MassMutual Internal memo regarding "banking" strategies:

[DHK]

MassMutual sent out (for internal use only; but this is a professional group so this is highly relevant to us) this memo regarding the promotion of "infinite banking" or "personal banking" strategies using life insurance.

This is not just a MassMutual issue. This is an industry issue. I personally know an agent who was terminated from another career contract because he promoted "banking" strategies.

I will share an image and two videos below on this issue along with the memo itself.

Here is the biggest thing: They tend to avoid talking about the fact that it's LIFE INSURANCE. In addition, per the memo, there are other NAIC compliance issues as well in how these are promoted.

If you promote anything to do with IBC or any concept similar, please review the memo and the videos I post in the comments below.




Tom Love expounding on this exact issue:



Listen to John Ocwieja expound on this from early last year:

 

[walthamny]

Does anyone know if in the last 20 years MassMutual was training or having classes teaching or using the term IBC or family back concept. This sounds like the captive life insurance classes. They used to teach them to their agents and then decided it was too risky and they banned the concept once regulators looked deeper into the practice

 

[scagnt83]

Does anyone know if in the last 20 years MassMutual was training or having classes teaching or using the term IBC or family back concept. This sounds like the captive life insurance classes. They used to teach them to their agents and then decided it was too risky and they banned the concept once regulators looked deeper into the practice

I dont think Mass ever endorsed it on the corporate level.

I know that NYL sent cease and desist letters out to any agent promoting it, and that was 15 years ago.

Both endorsed LEAP at some point. Which is essentially a "planning system" that sells the person WL. But it didnt go into the whole "infinite banking" concept with paying yourself back interest, etc.

 

[DHK]

When I was at a MassMutual office, there was one agent (Agent of the Year for that office I might add) that promoted it heavily.

Now his math was 'funny' back then. And he used the 'official' (but not compliant approved) videos from Infinite Banking.

This is the original 'official' infinite banking video:


He did say it was life insurance, however, often his clients will request a loan in the first year, requiring that agent to submit an anti-money laundering report.

"IBC" was not taught at that office. This was just him doing what he knew.

LEAP does not use IBC concepts at all. LEAP primarily promotes the "permission slip spend-down" concept to spend down your assets knowing you have a WL death benefit to replace them at the first death, etc.

 

[Lloyds of Lubbock]

I was in the home office when LEAP was extremely popular with the agents.
When the Infinite Banking System came out agent were incorporating that into their LEAP pitches.
Bob Castellone did meeting and shouted LEAP is not a banking system!
As these policies aged a bit and the loans were not paid back they lapsed.
The agents persistency went down as did their renewals.
The permission slip is one of many LEAP strategies. ( Probably the best one)
This article while it is dated is a great paper on the Permission Slip.

 

[Lloyds of Lubbock]

if that does not open
https://www.resource-material.com/The Permission Slip_Ed Grinberg article_print.pdf

 

[DHK]

Yes I have that article. I reference it in my blog on the permission slip spend down article I wrote.

 

[scagnt83]

I like the article overall. Not a fan of the reverse mortgage part of it. I get that if it was part of an overall plan it could be done responsibly.... but so many people are taken advantage of by the reverse mortgage industry. And so many circumstances in life can change in relation to housing and living locations.

 

[Lloyds of Lubbock]

He is not advocating a reverse mortgage.
He is saying if you do, upon death the funds are available to keep the house in the family.
Ed was a good guy, he tried to update this article years ago but I think the publisher went out of business.

 

[Allen Trent]

so many tik tok videos out there with misinformation on this topic and whole life & IUL. Half of them are from people that only heard part of the product details & are pushing the kool aid they believed they drank. Seen a few where they give the impression you can borrow from your Million dollar policy without explaining you would have to either put $1.1M in or wait many years before there is much of anything in it to be able to pledge it as collateral for a loan from the insurer. Almost everyone in the comments is wanting to buy & asking for contact info because they think you can borrow from the death benefit.......LOL