E8 - Addressing the Critics - What Banks Know About Whole Life Insurance

What if the system everyone told you to trust — including banks and corporations — all quietly relied on Whole Life Insurance behind the scenes?

In this episode of Before the Returns, Jaden Zubal addresses the critics head-on and breaks down what banks know that most people don’t.

He reveals why Whole Life Insurance isn’t a scam, isn’t an investment — and why the wealthy, institutions, and corporations have used it for generations as the foundation of long-term financial control.

You’ll learn:
 ✅ The real purpose of Whole Life and why Family Banking is about control, not returns
✅ The top four criticisms — and what people are missing when they make them
✅ How banks and corporations quietly use this same strategy
✅ The truth about cash value growth, policy loans, and liquidity

If you’ve ever wondered why Whole Life gets such a bad rap — or whether it could actually fit into your plan — this episode brings the clarity you’ve been looking for.

💬 Key Quote:

“The people criticizing Whole Life usually don’t understand it — and the people using it don’t need to defend it.”

🎙️ Next Week:
Jaden breaks down how to actually design your own Family Bank — what to include, what to avoid, and how to make sure it fits your goals.

Learn more at www.jadenzubal.com | Follow @jadenzubal | Join the *Before the Returns Weekly* newsletter

📩 Questions or ideas? Email: jadenzubal.wealth@gmail.com

⚖️ Disclaimer: This podcast is for educational purposes only. It is not financial, tax, or legal advice. Always consult with a qualified professional before making financial decisions.

Transcript

SPEAKER_00: 0:00

What if I told you that the system everyone has told you to trust, banks, credit cards, retirement accounts, all of use whole life insurance behind the scenes. Banks own it, corporations own it, and the wealthy rely on it. But the moment a regular person tries to get it, suddenly it becomes a scam. Why is that? It doesn't seem to add up. Today, I want to address that a little bit. I want to speak directly to the critics of whole life insurance here. I've mentioned in a few previous episodes now that I use a strategy called family banking, something I've been doing for a long time. And it does involve the use of life insurance. But if you just go and Google whole life insurance, you're going to find a lot of good and you're going to find a lot of bad. And there's a lot of reasons for that, and I hope to address some of those today. So I'm going to talk a little bit about the double standards that exist, why they exist, and what's really going on behind the scenes. Hello and welcome to Before the Returns. This is episode 8, and in today's episode, we are going to talk about and address specifically the critical aspects of whole life insurance. We're going to get into the details a little bit here on what whole life insurance is good for and what it is not good for, and explore when it should and should not be used. So thank you for joining today and let's dive into it. If you spent any time online, you've probably seen it, right? People shouting that whole life is a ripoff, a terrible investment, or something only old people buy. Honestly, some of the criticism that whole life insurance gets is fair. But most of it completely misses the point. And I really want to just dive into what is family banking and what it isn't and why it's been misunderstood for decades. So let's start with what might be the hardest part for some people, but let's start with the criticism. To be fair, the criticism does exist for a reason. Whole life insurance has been sold wrong for decades. Agents oversold it as an investment or promised unrealistic returns. So I've spoken to hundreds, if not thousands, of people over the last decade about whole life insurance. And I've spoken to everyone across the board, the critics, the skeptics, the people who absolutely love it and swear by it. I've had people with great experiences and people with bad experiences. And what I have personally found is that those with bad experiences have been sold a promise that does not exist. They've been sold something that doesn't track with what the product actually is, what it is not, and what it can and cannot do for you. That's really important to understand when you start talking about whole life insurance, is for it to be a good product, it has to be used for the right things. Family banking is a concept. It's not about chasing returns, it's about building a framework that gives control. Right? Let's talk about a common, or let's talk about a few common criticisms for a moment. So number one, whole life has terrible returns. Okay? So that is true if you treat it like an investment. Whole life is not meant to be an investment. Anybody that tells you about it is not on your side when it comes to strategic financial planning or really getting anything good out of what you're trying to do. Whole life insurance is not an investment. Okay? Family banking is not about high returns, it's about high control. The point of using these vehicles is to give you more control of your money and give you the ability to get better outcomes in your actual investments, not in whole life insurance. Whole life insurance is not the investment. It's not about competing with the market, it's about complementing it. So when we put our money here, it's meant to be a place that can protect the money, it can grow the money, you do get a return on it, but the return is not an investment grade return. The real return is in the coordination, the compounding growth, the liquidity, and the leverage. All right, so you don't build wealth from a single investment. You build it from a system that works together. Meaning, if you have money sitting in your bank account and you're pulling it out and putting it into your investments, and then you get a return on the investment, you put it back into your bank account, and you do this back and forth thing, or maybe you're using a brokerage account or really any financial tool like that where the money just does this back and forth, right? That's the typical, and that works fine on the investment side of things. What I have found and what I do personally is I run the money through the whole life insurance, not because I think I'm going to get some great return on the insurance, but because I can then take that money, I can leverage it against the insurance, and I can invest it in real estate and businesses and the things that give me good, solid, strong, high returns. Again, whole life insurance should not be an investment. So let's move on to criticism number two. And I've made a list of these things because I've been doing this for a long time, and I've found that it's important to understand that criticisms do exist, and some of them are fair. So, number two, it takes years to build cash value. Okay, it can take years to build cash value. Absolutely, it can. In fact, if you just call any random insurance company and you ask to buy whole life insurance and you don't clarify what it is that you're looking for, how you're trying to use the vehicle, what the intent of it is, you very well could be sold a policy that is with something called a base premium only, meaning it doesn't have any of the extra riders or options on the policy. If you're contributing only to net base premium, it is going to take quite a long time before you have access to that money in any substantial form. Now, when it's designed the way that I intend for it to be designed and the way that I use it, you're going to have substantial access right away, but it doesn't mean you have full access on day one. It's not, I put in 50 grand so I can take a loan for 50 grand on day one. Absolutely not. Right? If you're being sold that idea, again, you're being missold and the product is being misrepresented. This is not a get rich quick scheme. This is not a get rich quick or get rich overnight kind of idea. You've got to build a financial foundation. This is a tool that I have found that allows me to build that foundation. But again, it's not meant to be an overnight thing. So if you want something that's going to grow overnight, go find another tool because this is not for you. So, criticism number three. Why not just borrow from a HELOC or a margin loan? This is, you know, in previous episodes I've talked about HELOCs. So if you don't know, if you're not familiar with that, go back and listen to the previous episodes. Or the general idea is it's the ability to take a loan against your house. So it's a line of credit against your home that you can then, or sometimes in rent, can be used with rental properties as well. But it's just this line of credit that you can then use for whatever you want. Okay, and that is similar to what we do with whole life insurance, is you're essentially just having a line of credit against your insurance policy. But there are some differences, and it's important to understand that each tool serves a specific purpose. So when you borrow from a bank, your access depends on their approval, your credit, and current rates, right? So there are outside influences here on what you can and cannot do, on when you pay that money back, the rate at which you pay it back, the results you get from that. For example, I have a HELOC. Right now I've had it for a couple of years. At one point in time, the rate was about 8.5% on that HELOC. The rate on my whole life insurance is multiple percentage points lower than that when I'm borrowing against that tool. So there are some really important aspects to take into account there. With the whole life insurance, there's no credit checks, there's no approvals to take the loan against the policy, and there's no taxable event, assuming the policy was put together correctly. Okay, so many, many people do this that we don't even we're not even aware of, right? I mentioned at the very beginning of this episode, banks use this, large corporations use this, wealthy families and individuals use this. You know, you'll see these pictures up on the wall here. There's an episode about these pictures, the the Rockefeller family. It's a very common strategy, but again, when we apply it to most individuals, all of a sudden it becomes a scam. And I think it's just because it's so misunderstood. So that leads us to criticism number four. It's too complicated, right? This is a very fair criticism. Often, family banking and whole life insurance are made to be way more complicated than they should be, right? And it only sounds complicated because it this isn't typically taught in school. It's not taught while you're young. This is something we all have to find on our own as we get older. And I hope to help more people find this and to understand it better so that we can use the tool the way that it's meant to be used. Banks and corporations have been using it for over a century. It's not a new thing. It's something that is very well understood by a fraction of people, and then everybody else looks at it, scoffs, and says, okay, we don't understand it and can't do it. But once you see the flow of it, it's really simple. Your dollars essentially just circulate inside of your own economy, right? So you're just doing what the banks and the large corporations are doing, but you're doing it on a personal level. Now, why do I personally use this? Okay, so for me, this isn't theory. I've been personally using it for 10 years. It's how I run my financial life. It's become almost second nature to what I do, but 11 years ago, it certainly was not. This was a very new thing for me at that point. It did take me time to dig in and understand it and really get to a point where it was second nature and it was just fundamental to what I do. At this stage in time, I've used the policies to fund real estate bills, I've used it to pay medical bills, I've used it to get out of tight situations, you know, of times where I needed liquidity for something, I needed to solve a problem. Because one of the things I talk about frequently with clients is whether we realize it or not, and a lot of times we don't realize this when we're, you know, in our 20s and even in our 30s sometimes, but it's really important to have liquidity. It's really, really important to have access to capital when problems come up. Because I can guarantee you problems will come up. It's not a question of if, it's a question of when. So if you don't have liquidity when problems come up, it's game over. You're gonna end up selling things, you're going to get out of investments earlier than you should, and you're gonna lose opportunities and lose money because of that. But if you have liquidity, you don't have to exit investments, you don't have to sell things, you don't have to re-evaluate your entire life every time something goes wrong. And I've experienced this personally. You know, in that 10-year time period that I've been doing this, I've had multiple events where if I did not have some liquidity, it would have easily been selling assets, it would have been selling a house or selling a car or selling different things that I could have lost a lot of money on because there were problems. Now, when we have liquidity, most of us, if we're going to have any, we're gonna keep it in our bank accounts, right? And there's a host of problems that comes with that uh that I'm really not gonna get into in this episode, but we can certainly talk about either on a future episode, or you're welcome to reach out to me directly to get into some of that as well. You know, I use it for all of those things, I've I've used it for many more things, but the point is it's it's meant to be a source of liquidity. Okay, so who is this for and who is it not for? Because I think I have this perspective of family banking could be for everyone, but there's a huge caveat there. Caveat is could, because it truthfully it's not for everyone because sometimes people just aren't willing to grasp it. Okay. If you're looking for the quick returns, if you're looking for the overnight riches, this is not the way to get there. But if you're looking for long-term sustainable wealth, this absolutely is a good tool to do that. It just has to be understood that this is not a get rich quick tool. This is not even an investment. This is a tool when used strategically to enhance your wealth and better position yourself to have long-term success and stability. Okay. So it's again, it's not about making you rich with this tool alone. But when you combine this tool, it will sustain long-term wealth. Okay, so previous episodes, we have talked about all the way back to episode one now, we have talked about this, these four pillars, right? Structure, control, cash flow, and movement. Family banking really ties all four of those things together because you're building a structure, putting something in place that says, okay, now I know exactly what I'm going to do when I go to save money. And we can set parameters around specific levels of, okay, when I get to this level, I can invest in these things, and when I get to this level, I can invest in these things. And you can have structure around the idea of keeping reserves and keeping an emergency fund and all these things that are very important to have. You gain control because you still have access to your money, you can still do the things that you need to do with it, but you also don't lose the ability to earn a rate of return on that money while you're doing something with it. Cash flow, because we can invest in things that will create cash flow while we still have a tool that's protecting and growing the money in the background. And movement, because money money really grows through movement. When you invest in something and you earn a rate of return, you're getting a rate of return because that money's moving, it's doing something. Money is this arbitrary tool that we are just using to create value. We've got to get away from the idea that we need to just hoard cash all the time. Because you do need to have reserves and you do need to have liquidity, but have the liquidity doing something productive for you and then be able to move the money at the same time to create cash flow. So those four pillars are really, really important to this concept. And now, that being said, I try to keep all these episodes short and sweet, so I'm going to kind of tie this all together, wrap it up here for today. But the key point here is there's always going to be critics. Really, when anybody talks to you about family banking, talks to you about whole life insurance, it's important to understand there's always going to be critics, no matter what you do. I have found in my life personally the times that I create the most success are the times that I have the most critics. People who don't understand what you're doing and why you're doing it are going to be critical of it. So here's part of what I've learned. The people criticizing whole life usually don't understand it. And the people using it don't need to defend it. So family banking works because it gives you something no other system does. Control over your own capital. Okay? You don't have to fight the system. You just have to own yours. Next week, we will talk a little bit about how to build your own family bank. I'll get into the details of that design. I mentioned it on this episode today where we have this base policy and there's extra pieces to the puzzle. Well, I'll talk about those extra pieces a little bit. I'll talk about what to look for when you are exploring the idea of whole life insurance, and I'll talk about what to avoid when you're looking into this, how it should be structured, and really all the things to kind of make sure this actually fits your goals and serves your purpose. Money is the tool, but purpose is the goal. So if this episode helped clear the fog, share it with someone who's heard the critics and is ready for the truth. Thank you for joining today's episode of Before the Returns, and I look forward to catching you on the next episode.