Infinite Banking: High Cash Value Life Insurance

Becomingyourownbank.comIn 2008, when the market had a significant crash, I had a new client come to me. I’ll call him Andrew, and you’re going to be shocked by what he said.

He lost half his balance in his 401k. But, if that isn’t shocking enough, the way he phrased it blew my mind.

He said to me, “I’ve been saving money for about 30 years consistently. So, I lost 15 years of my life savings in this (2008) market crash.”

That was stunning. He was looking at it the right way. He hadn’t lost half his 401k, he had lost half his life. 15 years of his life were now erased because of one bad year.

And so many people were in that same position.

Infinite Banking simply uses the advantages of high cash value life insurance to help you protect and grow your money.

Contrast Andrew’s story with that of my relative.

I have a relative, he’s been stockpiling money in his high cash value life insurance policies for years. When 2008 rolled around, prices dropped significantly.

While everyone else was panicking, he used this opportunity to his advantage. He bought 2 properties at the same prices they sold for in 1984. A huge win for him. Today, they have more than doubled in value.

High cash value life insurance won’t solve your investment problems, it won’t guarantee you that you will make smart financial decisions. But quickly, let’s compare the 2 stories.

Andrew had his money locked away in a place where he had little to no control. On top of this, his money was always in the market.

Doesn’t that just seem like a bad idea? Isn’t the point to buy low and sell high. However, most people buy always. They have a chunk of money, and it has to be put somewhere.

For most people, it’s constantly at risk in the market.

By using high cash value life insurance (properly structured) we have a place to put our money where it will get steady, significant, tax-advantaged growth. You also have access to your money.

If you want to use the money in your life insurance policy for business, investment, or personal use, it is easily accessible.

However, if you are just trying to get the risk out of your investments, you can also use it just like a high interest rate savings account.

Let’s look at some of the benefits of Infinite Banking and high cash value life insurance. (Understand also that this has to be a properly structured type of life insurance policy by done professional.)

Rate of Return

To me, the most important part of an investment is the rate of return. However, that rate of return is only as good as the risk associated with it.

One study showed a whole life insurance policy (over a 27 year period) averaging a 6.52% annual rate of return. This is after all fees.

Along with the fact that this grows with no taxes, and if treated properly will never be taxed, this is the equivalent of around 9% growth in the stock market at a 30% tax rate.

Not to mention, just like in the story of my relative, at any time during the life of this policy the owner had access to his capital. If he could do better than 6.52%, he could always take some of the money and put it into other investments. Then, as those investments performed, he could repay the money back into his life insurance policy.

Safety

Next we have safety. Life insurance offers guaranteed minimum returns.

On top of this, life insurance isn’t a market investment. Historically, the companies that we use have paid gains, in the form of dividends, over the last 100+ years. This means that through the great depression and multiple recession these life insurance companies paid out profits.

These companies put safety first. This is why so many banks store large amounts of cash in life insurance companies. Maybe something you didn’t know.

Tax Advantages

Life insurance grows tax-free. If we treat this properly, and die with the policy in tact, the death benefit will transfer with no income taxes.

As long as we plan ahead, we will never pay taxes on any money put into an Infinite Banking policy.

Access to Money

This is so important. There are a million reasons you might need your money: emergency cash, buying a car, starting a business, funding your business, investment decisions, buying gold, or any other reason you might think of.

Using the Infinite Banking Concept offers us easy access to our money. These life insurance policies are designed so that we can access our money anytime we want.

Death Benefit

When we say that life insurance has had a 6.52% growth annually over the last 27 years, this is after any actual insurance costs. This means that, on top of the growth, we also are being provided a death benefit. This is huge. It puts your risk of death on the life insurance companies shoulders, while also getting significant growth and all the other advantages above.

This death benefit is also permanent. And, eventually, can help you reduce or eliminate any term insurance costs you would normally be paying.

Infinite Banking In Summary

Every situation is different. Infinite Banking doesn’t fit everyone. However, it does solve some huge problems we face today. This may or may not fit you, however, you can read our newest book, “The Simple Banking System,” and watch some easy to understand videos by signing up for our free tool kit here.

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We are also constantly adding and updating the information on this page.

After this, feel free to contact us by email, phone, or any other way you decide works for you.

And one more thing…

We know this won’t work for everyone and every situation, but it’s something you should at least know about. If you aren’t sure exactly how or why it would work for you, let us know, and we can help steer you in the right direction.

We hope to hear from you soon. Feedback, comments, or questions are always welcome.

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