Cash Value Life Insurance

2021 June BankNotes

When people first hear about the advantages of the Infinite Banking Concept (IBC), a typical reaction is to say, “That’s too good to be true.”

Blog 78 – The Infinite Banking Concept: Why We Believe In It

A lot of our clients are concerned and ask many questions about the guaranteed cash values in IBC policies. We want to make absolutely sure that you understand all the assumptions behind the guaranteed values in these policies.

Blog 75 – Infinite Banking And College Education

The number one concern of most of our clients with young children is how they can assist their children with their college education without affecting their retirement plans.

Blog 74 – Why Doesn’t Everyone Practice The Infinite Banking Concept (IBC)?

Some people are doing quite well financially, and they feel that what they are doing is working fine for them. They have the mistaken opinion that since they feel they are doing well, there is no room for improvement, or to try something they may not be familiar with. Therefore, they are not interested in learning anything about IBC.

2021 January BankNotes

Get-out-of-debt guru Dave Ramsey recently released on YouTube an excerpt
of his show where he called IBC a “scam.” Specifically, someone called in
to tell Dave that his financial advisor had touted the benefits of a Whole Life
policy with a mutual company, including the dividends. Ramsey was aghast,
and explained that since the owners of a mutual company are the customers,
any “dividend” they send to you is necessarily coming out of your own pocket.
In fact, Dave explained, the IRS itself acknowledges this, by calling such a dividend a “return of a deliberate overcharge of premium”; this is why the IRS doesn’t tax it as income. Dave ended the call by telling his listener that he needed to get a real financial advisor, not someone trying to sell overpriced Whole Life insurance.

Blog 73 – Short-Term Versus Long-Term Cash Values In IBC Policies.

Why do the premiums paid exceed the cash value during these first years? Well, it is due to the initial costs of setting up the death benefit and the compensation paid 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”. Insurance companies call this initial cost, acquisition cost.

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

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.

Blog 71 – Don’t Delay Implementing IBC

We have been Financial Professionals for 26 years, and during the last 12 years, we have dedicated exclusively to the design of high cash value dividend-paying whole life insurance policies.

Blog 70 – Key Questions About The Infinite Banking Concept

1)What is the Infinite Banking Concept?
The Infinite Banking Concept (IBC) is an exceptional cash management tool for your personal economy or for your business that gives you financial independence by recapturing interest payments that otherwise would flow to outsiders.

2020 August BankNotes

IBC and Whole Life: Process versus Platform: By Robert P. Murphy

At this year’s Think Tank, I noticed that the various speakers seemed to fall
into two camps. In the first camp, the practitioners stressed their understanding
of the “banking” aspect of Nelson’s ideas. People in this camp explained how
they helped their clients redirect cash flows to allow their clients to “become
their own bankers.” Not surprisingly, people in this camp relied very heavily
on Nelson’s best-selling book, Becoming Your Own Banker, since their
approach with clients followed very closely the approach Nelson uses in his
book to address the reader. Typically the people in this camp would reject
the conventional framework and terminology of the professional financial
industry, saying that only by changing one’s mindset and thought process
could one escape from the bondage of the bankers.
On the other hand, there was a different camp of speakers at the Think Tank. In
their presentations, they explained how they showed their clients that dividendpaying
Whole Life insurance was a perfectly respectable asset class, which
had its own pros and cons. They then explained quite convincingly that in our
current economic and political environment, it made a lot of sense for many
clients to shift their portfolio more heavily in favor of this conservative asset,
because it was superior to the more popular selections (stocks, bonds, real
estate, etc.) on many dimensions. The practitioners in this camp did not shy
from taking on the Dave Ramseys and Suze Ormans of the world on their own
terms. You want to talk about rates of return? Sure thing, let’s just make sure
we’re analyzing the assets correctly, including tax considerations and liquidity.
The more we study it with an open mind, the more amazing it is that somehow
Whole Life insurance has gotten a reputation as an awful financialproduct.

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