The Infinite Banking Concept is based upon sound principles of money and banking. As you more fully understand the concept of creating your own bank, you understand that money needs a place to reside where it can be liquid, incredibly safe, and also have guarantees attached. There are many places that your personal banking system could be created, but the simple truth is whole life insurance provides the most amount of advantages. Comparing side by side, total cash in versus total future cash, whole life insurance is proven to grow much more efficiently and safely than other forms of savings accounts or investment accounts, with an added bonus of death benefit on the side.
Whole life insurance has been around for over 200 years, and is still highly misunderstood. We are often told that whole life is too expensive and a terrible place to keep money. When studying a traditionally structured whole life policy this argument does hold some ground. However by structuring a policy properly (with high cash values and low death benefit), a policy can create large amounts of cash value, and quickly. Within the first five years, the policy cash values are near equal the amount of money that has been contributed, and the policy has sufficient growth to cover the complete cost of insurance. This essentially creates a unique, prosperous banking system, with a death benefit on the side which passes on to heirs tax free.
Whole, or permanent, life insurance is the last vehicle of it’s kind – meaning no other vehicle has all the benefits that are found inside of properaly structured whole life policy. Here is a list naming some of those benefits:
-Liquidity, Use, Control
-No IRS involvement
-No 59 1/2 or 70 1/2 rules