To successfully implement Infinite Banking requires patience, discipline, long-range planning, and be able to make a reasonable monthly or annual contribution to your IBC policy out of your disposable income for a reasonable period of years.

The question always arises as to what is considered a reasonable contribution. We use the following rule-of-thumb: if you are younger than 21 years old, reasonable contribution should be a minimum of $300 per month (or $3,600 per year); if you are between 21 and 30 years old, it should be the larger of $500 per month (or $6,000 per year) or 10% of your gross annual family income; if you are between 31 and 40 years old, it should be the larger of $1,000 per month (or $12,000 per year) or 10% to 15% of your gross annual family income; if you are between 41 and 50 years old, it should be the larger of $1,500 per month (or $18,000 per year) or 15% to 20% of your gross annual family income; if you are between 51 and 60 years old, it should be the larger of $2,000 per month (or $24,000 per year) or 20% of your gross annual family income; if you are older than 60 years old, it should be either $2,500 per month (or $30,000 per year) or a lump sum larger than $200,000.

The next question potential clients ask is for how long they should contribute to their IBC policy. Since we are talking about creating cash value for them, the answer is to do it for as long as you can afford it. For example, once you exceed the capitalization period of your IBC policy, which is typically the first five to seven years of your policy, this is what happens: the increase in cash value every year is larger than the premium paid in that year and that increase is larger every year. In fact, what you have is a “cash-generating machine” and if you have such a device would you like to stop it anytime soon? We don’t think so!

As we mentioned before, these are just rule-of thumbs and as any rule, there are always exceptions. For example, there are wealthy clients who can make annual contributions well in excess to the guidelines expressed above, and on the other extreme, we have had potential clients who are in their late 60s and can only afford $200 a month for an IBC policy. In this extreme case, we explain to the potential client that it would be impossible to take advantage of an IBC policy and we recommend against it.

Remember, we are always available to advise you on the best way to utilize your 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 http://InfiniteBankingSimplified.com/  or feel free to email us your questions at ContactUs@InfiniteBankingSimplified.com 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.

Blog 72 – How Much And For How Long You Should Contribute To Your IBC Policy.