You should start by withdrawing funds from your investment accounts. In any year in which your investment account loses market value, the following year you don’t withdraw funds from that account but instead you withdraw funds from your IBC policy.
Back in the September 2012 issue of the Lara-Murphy Report, I tackled an older blog post by financial guru Dave Ramsey where he strongly attacked the idea of using permanent life insurance as a savings vehicle.1
There is a lot of confusion in internet blogs about borrowing or taking a loan from your IBC/Banking policy. Let us make it absolutely clear that when you take a loan from your IBC policy what you are receiving is money from the general account of the insurance company that issued your policy, collateralized by the cash value of your policy.
WHO BENEFITS FROM A GIANT HOSPITAL BILL?: Interview With Keith Smith, MD
Dr. Keith Smith knows the theory of Austrian economics, but he’s also doing something about it. He is lowering medical prices dramatically by seceding from the system.Dr. G. Keith Smith is a board certified anesthesiologist in private practice since 1990. In 1997, he co-founded The Surgery Center of Oklahoma, an outpatient surgery center in Oklahoma City, Oklahoma, owned by over 90 of the top physicians and surgeons in central Oklahoma. Dr. Smith serves as the medical director, CEO, and managing partner while maintaining an active anesthesia practice.
In 2009, Dr. Smith launched a website displaying all-inclusive pricing for various surgical procedures, a move that has gained him and the facility international attention.
His most recent effort is the launch of the Free Market Medical Association, which provides a platform where those seeking to obtain high quality and affordable health care can find free market-minded providers, both physicians and facilities.
Last month, I began this series, which tackles the question: Does IBC “work”
for people who are older and/or in poor health? Many people are concerned
that the “pure cost of insurance” will be so high in such cases, that practicing
IBC will be too expensive, or will have “too much drag,” to be sensible.
Those of you familiar with Nelson Nash’s “Becoming Your Own Banker” know that to obtain efficiency in the generation of maximum cash values in your IBC policy, you should design it as close as possible to the MEC line.
On the other hand, if you follow Nelson’s teachings, you also know that when you take a policy loan against the cash value of your IBC policy, you should repay your loan at an interest rate comparable to the one that an alternative source, let’s say a credit card, would charge you. The dollar difference between this rate and what the insurance company is charging you, should be deposited in your policy as an additional contribution to your PUA rider. This means that you should have enough capacity in your PUA rider to accept this additional contribution. But wait a minute, if you have built this additional capacity in your policy, it means that it is not as close as possible to the MEC line for maximum efficiency. How do you solve this dilemma?
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.
One Of the most common questions we get from the public is whether IBC “works” or “makes sense” for someone who is older and/or in relatively poor health. People naturally worry whether the “pure cost of life insurance”— which is more expensive for older and/or sicker individuals, of course— at some point could make IBC impractical. If so, would it be better for people in this situation to take out IBC policies on others who are younger and/or in better health?
COMPARING U.S. BANKS TO THEIR FOREIGN PEERS: By L. Carolos Lara
Everybody wants to know what makes the banking policy or Infinite Banking policy different from other types of life insurance policies and how do they go about designing the right policy for them. Now, here is the secret: the policy designer should take into consideration all the observations indicated below.
The designer first starts with a dividend-paying whole life insurance policy from a mutual insurance company. When designing a banking policy or Infinite Banking policy, you don’t specify the desired death benefit, but the annual or monthly contributions that the owner will be comfortable making to such policy.
