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.
