While rigid control from the grave is destructive, establishing guiding principles for future generations is essential. The key is balancing dead-hand control (e.g., protecting assets from divorce) with significant flexibility to allow future trustees to adapt to unforeseen life events.

A predatory sales tactic involves agents targeting immigrant communities and falsely claiming that their non-citizen status prevents them from accessing standard retirement accounts like a Roth IRA. They position expensive IUL policies as the only viable alternative for building wealth in the U.S.

If an IUL policy lapses while loans are outstanding, a disastrous tax event occurs. The entire amount loaned out beyond the premiums paid (cost basis) becomes immediately taxable as ordinary income, leaving the former policyholder with a massive, unexpected tax bill.

As a policyholder ages, the internal cost of insurance within an IUL policy increases annually. If premium payments remain flat, the policy begins to cannibalize its own cash value to cover these rising costs, eventually draining the account and causing the policy to lapse.

Indexed Universal Life (IUL) policies are marketed with downside protection, promising a 0% return in a down market. However, this ignores the significant fees and cost of insurance that are still deducted, resulting in an actual loss of principal for the policyholder.

IULs are often sold on the promise of tax-free retirement income, but this is achieved via loans against the cash value. All loans are inherently tax-free, whether from an insurance policy or a brokerage account. This is a misleading marketing tactic that frames a standard financial mechanism as a unique product feature.

When confronted with data showing financial losses, the agent in the case study abandoned logic and resorted to emotional manipulation. He suggested that canceling the life insurance policy would lead to the client's imminent death, a desperate tactic to prevent the loss of a commission.

Just as 1700s British aristocrats had lower life expectancies from accessing ineffective but expensive "quack" medicine, today's wealthy investors can access complex financial instruments that often act as financial poison. These products peddle hope but can dramatically increase the odds of ruin, a danger unavailable to ordinary investors.

AI and big data give insurers increasingly precise information on individual risk. As they approach perfect prediction, the concept of insurance as risk-pooling breaks down. If an insurer knows your house will burn down and charges an equivalent premium, you're no longer insured; you're just pre-paying for a disaster.