2014 0424 – Document 820 – Trial Transcript – Day 11 – Walker v LSW – 279p

2014 0424 - Document 820 - Trial Transcript - Day 11 - Walker v LSW - 279p

2014 0424 - Document 820 - Trial Transcript - Day 11 - Walker v LSW - 279p

(p27-28) - Q Would you ever sell a product that you 09:09:23 weren't sure you understood and had the proper training in?
A: JEFFREY STEMLER, Agent - No.

(p39-41) - Q Second page -- third page. Mr. Stemler, do you recognize what has been marked as Exhibit 774 on page 3 as a drawing?
A: JEFFREY STEMLER, Agent - A Yes.
Q Is this a drawing that you did on the back of Ms. Walker's illustration?
A: JEFFREY STEMLER, Agent - A Yes.
Q Could you describe for the jury what you were trying to convey when you drew this drawing, Exhibit 774, on the back of her illustration.
A: JEFFREY STEMLER, Agent: This is -- when we are sitting down talking about insurance, we try to explain to the prospects exactly how the insurance works.
- So this is part of our talk that we give to explain how it works.
  - So this would be a build slide.
  - This didn't just start there.
- I drew a line on the bottom and I said: When you buy insurance, there is a minimum amount that you must pay for insurance to pay for the costs and put the policy in force.
  - And I drew the line and I wrote minimum, and I would ask who do you think sets that price.
    - Some people will say: I don't know.
    - Others: Well, the insurance company.
    - I go, yes, you're correct.
  - And I said: They have actuaries, and the actuaries, their job is to figure out how much they need to collect for any given amount based on the age of the person so that they can cover the risk and also still make a profit.
- I said: But there's another line that we need to be concerned about, and then I draw the line up on top and I put the max there.
  - And I say this is the maximum you can pay for a contract.
    - I said: Do you know who sets that limit?
    - People will often say: Well, the insurance company; right?
    - And I say: No. It's actually the government.
- In the example we'll often say: Well, let's just assume that this is $500,000 that we are dealing with here and the minimum premium is a thousand dollars and the maximum premium is $5,000.
  - Why would anyone put $5,000 into a contract if you could buy the same amount of coverage for only 1,000?
  - Well, the reason is because once you pay that minimum premium, everything between there and the upper line receives substantial benefits, both taxes and other benefits in there.
    - So that is -- so what we are trying to explain is why would we use life insurance as an accumulation vehicle?
    - Why would we use life insurance as an income-generating vehicle?
    - How would that actually be achieved? And that's what you see there.

(p55) - Q According to the illustration on the guaranteed basis, what happens after the second year of that illustrated loan?
A: JEFFREY STEMLER, Agent - The contract would terminate.
Q It would lapse?
A: JEFFREY STEMLER, Agent - It would lapse.
Q Did you discuss with Ms. Walker that policies lapse if, as you said before, not enough premiums are paid or too many loans are taken?
A: JEFFREY STEMLER, Agent - Yes.