Blog #15 – Designing Infinite Banking Policies (IBC Policies or Banking Policies)

IBC Vault

A traditionally-designed whole life policy originally maximizes the death benefit that you obtain for a given premium, while the cash value is originally very small or non-existent. This type of design which consists of only the base insurance component, is encouraged by most insurance agents and broker-dealers because it generates better commissions for them, but it doesn’t do much for you as a client during the first 10 to 15 years, except providing a death benefit.

On the other hand, a properly-designed banking policy originally maximizes the cash value that you obtain for a given premium while the death benefit eventually increases to be higher than in a traditionally-designed policy. This type of policy maximizes the living benefits which is the main purpose of the IBC process.

A banking policy is designed by adding to the base insurance component a Paid-Up Additions Rider (PUA Rider) which initially turbo-charges the growth of the cash value and by selecting the purchase of Paid-Up Additions as the dividend option. A term or a term-like rider could be added to increase the MEC limit or to increase the capacity of the policy if the client foresees a windfall or is planning to increase the premiums paid in the near future. The capacity of a policy is the ability it has to accept additional premium payments in a policy-year without causing the policy to become a Modified Endowment Contract or MEC. This type of design reduces the commissions earned by insurance agents and broker-dealers when compared to a traditionally-designed policy, but it sure makes the client happy of its living benefits and eager to give referrals to the agent.

If you would like to learn how you can grow a substantial amount of cash that you have access to at any time without penalties, is unrelated to the stock market, and will generate income that is not included in your tax return, visit our website at /  or feel free to email us your questions at or call us toll-free at 1-844-443-8422.

Isis B. Palicio, LUTCF, MBA
Pedro A. Palicio, MBA, Ph.D.
Infinite Banking Concepts® Authorized Practitioners

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