"My dad has cancer.” These were the reverberating words from my best friend of over 20 years. She was my first friend when I came to the United States at 7 years old.
That was the first time I saw the true impact of a life insurance policy. At that time, I was 3 years into running our financial planning agency offering financial advice, 401Ks and IRAs, education funds, business retirement plans, and permanent life insurance. My best friend’s entire family had set up their policies with my parents, who were also life insurance agents back in the day. Each of them got a permanent life insurance policy with retirement savings and long-term care protection.
Over the next 8 months, I saw a man who was like an uncle to me go from a strong and healthy financial head of the family to a frail being that needed 24/7 care. I saw my best friend and her mom not just lose their father and husband, but lose their financial backbone in the same stroke.
I saw how they took cash value from their policy to pay their bills while he was in the hospital, and some of the coverage to use for his funeral costs when he was gone. I saw how they used the rest of the leftover coverage to use for her mom’s annuity, which was going to give her a few thousand a month for the rest of her life since she never worked while he was alive.
Over the years, I took out my own cash value from my policy to open new offices for my business and returned the money to continue tax-free growth once the offices were up and running. My customers and team members have used their policy’s cash for all sorts of endeavors- buying stocks at opportune times, paying off student loans, and to supplement their down payments, just to name a few.
Known as the “Rich Man’s Roth”, I was taken by this product that was so prevalent in the wealthy 1% that the majority of high net worth families, large corporations, and banks used it to compound tax-free assets and provide large payouts in the coverage amount.
How does this plan work? It can be quite simple – a majority of your premiums go into a savings or investment account that builds tax-free returns, provides flexible investment options, and allows access to your accumulated cash savings. The rest of your premiums pay for your cost of insurance that gives you a death benefit that you can use in a health emergency throughout your life or goes to your family when you pass.
In contrast, almost every young family I encountered in my days of running an agency was unaware that this product existed despite the fact that our young customers had the most to benefit from a life insurance investment vehicle - lower premium rate at a young age, longer time horizon to build tax-free savings, and a coverage amount that can protect their income in a health emergency or go to their family no matter how long they live.
“How come I’ve never heard about this” and “sounds too good to be true” were some of the responses I’ve received from customers, and it’s no surprise when you take a closer look at the industry. Life insurance product details are locked in agent portals, unable to be accessed if you don’t have a license. Most of the industry consists of older, commission-driven life insurance agents who build their own book of business and are incentivized to move upmarket to high net worth and large policies.
It seemed that the current setup of the industry was backfiring on a younger generation of consumers and agents alike by effectively shielding its benefits with a lack of transparency and misaligned incentives. Today’s generation has access to more information at their fingertips than ever before, and this access has shaped their trust and purchasing behavior from word of mouth to brand, online testimonials, and their own due diligence. Unfortunately, the industry has not kept up with this transformation of how modern consumers are making their purchasing decisions.
In 2019, my cofounder, Qiyun, and I started Amplify with the mission to help people build and protect wealth through life insurance. Our goal is to transform the traditional industry from agent-driven to consumer-centric by providing consumers direct access to quotes for life insurance investment products that they can customize for themselves and undergo an intelligent and delightful purchasing process.
I will never forget how a permanent life insurance policy saved my best friend’s family. The future that we’re building towards is one in which all families have a bulletproof financial plan where there are funds available regardless of what life throws at them. We believe that at the end of the day, peace of mind is a universal aspiration. It’s time for permanent life insurance, a product with a long history of helping the 1% achieve greater security and affluence, to be utilized by everyday Americans to build a wealthier and more secure financial future for their own families.