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.
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.
Prospective clients need to realize that the cumulative break-even may take a few years due to the initial cost of setting up the death benefit of the policy and the compensation to the financial professional who designs, sells and will service the policy for years to come. That is what Nelson Nash calls the capitalization phase of the policy.
When we meet with clients and potential clients via phone, Zoom meetings, or in person, we always ask how they plan to use their IBC policies and most times they ask for recommendations based on their specific situation.
We always recommend that the cash value be divided into two funds: the emergency fund and the opportunity fund.
A Business Credit survey1 conducted and published in March 2016 by the Federal Reserve Banks of New York, Atlanta, Boston, Cleveland, Philadelphia, Richmond, and St. Louis reports that “cash flow” is the number one problem facing small businesses with fewer than 500 employees. At the same time a Financial Stability Report dated November 2018 by the Board of Governors of the Federal Reserve cites that business-sector debt relative to GDP is historically high and “debt has been growing fastest at firms with weaker earnings and higher leverage.”2 In essence this report insinuates that the very same cash flow difficulty also exists among the larger companies, that is, those businesses with more than 500 employees.
After many years of designing Infinite Banking policies, the number one concern of most of our clients is how they can assist their children with their college education without affecting the retirement plans for themselves. As you already know, the advantage of Infinite Banking policies is the fact that you can reuse the cash value … Read more