Infinite banking lets a person take out loans against their permanent life insurance policy. One would not need to worry about their credit score anymore whenever they want to take out a loan. Furthermore, one can also bid farewell to high-interest rates on debt(s) incurred.
Sounds interesting, doesn’t it!?
Well, it is time to dive deep into what infinite banking is all about.
Infinite Banking – What Does It Mean?
Infinite banking is the process of leveraging the value of permanent life insurance policies that comes with the feature of paying dividends to policyholders. The concept was developed back in the 80s by revered economist Nelson Nash.
In simple words, with the help of infinite banking, one accesses the cash value of their life insurance policy. This means that people will be borrowing from themselves and paying themselves back at a time of their choosing.
The reader can learn how to become an infinite banker at Affordable Life USA.
The Concept Of Infinite Banking Explained
Infinite banking needs one to have a whole life insurance policy. A whole life insurance policy entails a lifetime guarantee given the policy is kept alive by the policyholder by paying the premiums on time.
Compared to other forms of life insurance policies, the premiums one would have to pay for a whole life insurance policy would be steeper. The reason is simple. The premium is the collective amount one is paying for their whole life insurance policy that covers –
- The fees charged by the insurer
- The operational costs of the insurer
- The portion of the policy that covers the policyholder’s death benefit and
- The cash value of the policy is held by the insurance company in a savings-like account assigned to the policyholder.
A significant portion of the premiums paid by the policyholder is channelled directly to the cash value of the policy and will be held in the savings-like account meant for the policyholder.
The funds available in the abovementioned savings-like account can be used by the policyholder by taking out a loan at any time they want. The loan taken from this account is tax exempted and can be used to buy a home or to pay for the education of the policyholder’s children. The cash value of the above-mentioned policy keeps on growing over time given the policy is kept alive by the policyholder by paying its premiums on time.
So, in simple words, the policyholder becomes their own banker by following the principle of infinite banking!
Neat, right!?
Still, feeling confused? Why not learn how to become an infinite banker at Affordable Life USA?
What Are The Benefits Of Infinite Banking?
Several benefits entail infinite banking. Some of them are mentioned below.
- One will be able to borrow any amount from their whole life insurance policy’s cash value without explaining their intent.
- One won’t have to worry about credit checks when they are borrowing from the cash value of their whole life insurance policy.
- All the money one is taking out of the cash value of their whole life insurance policy is tax-free.
- Even when one is borrowing money from their whole life insurance policy, the cash value of the same continues to grow!
Conclusion
Infinite banking might seem a bit confusing but that is not the case. For the best results, the reader is requested to consult a professional financial advisor as they can offer more details on infinite banking.
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