A friend of mine is from a lower socioeconomic group and is trying to earn additional income. She asked me if I could participate in a practice session for a company she wants to work for, and it clearly ended up being a hard sale by her 'trainer.'

Prior to the call I thought it was more about teaching financial literacy to low income people (like a financial advisor helping people set up 529s etc on a fee only basis), but from what I can tell it is really just a sales pitch for 'Million Dollar Baby' plans to people lacking financial literacy, through an MLM structure. The trainer had a well rehearsed answer when I asked if she was a CFP (was not)

I've done some research into the plan type (7702A?), and it's a life insurance plan taken out on one's child. And I don't really understand the annuity structure beyond that. But it is clearly bullshit, or at the very least the company trying to sell it is.

I need to explain to my friend why, but as I said I don't fully understand it to begin with. I do think she is looking for my advice on whether or not it is a legitimate thing.

Can anybody succinctly provide an explanation I could then explain on to her? I'd like to be able to explain more than 'It's MLM bullshit, run away!'

Thanks

No idea, but I have a hunch it's just a clever way to sell a life insurance product.

I'm naturally a skeptic and distrustful of charismatic people, which the 'trainer' most certainly was.
I already told my friend that it wasn't something we were interested in hearing any more about, and not something I'd recommend based on what I understood, and that she should be wary of the company in particular.

I'm hoping she isn't already financially invested in the deal.