The Infinite Banking Concept (IBC) is described by Nelson Nash in his book Becoming Your Own Banker.
Infinite banking in its most basic terms is a strategy of using whole life insurance as a personal source of financing. Sadly, most people won’t go deeper into the concept once they hear the word “insurance”. As a result, they miss out on one of the greatest financial breakthroughs they could participate in. Infinite Banking is the most efficient way of using your money in your lifetime as well one of the most efficient ways to pass on wealth to your family members, loved ones, or charities.
Traditionally life insurance has been reserved for protection purposes, you pay a premium and in case something unfortunate happens to you, your family will be protected. There is, however, another side to life insurance that the general public is not aware of, but big banks, Fortune 500 companies and the very very rich have used and enjoyed for generations. Companies like JC Penny, McDonald’s, Walt Disney, Foster Farms, and Stanford University have used this strategy to start their businesses and to grow their holdings. Banks like Wells Fargo, Citibank and Bank of America have billions of dollars in life insurance, in fact these banks have more of their money in life insurance than in their real estate holdings. Why is that?
They learned long ago, that they can invest in strong insurance companies that have weathered through 13 US depressions, been in business for over 150 years, and paid dividends for every one of those 150 years, by simply purchasing a properly designed life insurance policy. They found insurance companies to be an excellent place to store and safely grow their money, tax deferred, with an after-tax net rate of 4-6% compounded annually over the life of the policy. Good and solid returns.
This is not the only reason, though. Not only were they able to grow their money tax deferred, like a Roth 401K/Roth IRA, but with no market risk, they were also able to access funds in these accounts easily without any penalties and without any qualifications, besides having the actual policy. In addition, while their money is compounding uninterrupted in these policies, they can still use the insurance policy as collateral to finance their investments and general business needs, for example real estate purchases, investments in private equity, payroll, cars, tax payments, and equipment purchases, paying off debt, etc. When you set up an Infinite Banking Policy you will be able to enjoy these same benefits.
Infinite Banking is a process not a product, however it does require a properly designed life insurance policy to use the strategy. Our expertise lies in the design of these infinite banking policies to maximize efficiency and cash generation, while still allowing flexibility in usage. Our goal is to teach you the underlying philosophy of banking, the most profitable business of all time, and explore how this concept can be implemented in your life. For a customized example, please contact us.