The new whole life insurance products have lower guaranteed interest rates, which makes the spread between the guaranteed interest and the dividend rate much larger and since in most cases dividends are reinvested into the polices to buy more PUAs, the policies, long term have more cash value and give the client more money in retirement. The life insurance industry is in good financial strength, and we have now seen evidence that it continues to innovate and deliver excellent whole life products.
The design of high cash value, dividend paying whole life insurance policies, or Infinite Banking (IBC) policies, has two phases. The first phase consists of policy blending, heavy use of paid-up additions, and the typical 10/90 or 20/80 split between the premium going to the base whole life policy and the premium going to the paid-up additions rider. This first phase is quite consistent from case to case and the only variability might be in the premium split due to the total amount of premium (annually or monthly) to be paid, and design restrictions from the insurance company we are using.
PART III Lesson 3 To Start Building Your Own Banking System Content: Page 42-43, Becoming Your Own Banker Fifth Edition
Now, let’s look at Method E. We will call this twin “Insurance Sister.” She uses dividend-paying whole life insurance as a depositary of the necessary capital to create her banking system to finance her automobiles. She puts $5,000 per year into very high-premium life insurance with a mutual company. Recall the diagram back on page 41. (There are some exceptions to this requirement – there are some stock companies that have dividend-paying policies that perform very well).
One of the questions we more often have from our clients is: Should I pay for this expenditure with the cash I already have in my conventional bank account, or should I first deposit that cash as an unscheduled PUA contribution to my IBC policy and then use the cash from a policy loan to purchase the needed item? What they are really asking is if there are any special conditions or guidelines they should consider before deciding whether to use cash or a policy loan for their expenditure.
Of course, the importance of insurer selection must
not be underestimated. Life insurance involves a
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.
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.
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.
In this final installment, Carlos explores the sinister role of the Rockefeller Foundation in global politics, and how Bill Gates has suddenly become a health authority.
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.