Becoming Your Own Banker

Blog 95 – Pay Cash Or Take A Policy Loan?

“Should we pay for this with the cash we have sitting in our bank account, or should we first put that cash in our IBC policy and then take a policy loan to purchase the needed item?”

2023 January BankNotes

OPTION VALUE EMBEDDED IN WHOLE LIFE POLICY
One obvious difference between a whole life policy and a term policy with the same death benefit, is that the former gives the policyholder the option to maintain coverage for life. (This after all is the reason we call it “permanent life insurance” and the plain vanilla “whole life” policy.)

Blog 94 – Misunderstandings About Whole Life And IBC Policies In Particular 

As always, we want to educate our clients and prospects on the details necessary to design and understand the mechanics of an IBC policy. In a typical situation, we would have an individual who wants an IBC policy contributing a certain amount of dollars a year (the annual premium) for so many years. Depending on the individual’s gender, age, health status, and lifestyle, you need a death benefit of at least a certain amount of dollars to avoid the IBC policy from becoming a Modified Endowment Contract (MEC) and losing the tax-free distributions advantages.

2022 December BankNotes

“MEC” Defined: The acronym “MEC” is short for “modified endowment contract.” To say
that you “MEC”ed a policy means that you stuffed it with too much money and hence the IRS will now cease to classify it as a standard life insurance contract.

2022 November BankNotes

Conclusion: The reality is that the existence of policy loans against cash values dates back to the mid-1800s, but the life insurance industry has never vigorously promoted them.

Blog 92 – Addressing People’s Concerns About The Infinite Banking Concept 

Capitalization Phase. The difference between the cumulative premiums paid and the cash values during the first few years of the policy is due to the initial cost of setting up the death benefit and the compensation to the financial professional who designs, sells, and will service the policy for years to come. This is what Nelson Nash calls “the capitalization phase of the policy”. It is the year that your IBC policy becomes profitable, and the profitability of your policy is contractually guaranteed to increase every year.

2022 October BankNotes

There are many reasons for believing that a dividend-paying whole life insurance policy from a mutual insurance company is one of the last remaining bastions of safety and growth for our savings here in the United States.

Blog 91 – What Does It Take To Implement The Infinite Banking Concept Successfully?

We get the following question quite often from prospects: What does it take to implement the Infinite Banking Concept (IBC) successfully?

Blog 90 – Infinite Banking And High Inflation

With financial news reporting higher inflation due to our over-inflated government and too much money being printed, it is understandable that many people are seeking ways to personally combat the effects of inflation on their lives.  

2022 August BankNotes

Whatever we may say against or in favor of this idea, the positive thinking movement in 2017 is a multi-billion-dollar industry, which rides the crest of an overarching mantra that preaches that positive thoughts create and transform reality. What I was most surprised to learn from this study was that positive thinking is a uniquely American idea, which had its beginnings in 1820.

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