INFINITE BANKING CONCEPT/PRIVATE FAMILY BANKING

How IBC works.

So, here is how infinite banking works. You are your own banker, using your life insurance policy as your bank. Instead of financing a purchase or paying cash, you borrow against your life insurance policy’s cash value.

Through the use of life insurance loans, you bank on yourself with this strategy that replaces institutional banks with you now as the bank. You act as your own banker, essentially wearing two hats as both the borrower and lender. And this process opens your mind up to limitless financial possibilities.

Some of the benefits of using whole life insurance for infinite banking include:

1. Cash Flow

Your policy’s cash surrender value is liquid and accessible by you whenever you need it. You do not have to go through a qualification process. You can withdraw funds or take a loan from the insurance company using your cash value as collateral.

2. Tax Benefits

You can access your cash tax free up to your basis. You can take a loan and not pay taxes. And your interest gained in your policy is tax deferred, meaning you have tax free growth on your principle. Finally, your death benefit goes to your beneficiary income tax free.

3. Fixed Premiums

Unlike other permanent life insurance types, whole life insurance premiums are fixed. The primary advantage of fixed insurance premiums is you don’t have to be concerned that your policy will be underfunded as you age as your policy’s cost of insurance increases.

4. Guarantees

Your whole life policy offers a guaranteed rate of return of between 3-4%. Now, compare this to the average savings rate offered by commercial banks.

In addition, although not guaranteed, you also receive an annual dividend. The consistent, guaranteed return offered by dividend paying whole life is a great benefit vs keeping your money in a commercial bank and earning very little return.

In addition, whole life insurance is private, does not interfere with your ability to qualify for loans, including student loans and includes creditor protection in many states.