that. And you can earn $4,000 a month. He has a lot of videos in his social media where he promises that. And the way that we found him, he posted an ad on a Facebook group and we saw the ad and we reached out to him to know more about it, and he promised to. That we would have the life insurance with benefit in life if we ever, like, had an accident or if we discover some kind of illness. The life insurance, the policy would cover for hospital costs, anything like that. But he never said that that money would be taken off of our cash value. Everything that we are going to put in the policy. And the main reason we bought was because he promised the retirement.

[Nicole Lapin]

And a thousand dollars a month is a lot of money. $2,000. Including your husband.

[Policyholder (Client)]

We work hard. We work hard every day. My husband wakes up at 4 in the morning every day to go to work.

[Nicole Lapin]

How much do you guys make a month?

[Policyholder (Client)]

It depends. We work with construction, so some months we make good money, but other months we are slow and it's not that good. So we don't have an exact amount a month. A lot of times we had to like really, really cut on expenses to be able to pay for the policy because we were believing in him.

[Nicole Lapin]

And when did you realize that this wasn't the right policy for you?

[Policyholder (Client)]

It was a couple months ago. A friend of mine, she started working, working there with them because they are a big group of people and they are every day doing like paid ads to recruit more people. Because they are. They try to recruit me. When we started with the policy, we even went to a meeting and they tried really hard, but my heart told me, don't do that. So I didn't do it. But they are like, if you are an agent and you start your own agency inside the agency, you can record people. And these people that you recruit Any sale they make, you earn a percentage of that. And they are like a really big group of people doing the same thing with. To a lot of people. So. So this friend of mine, she started working there, but she realized, like, if these people make this lot of money with the sales, something's wrong, somebody's losing money. So she went inside the company and she bought some courses. She went to reach to another, a lot of another persons who worked with insurance for a long time. She bought courses from outside the country. She tried, like, she spent almost $10,000 in courses to learn what this policy really was. And she figured out that what they do is they. They arrange the policy in a way that they make the most of the commissions, the higher commissions. But you. Who's buying the policy, you just lose money the way that we are right now.

[Nicole Lapin]

So did he stay in touch with you until after that cancellation period to make sure you were good, or you never heard from him again?

[Policyholder (Client)]

No, he just. He used to make, I mean, a zoom meeting with us once a year, just like, just to ask how we were, how things were, and just to tell things that we don't really understand. But last year on the last one we had, he tried really hard to get us to put more money in the policy. He asked for $200 from each one of us on each policy per month. And yeah, we had some investments in our country. And my husband told him, like, no, this is not making sense for us anymore because this is not growing at the rate you said. So we're gonna just stick with the thousand dollars a month and that's okay. But then after this friend of mine, she asked to see our policies, and she explained to us everything that was wrong. I tried to talk to him. We set up a meeting, but my husband was at work and he couldn't come. So it was just me and him. But I recorded the audio of the meeting. I have the recording. And I started to ask him questions, and he wouldn't answer. And we get to a point where he told me, I'm not going to answer anything to you unless your husband is present. And I asked him why. Yeah, and I told him why you're not saying that. I have a policy, so I'm entitled to ask questions. And he said, no, I only answer questions if your husband is present, because he is the one who always made the decisions. And I told him, if I am here, it's because I make decisions. And he said, no, I'm not answering. And I asked him, do you remember when you Promised us our money would grow on a rate of at least 7.5%. And he said, of course. And I told him, yeah, the papers show that it's 0% what's going on. And he didn't have answer for anything. So he. After that he reached out for my husband and they had a meeting. I didn't want to see him anymore, but I was on the side listening. And he tried to convince my husband that even though we. We lost this much money, it was good, we should be thankful. And my husband told him, no, this is not making any sense because the investments I have, I earned something around 10%. And he was like, no. So he was trying to convince us any way he could that losing this money, it's good, we are on the right way. And when he eventually realized that he couldn't convince my husband, that he wouldn't be able to convince my husband.

[Insurance Company Representative]

He.

[Policyholder (Client)]

Went to another side and he tried to make us think that if you cancel your policy today, you die tomorrow. The only thing that keeps you alive is having this life insurance. Because he didn't have any more arguments, but unfortunately we didn't report for this call with him.

[Nicole Lapin]

Well, it sounds like this group is also facing a class action lawsuit. Did you see that? For allegedly operating an illegal pyramid scheme where they target immigrant groups.

[Policyholder (Client)]

No, I have no knowledge of that.

[Nicole Lapin]

So when did you feel like you needed to get out?

[Policyholder (Client)]

When this friend of mine, she actually explained to us everything that was wrong. And thank God, in the same week, my husband, like, it was just random, but. And one of the Jonathan's reels appeared to my husband on Instagram and he sent it to me and said, hey, reach out to this guy. I think he can help us. And that was like the light of the end of the tunnel because we didn't know what to do.

[Nicole Lapin]

And as you guys are working together, what's the game plan? Like, what's the end game goal here?

[Policyholder (Client)]

I just want the only thing I don't want to, like bad to happen to anyone. I just want justice and I just want to cancel our policy and get our money back.

[Nicole Lapin]

Thank you so much for sharing your story with us. Will you keep us posted via Jonathan? I. I hope that you get all your money back and I'm so sorry that this happened. Yeah.

[Policyholder (Client)]

Thank you.

[Nicole Lapin]

Thank you for sharing that story.

[Jonathan Aguilera]

You're welcome. Bye bye. I'm so happy that we did that call.

[Nicole Lapin]

I'm so happy too. Thank you for letting us listen to it. It really helps paint the full picture of what's going on here because there's so much stuff as she was saying that's put out in these short clips online. And I have so much empathy for her. Like as an immigrant she wants to do right by her family and her daughter. Like, of course, like she just wants to do the right thing and she was lied to.

[Jonathan Aguilera]

That's the rawest of the raw.

[Nicole Lapin]

The raw.

It's, it sounds, I mean it's like the same script. There's somebody that's like a really convincing broker. It sounds like, like who gets them to believe the sun, moon and the stars. They pay something that's probably above their means and they hope that it's going to take care of them for the rest of their lives. But then they don't realize that it's not there or it's, it's far less than they expected.

[Jonathan Aguilera]

She found someone on social media. We just talked about 75 of people are getting their financial education on social media. She sees that, wants a shot. And I didn't even talk about this. Okay. They're targeting people that are immigrants because they're saying because you aren't a citizen, you can't get a rotha, which is a total lie.

[Nicole Lapin]

It's a lie.

[Jonathan Aguilera]

It's a total. So they're praying like it's outrageous.

[Nicole Lapin]

If you don't have kids, do you need life insurance?

[Jonathan Aguilera]

Answers yes, you need life insurance. If the answer is no, invest your money.

[Nicole Lapin]

Do you have kids?

[Jonathan Aguilera]

I do. I have a four year old. So I have a lot of life insurance.

[Nicole Lapin]

What's your policy?

[Jonathan Aguilera]

I have a four million dollar term policy and I pay about $192. So I pay 192amonth. Four million dollars. Yeah, I know it doesn't look like I'm a preferred rating. Somehow they gave me a preferred rating.

[Nicole Lapin]

So what does that mean?

[Jonathan Aguilera]

That I'm healthy, I probably eat.

[Nicole Lapin]

Oh, I see.

[Jonathan Aguilera]

Yeah, I'm not vegan, but they probably like hey, you figured out you fit the profile. So I, I got a really good rate for me.

[Nicole Lapin]

I would hope so.

[Jonathan Aguilera]

Yeah, right, $4 million. Yeah.

[Nicole Lapin]

Let's double click on the tax perks indexed universal life policies. The cash value grows tax free. Right. So people are like cool, tax free retirement income party.

But not so fast.

[Jonathan Aguilera]

Right.

[Nicole Lapin]

Because it's loan value. It's not even cash value. It's like it's coming out as a loan. You're not taking this money and just.

[Jonathan Aguilera]

Perfect.

[Nicole Lapin]

Enjoying.

[Jonathan Aguilera]

Great questions. So it actually grows tax deferred. Okay, so it's nothing special. It's how you take the money out of the cash value is going to determine whether it's taxed or tax free. So they like to say, oh yeah, I get to access it tax free via loans. Well, all loans are tax free. I can take a securities back line of credit against my brokerage account tax free. Like there's nothing special. There's not a unique benefit to that that all loans are tax free. It's just the problem is you limited your growth in that policy fees. And here, here's something that nobody want to talk about. Going back to those cap rates, they start you off at 10 after like year 4, 5, 6. They lower that cap from 10 to like 8 to 7 to 6. I have IUls 10, 12, 13 years in force when they, when I got them cap rates of like 4%. So they start off like at 12, 13 every year. So they, they just suppress how much you can actually make in your policy, which is going to hurt the growth long range. Like you'll never win in these products. And then you got to take it out at 5%. That's the loan rate, 5%, 6%, just depending which causes that policy to lapse because the fees and that interest compounds against you.

[Nicole Lapin]

Explain that part. Because I think people are like, well, you know, 5% is a good interest rate. If I went to a bank and I took out a loan, like maybe it would be eight.

[Jonathan Aguilera]

Sure, yeah. In, in reality it sounds good, right? Like, yeah, that's awesome. But then when you go to the bank, all you're paying is 5%. That's it. I, you owe you paying 5% plus cost of insurance.

[Nicole Lapin]

Although the fees, because you're still paying into that policy. So you're paying the 5% plus you're paying the fees. And then when you withdraw from the cash value as a loan, that also brings down the death benefit, right?

[Jonathan Aguilera]

It does, yes. Yes it does.

[Nicole Lapin]

So explain that. So you have these two buckets, cash value and death benefit. So I need to draw on my cash value of what I put in and I'm taking it out at 5%. And then I still pay my premium at a thousand bucks. What happens when I take that money out?

[Jonathan Aguilera]

Well, that's if you plan on paying your premium till the day you die. I mean most people are sold this as a retirement. So you only make X amount of premiums till 60, 65. So and you stop. So just because you stop putting premiums in doesn't mean the cost went away. Because these costs never go away. Like the cost of insurance will be There forever.

[Nicole Lapin]

So even if you stopped paying, the costs are coming out of the cash value.

[Jonathan Aguilera]

So not only are you drawing money out via loan at 5%, then you still have the fees and the cost of insurance coming out of that. So it's like two things coming out of this cash value. So how these insurance salesmen pitch this is they illustrate a very linear 7%. That's just not how the market works. Right. You get one down here, throws off the entire illustration, but they're, they're illustrating 6%, 7% for 40 years. I'm like, buddy, I can't even do that right. The S and P can't even do that right. So then you, you start drawing money out at 5% then, and you have no more premiums going in. So you have all the fees and the, and the loan interest rate attacking, just draining the cash surrender value. What happens is when that hap, when that goes to zero, your policy lapses and nobody wants to talk about that. And that happens, then the entire policy becomes taxable. If your policy, usually every company is different, but usually it's about 75. All right, so people start taking income at 60, 65. If they over loan their policy and it lapses before 75 years old. Right. The, everything that they put after cost base and loans and all that becomes taxable. So they have a fat tax bill, ordinary income tax, no long term capital gain.

[Nicole Lapin]

On what. So can you give me an example?

[Jonathan Aguilera]

Yeah. So let's say you put in 100 grand of your own money. Well, that would be cost basis. That's not taxable. Okay, but you've taken out $400,000 in loans that would be taxable. Yeah, it's bad. Okay, so then what happens is there's like this writer, right? These insurance guys are smooth, they always. Well, we could do this like it's called an overloan protection, right? Or if you overloan your policy too much, but you can only activate it after 75 while you pretty much surrender your life insurance and you can't take any more tax free income because you just overload the policy.

[Nicole Lapin]

So let's talk to the haters who are saying the people you're dealing with just bought a bad product. The product itself is not bad, it's just their particular case. So you know, some will say that the good ones have high early cash value, low death benefit, which is counterintuitive. Downside protection, non mec, which if you can explain is modified endowment contract. You might owe income tax or 10% penalty if you make withdrawals before 59. So you want, you know, the non me see right there. So many acronyms here in a well structured policy.

And if you're super wealthy, by the.

Way, this could work out for you.

[Jonathan Aguilera]

Yeah, yeah. I mean there are use cases for permanent and I say permanent life insurance, not whole life or anything. I, I can name a couple. Estate taxes would be a great way for permanent life insurance. Eyelets. Right. Irrevocable life insurance. Trust would make long term care would be a very, very good reason for permanent life insurance. Maybe children with special needs. I can probably vouch for that as we look at that. Okay. How many people have an estate tax issue? How many people. Right. Long term care. Like these are very niche situations where Nobody, we're talking 5, 10%. So the other 90% don't need this stuff. They need term insurance. A vest invest in market based accounts for sure.

[Nicole Lapin]

So if the policy lapses, people lose everything that they put in.

[Jonathan Aguilera]

Yeah, everything.

[Nicole Lapin]

So if they were sold a policy that they felt like, which by the way, you know, I have so much empathy for these people because they feel like they're doing the right thing for themselves and their families. Right. And if they can't pay the premium, then everything that they put into that goes away.

[Jonathan Aguilera]

It's not like you miss one payment, there's grace periods and stuff like that. They'll start deducting it from your cash value. And to, to try to pay the premiums, there's something called like an automatic premium loan where if you miss a payment, they'll automatically take a loan from your cash value to pay the premiums. But my thing is just do a brokerage account and if you can't make the payment there, it's not like your brokerage is going to lapse on you. It's not like your Roth IRA is going to lapse on you. It'll continue to grow even if you stop putting money in. Stick with term. This is even more the reason why you need term insurance and invest in market based accounts. Because you have more control, more flexibility versus these products right here. You miss a couple of payments. Screwed.

[Nicole Lapin]

So why is term more appropriate?

[Jonathan Aguilera]

Because it's the most affordable economically, like you're going to get the coverage you need. Heaven forbid something happens to you. We have 500 grand. $5 million of coverage protects what you need right now and it frees up cash flow so that you can get debt free. A lot of people are in heavy consumer debt that I don't think you should be really investing heavily if you have 20% credit cards. Right? Like we got to knock that out. Let's get some. They're just fundamentals that need to happen first. And buying one of those products prevents you from knocking out the credit card debt because it's so it's, it's an expensive product.

[Nicole Lapin]

Well, the reason that my family has term insurance is because we just want the insurance. Like if God forbid, something happens to me or my husband, we want our daughter to have, you know, our potential earning power. Right? And that's it. And we have investments separately and we don't mix that.

[Jonathan Aguilera]

Mix. Don't ever make, don't ever co. Mingle that. So insurance, insurance, investing invensity. Leave it out. You have total control. Nobody wants to buy life insurance, but everybody wants to invest money. You. They want to sound like a financial advisor. They want to sound someone important. They want to sound like, you know, a guru. Right. They want to sound like they know what they're talking about. Money. They want to have something like this. Like this is awesome. But I love the studio again. Thank you. But they wanna like, don't even write books on this stuff. And the agents, the agent secret of the wealthy.

[Nicole Lapin]

So are they complicit in this?

[Jonathan Aguilera]

They're getting sued left and right. And they continue to do it because the errors and omissions will take care of it. The insurance carriers that don't care, a little slap on the handle and bring us more business because they're billion dollar corporations, they can't do anything like me getting refunds. Like I got a million five. The insurance carriers last year issued like a billion dollars worth of new business just last year. What about the year prior? I'm not even scratching the scratch of the scratch of the scratch. Like this is pennies for these guys. They're going to continue to do it. They'll continue to build another football stadium, right. With an insurance company name on it. Like they're not going anywhere.

[Nicole Lapin]

Who's the worst insurer?

[Jonathan Aguilera]

I wouldn't say there's a worse insurance carrier. I would say they tend to allow things more than others. They turn to look the other way. You know the crazy part, Nicole, is that that exact company has probably a very great term product available.

[Nicole Lapin]

Well, that's the thing that gets missed, I think in your call. So like, you know, I was writing down all the numbers. She paid 49k, there's 25k surrender 5% loan which is not a bad interest rate.

[Jonathan Aguilera]

It's not, it's not.

[Nicole Lapin]

And if God forbid something happened to her, how Much would she get? How much would her daughter and her husband get? Because the death benefit is real.

[Jonathan Aguilera]

The death benefit is real. They both have 700 grand of life insurance. So they, they both have a 700, 000 death benefit. So if anything happened to them, 700 grand gets paid out.

[Nicole Lapin]

And that's still there.

[Jonathan Aguilera]

It's still there, yeah, that's still there until it lapses like you heard. Because it's going to get more expensive every. So they paid essentially $100,000 to get 700 grand. Where they could have paid it would have been a fraction. Their policies with me are like 150amonth total. So like $75 each.

[Nicole Lapin]

And they're spending 2k right now for the same. So 700 for each person. So 1.4 million.

[Jonathan Aguilera]

That's correct, yeah.

[Nicole Lapin]

For their death benefit.

[Jonathan Aguilera]

Death. So if something happened to both them together, their family gets 1.4 million.

[Nicole Lapin]

But at this policy too, they would still get that. They're just correct. Spending a ton, 10 times more.

[Jonathan Aguilera]

That's correct. 100%. So the life insurance is real. Don't get me wrong, like if something happened, they're taken care of. So that's why I never cancel the policy without getting a term in. In place first. They have a mortgage, they have a business, they. They have kids and all that.

[Nicole Lapin]

So term goes up though as you get older too.

[Jonathan Aguilera]

So at the end of her. I think we did a 30 year. I can't remember it will but the whole idea is to. You got 30 years to get your stuff together to grow some real assets.

[Nicole Lapin]

And then what does it go up to?

[Jonathan Aguilera]

It just depends on their age. Right. Of when they. So I. She mentioned 1985, I think.

[Nicole Lapin]

Yeah, she's my.

[Jonathan Aguilera]

So that's 40. So 70 when this thing expires, right?

[Nicole Lapin]

Yeah.

[Jonathan Aguilera]

If she needed a little bit more insurance, she probably wouldn't need 700 grand because her assets would have been more than that.

[Nicole Lapin]

And her daughter's older.

[Jonathan Aguilera]

Older, whatever. So then she could probably re. Qualify for another policy maybe at a hundred thousand. Because if something happens, she leaves a little life insurance plus all the assets she's been building. Step up cost basis, you know, all that stuff.

[Nicole Lapin]

And what should people look out for when they're being sold these policies?

[Jonathan Aguilera]

Policies that life insurance is not an investment or a retirement plan. If somebody's trying to sell you on a get rich quick, never lose money run.

[Nicole Lapin]

And to be clear, you're not getting a portion of that refund.

[Jonathan Aguilera]

Zero. I get that. 96 or whatever those totals equals 100 hers. Now, I do take Starbucks, right. I'm joking. I take nothing. Like, my whole thing is, let's create the awareness. Like, I just want more people to invest.

[Nicole Lapin]

I mean, you're putting real time in. In, but, you know, people are buying with you. So you're making some commission, but you're putting a lot more time.

[Jonathan Aguilera]

I. I get paid on the commission on the term insurance, so I'm not pro bono. 100. But yeah, I could totally charge to get that. Like, they're more than happy. Like, dude, I might. I'd rather pay a thousand dollars to get the 96 grand back. Opposed to just only getting 50 grand back.

[Nicole Lapin]

But you're a good person.

[Jonathan Aguilera]

Yeah, I have morals.

[Policyholder (Client)]

Yeah. Yeah.

[Jonathan Aguilera]

That's a good thing, right? I think you can still go make a couple hundred thousand dollars per year doing the right thing, putting people first. I think we can all do that because I could totally be making a million dollars selling that crap, so I couldn't imagine doing that.

[Nicole Lapin]

Is there recourse? You're only one man, so you can only do so many calls like this.

[Jonathan Aguilera]

Yeah.

[Nicole Lapin]

Are there other resources or is there other recourse that people have?

[Jonathan Aguilera]

Yeah, there's lawyers now that they've. Their whole practice is Iuls, like suing Iuls. Right. There's. So you just type in IUL litigators or IUL lawyers, and they take. They. They do charge though, you know, so. But they're effective and they'll go do that. But they won't talk to somebody who has only put in 4,000 because that costs money. So that's where kind of someone like me steps in. It's like, oh, I'll take it.

[Nicole Lapin]

Yeah, it's like a. Any personal injury contingency type lawyer.

[Jonathan Aguilera]

Sure.

[Nicole Lapin]

Who's going to go after it?

[Jonathan Aguilera]

Yeah, there's lawyers now that this. This is all they do.

[Nicole Lapin]

What are some of the questions that somebody should ask if they're talking to somebody who's trying to sell them a life insurance product?

[Jonathan Aguilera]

Yeah, somebody's trying to sell you. The questions I would ask is, is this a term policy or is it permanent life insurance? Ask them what your commission is, because as an investment advisor, you should ask them that too. They have to disclose what their fees are. Ask them how much are the fees. Can you shop around for me? Are you a captive agent? Like, give me five different term quotes. Give me five. Like, I need to know what are all the fees? Be very transparent with that.

[Nicole Lapin]

Oh, so in this case, they didn't get different carriers. They only got one, I don't know.

[Jonathan Aguilera]

That agent, what he did specifically to shop that around. But it sounds like because every insurance carrier is gonna have like preferred agents. There you go. Like they, they, they. And how they do that is the compensation's higher. So there's always going to be. I'd rather go through.

[Nicole Lapin]

Yeah.

[Jonathan Aguilera]

A, you know, this particular company because I might get 10 more on a commission here. Those are questions I would be asking. They're going to be let down. You're going to see a very different insurance agent after like 10 minutes.

[Nicole Lapin]

Oh, really?

[Jonathan Aguilera]

Oh, you get educated. Why are you asking? See, the biggest threat to an insurance agent is an educated consumer, big time. Because you can't fool them. So they hate me. And they're. Pretty soon they're going to be in your comments.

[Nicole Lapin]

They're going to hate me too. Come for me.

Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan Lavoy. Our researcher is Emily Holmes. Do you need some money Rehab? And let's be honest, we all do. So email us your money questions, money rehaboneynewsnetwork.com to potentially have your questions answered on the show or even have a one on one intervention with me. And follow us on Instagram at Money News and TikTok Tokoney News Network for exclusive video content. And lastly, thank you.

No, seriously, thank you.

Thank you for listening and for investing in yourself, which is the most important investment you can make.