Blog 98 – How To Maximize Your IBC Policies

Pedro Palicio On The Infinite Banking

Nelson Nash’s “Becoming Your Own Banker” emphasizes the fact that you “finance” everything you buy. You either pay interest to someone else, or if you pay cash, you give up interest that you could have earned.

Nelson recommends that you take policy loans to finance the things that you need to purchase and then pay back your policy loans, not at the annual interest rate that the insurance company requires, but at a higher interest rate commensurate with what other financial institutions or credit cards would have charged you. Please, refer to Blog 95 for the types of expenditures suitable for policy loans.

Let’s understand that when you pay back a policy loan at the interest rate that the insurance company is charging you, you free up the cash value that was collateralizing your loan, but the interest payment goes to the insurance company, not to your policy. When you pay your loan back at a higher interest rate, that extra amount of cash goes directly to your unscheduled Paid-Up Additions rider, making your IBC policy more cash efficient.

Even if you don’t take a policy loan, you can make your IBC policy more cash efficient by contributing cash payments to your unscheduled Paid-Up Additions rider.

But can you make your IBC policy infinitely more efficient? The answer is “no”. As you increase your contributions to your unscheduled Paid-Up Additions rider, you will get to a point where you have maximized the cash value efficiency of your IBC policy and further contributions to this rider will make your policy to become a Modified Endowment Contract or MEC. At this point, you have indeed maximized the cash value efficiency of your policy. 

What happens if you have extra cash in hand? Nelson himself mentions that the Infinite Banking Concept is not a single policy, but a system of policies. So, when you have maximized the cash value efficiency of one IBC policy, it is time to start your second or third IBC policy. Nothing gives you more peace of mind that having a system of IBC policies where all of them are maximized for cash value efficiency.

You can always contact us to determine the amount of contributions that you can make to the unscheduled Paid-Up Additions rider of your policies, of to determine if now is the time to start your next IBC policy.

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

We are experts in designing high cash value dividend-paying whole life policies.

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