The Infinite Banking Concept is a process in which you accumulate cash value in a properly-designed whole life insurance policy. This cash value is used as an emergency/opportunity fund.
At any time, your cash values are doing double duty: they allow you to leverage them into other assets and at the same time they continue to earn interest and dividends for you.
Are you financially self-reliant? If not, decide to develop your own financial stability through taking control of your earning power, developing multiple streams of income, saving all you can, and concentrating on reliable investments with known or guaranteed returns. That way, even in times of stormy economic weather, you will find yourself on solid ground.
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.
I like to be precise with my terminology, and so for example I draw a distinction between being smart (knowing a lot of facts) versus intelligent (having a powerful mind). In the same vein, I do not throw around the term genius lightly.
Someone could be very smart and very intelligent, but to be a genius you have to be a creative inventor. You have to produce new ideas and frameworks, which others will then argue over and refine.
The recently deceased R. Nelson Nash was smart and intelligent, but he was also a creative genius. He looked at dividend-paying whole life policies, and in particular their standard feature of policy loans, and realized, “That’s not merely an asset that provides a death benefit. It’s also a cashflow-management device that allows you to free yourself from bondage to commercial bankers.”
Where others saw merely protection, Nelson saw a way to become your own banker.
Dr. Robert Murphy builds on last month’s article to make the analysis closer to real-world policies, showing the effect of age and different funding approaches on policy behavior.
Now we continue the conversation to discuss the questions and decisions that come into play during the application process. These questions are relevant to whole life insurance and may not apply to other types of life insurance, especially types with little or no cash value, or life insurance that does not guarantee the death benefit permanently. How will you know? Ask the questions!
Individuals who own one or several dividend-paying Whole Life insurance
policies that are designed in the special way advocated by Nelson Nash’s
Infinite Banking Concept (IBC) are often faced with a perplexing question
and a decision they must make whenever the need arises to purchase or pay
for something.
Questions To Ask BEFORE You Apply For Life Insurance
Nobody wants “buyer’s remorse” when it comes to something as important as life insurance! And yet, we hear it all the time… policy owners who wish they knew what they know now before they bought their policy!
Today we’ll give you some questions to consider early in the process. (There are also questions to consider later, such as specific riders, amount of insurance, beneficiaries, but first things first.) There are important questions you may not know to ask, and additionally, there are the questions that everyone asks that may be less important than you think!
Although you might be disappointed, the truth is that one method is not necessarily superior to the other. Direct recognition versus non-direct recognition is more a game of smoke and mirrors used by the insurance companies themselves to keep your focus away from what is really important. In fact, there are good and bad insurance contracts in both direct and non-direct recognition insurance companies.
The biggest fear that people over the age of 60 have is running out of money in retirement. And for many Americans, this is a very real risk, not an irrational phobia.
