Caught on Tape: A $100K Insurance Shock Uncovered

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2:32If 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.

3:09And 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. Pleasure to be here. Pleasure to have you here. I am your biggest fan on social media. I slipped into your DMs. You did. Because I was like, I love what you're doing. We have to be friends.

3:42That was an honor for me. 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 a thousand questions for you, but somebody must have hurt you. 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 I didn't record anything.

4:19and that's where like the light bulb when 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 so after the phone call i go do you mind if we just call right back but this time i'm going to record it and she goes yeah since i mean i'm on lunch break so we called recorded everything and i posted on on tiktok and didn't think anything of it right and then i woke the next day 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 so you started in the insurance industry that's correct selling term insurance which is different than indexed universal life policies which we will talk about what excited you about being in insurance 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 aunts 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 um 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 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.

6:06I 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? So 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 two to 3 % growth. So you'll never lose in that, but you kind of do because inflation's about that.

6:51And people like this whole, oh, I can never lose money in a 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. 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.

7:25So it goes, when somebody pays in, it goes into a cash value component and then a death benefit component, right? And then what happens? Yeah. So let's just say you're paying$1 ,000 a month,$12 ,000 a year. Let's just say of that$12 ,000,$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 ,000 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 &P 500, and then whatever that does, it gets credited to the cash value.

8:10So you got these cap rates of, let's say you're in the S &P 500, 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. Yeah, you're buying a model of the index. You're not buying the index. Exactly. And it doesn't have dividends reinvested. So you're just not going to ever be actually buying the VOO. Right. Or SPY or IVV or whatever. But 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 ETFs or mutual funds that track the index.

8:53But you're not going to lose money. Right. So that's like their talking point is like, you know, if the S &P 500 does negative 20 or zero or worse, well, your IUL does zero, but you still have fees and cost of insurance coming out. And that's still a loss. 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 policy's 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%.

9:36You're going to get zero. That's correct. 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$40 ,000 into their policy, that's what they're going to have. Right. But they're, in reality, going to have a lot less. Why is there such confusion there? So you'll hear something, and you'll probably get this in your comments, which I'm excited to see the comment section. Let's go. That's just not a properly structured policy. This is a big phrase that you hear.

10:15Yeah. So what they're referring to is how much life insurance versus how much you actually paid 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$1 ,000 a month for that$150 for it to be properly structured. Very expensive. Okay. Yeah, that's way too much. Right. My term policy cost me like$30. bucks for yeah totally my husband and i have term right to be clear good awesome so can we do one of these calls together yeah let's see let's see if she's available now hello miss how are you good how are you unbelievable okay so do you have about 10 minutes 15 minutes right now to call your company uh yeah it uh i have my husband here with me as What I want you to do is I want you to call the company.

11:17Actually, let me call them right now. 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 deaths under an accelerated benefits rider, disability, or long-term care. For assistance with a life product, please press 1. For assistance with a withdrawal, press 1. Thank you for calling. My name is Helen. How can I assist you today? Hi, Helen. My name is and I have some questions about my policy and the policy number is. How can I assist you with this? I have a friend of mine here and I am giving him permission to speak on my behalf.

12:01So really quick. Thank you so much for taking my call. What kind of life insurance policy does have? um this is an iul policy a permanent type of policy okay and what is her monthly payment monthly payment um it is set to be one uh one thousand dollars per month okay and um so since the policy has been opened how much has she paid in total premiums um so far since she's had the policy. Sure. The total premium paid as of today, that's$49 ,000. $49 ,000. Okay. And let's just say had like an emergency and she needed access to her money. What's her surrender value? Well, their net surrender value as of today, that's$25 ,774.13.

12:57That is just in case if they would like to liquidate the policy. Okay, perfect. So out of the 49 ,000, only 25 ,000 is available. Are you aware of that? No. 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? How does that work? So for loan, since we are using the cash value as a collateral, That's the reason why there's a loan interest that's 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. Perfect. Okay? So there's a loan interest rate for that.

13:43The current loan interest rate is 5 % if you 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 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. 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?

14:34Because 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 a cash value fee. And there's 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? We don't have, like, anything to have a calculation on that. Those information is actually being reflected in the annual statements that is being sent out every, as I can see here, the last annual statement that was sent out on here. That was July 23rd of this year. Got it. 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.

15:28So 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? 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 charge is$117.13. The total cost of insurance charge is$236.62. And the total admin fees or other charges is$2 ,028. That's annually, right? Yes, that's an annual. So she's put in$12 ,000 a year. $3 ,000 of it went to fees. Were you aware of that? I mean, that's like...

16:33No, we were never explained about the costs of the policy. 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. 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.

17:18So, you know, that's the reason why it keep on increasing yearly since insured is actually aging, right? So because that will be a higher risk on being insured now as to how it's being calculated. It actually depends on how your policy gets structured by your agent since that's the reason why it depends on the coverage amount, all of the necessary structure that your agent set on your policy. That's how much will be fees and cost of insurance will be on your policy. Yeah, perfect. 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.

18:05Has 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? No, we are. I always paid the same amount. 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 going, you know, intending to increase her monthly contribution to the policy.

18:41If the cost of insurance gets more expensive than what she's putting into the policy, where are you guys going to get the money to cover the cost of insurance if it gets too expensive? 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. Awesome. Perfect. OK. Right. I mean, were you aware of that? that i was never explained about that 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 that's the time that the policy will be in a status or in a pending lapse that's when the system will be sending out a bill or a reminder 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.

19:53And really quick, you said your husband had a policy, right, as well? Yes, he does. 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? Yes, he's right here with me. How can I assist the three of you for this one? So same thing, how much is his monthly payment? That's the same thing, that's$1 ,000. And how much has he put in total into his policy since he's had it? That is$50 ,035. So we're at$98 ,000 or$96 ,000 in total. How much surrender value does he have? The net surrender value is$26 ,159.76.

20:36Perfect. Okay. That's after we deducted the surrender penalty already. 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. You're welcome. Thank you for calling. And have a great friend of you. Okay. Okay. You there? Yes. 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. How was that phone call? Did you learn something about your policy?

21:13Yeah, it was the biggest mistake I ever done in my life. Oh, my God. Why do you say that? Because we're 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 month, 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 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.

22:03But at the rate that we are going, we are going to lose everything. Oh, my God. These are not cheap policies either. That is not what he promised us. Nothing of what he said. 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. 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 are not legal in the States. Oh, yeah, yeah. And that is what he promises to everyone in his social media. What do you mean on his social media? He has an Instagram account where he posts videos in a daily basis and that's what he promised.

23:00Like there's videos where he says, if you were told that you cannot retire in the United States because you were not a legal or a citizen, that is a lie. I can help you with that. There is 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 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 policy would cover for hospital costs, anything like that.

23:58But he never said that that money would be taken off of our cash value, everything that we were going to put in the policy. And the main reason we bought was because he promised the retirement and a thousand dollars a month is a lot of money two thousand dollars including your husband we work hard we work hard every day my husband wakes up at four in the morning every day to go to work how much do you guys make a month it depends we work with construction so some months we make good money but other months 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.

24:51And when did you realize that this wasn't the right policy for you? It was a couple of months ago. a friend of mine she started 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 um they tried to to recruit me uh when we started with the policy we even went to a meeting and they they really 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 recruit 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 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 person who worked with insurance for a long time.

26:18She bought courses from outside the country. 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. 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? No, he used to make a Zoom meeting with us once a year, just to ask how we were, how things were, and just to tell things that we don't really understand.

27:16uh 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 um 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 will 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 percent and he said of course and i told him yeah the papers showed that it's zero percent 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 lost this much money, it was good.

29:26We 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, he went to another side and he tried to make us think that if you cancel your policy today, you will die tomorrow. The only thing that keeps you alive is having this life insurance. Because he didn't have any more arguments.

30:16But unfortunately, we didn't report this call with him. 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? No, I have no knowledge of that. So when did you feel like you needed to get out? When this friend of mine, she 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.

31:06and that was like the light of the end of the tunnel because we didn't know what to do and as you guys are working together what's the game plan like what's the end game goal here 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 thank you so much for sharing your story with us will you keep us posted via Jonathan I hope that you get all your money back and I'm so sorry that this happened thank you so much thank you for sharing that story you're welcome bye bye I'm so happy that we did that call I'm so happy to 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 that's the rawest of the raw of the raw it it sounds i mean It's like the same script.

32:26There's somebody that's like a really convincing broker, it sounds 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. It's far less than they expected. She found someone on social media. We just talked about 75 % of people are getting their financial education on social media. She sees that. She wants a shot. And I didn't even talk about this. Okay. They're targeting people that are immigrants because you aren't a citizen.

33:04You can't get a Rotha, which is a total lie. It's a total. So they're praying like it's outrageous. If you don't have kids, do you need life insurance?