Be your own bank or another commonly used phrase is “Infinite Banking,” which in essence is a whole life insurance policy structured in a way to create early high cash value growth.
These types of insurance policies are not focused on the death benefit, but they do however provide cash value accumulation and growth which allows you to overfund your life insurance policy and use the money as you very well please while you’re still living.
What Are The Benefits?
The cash value in your policy will continue to grow with uninterrupted compound interest, although you borrowed against the cash value to fund deals or purchase other underlying assets.
In most states, your policy is creditor-protected from liens, levies, and lawsuits.
Here’s what happens when you borrow from your policy vs. a traditional bank:
- Lower interest rate
- You determine the payback schedule
- No credit check required
- Not required to pay back the loan (however there could be tax consequences involved if the policy lapses)
- Loans can be funded immediately
- While your loan balance remains outstanding… your policy continues to get paid dividends and earn interest on the full amount of cash value as if it was never loaned out
- You can repeat this over and over as long as there’s cash value in the policy
Infinite banking is a fundamental way to build wealth that you harness and control. By working on how we think about money and the flow of income and payments you can contain so much more cash that passes through your hands.