Frequently Asked Questions
This seems interesting. How do I learn more?
The first thing to do is visit the “Start Here” page. There you’ll find a link to a book titled “Becoming Your Own Banker” by R. Nelson Nash. It’s a very easy, 92 page read, that will answer a lot of questions you probably have right now and will trigger additional questions as your mindset begins to change. After reading the book, if you think that IBC is something you can benefit from (and everyone can) you can reach out via “Contact” link in the menu or any of the “Get Started” links around the site.
What exactly is the Infinite Banking Concept?
IBC often incorrectly described as an investment but it’s really a capitalization strategy. Simply put, savings is the accumulation of cash for short term goals while capitalization is is the process of converting those savings or resources into productive, long-term assets expected to generate future economic value. Nelson Nash will cover exactly how that works in his book “Becoming Your Own Banker“
Why use whole life insurance for IBC?
A trend I hope you’re seeing is that Nelson Nash will cover that in detail in his book “Becoming Your Own Banker.” But, the simple FAQ section answer is that properly structured, dividend paying, whole life insurance, from a mutually owned insurance company offers complete risk transfer as well as guarantees, liquidity, contractual rights, and most importantly control, that few (if any) other financial products offer simultaneously. IBC is the concept, Whole Life is the best suited product to execute the concept. Without digging to deep, it has everything to do with how a Whole Life Policies are built by the Insurance Company’s. After reading Nelson’s book, I’d be more than happy to expand on any additional questions regarding Whole Life as a product and why we use it for IBC.
How safe is Whole Life?
The Mutual Life Insurance companies we use have been in business for well over 100 years and have been paying dividends since day 1. That’s paying back policy owners for around 24 recessions that include 2 World Wars, the dot-com bubble, the housing crisis, the energy crisis, the oil crisis, and yes, even the Great Depression. What exactly does that mean? It means that these companies were managed with care so that they could do exactly what they said they were going to do for owners. It’s worth noting that as a policy owner of a Mutually Owned Company, you are a part owner.
What is the expected rate of return?
You’ll read on Page 3 (the first page of text), Paragraph 6. “This book is not about investments of any kind. It’s how one finances the things in life, which can certainly include investments. It’s not about rates of return. As time goes by, interest rates go up and interest rates go down but the process of banking goes on no matter what is happening”
How accessible is my money?
Contractually you are first in line to have access to the cash value of your policy. After the first premium is paid, it’s typically accessible within a week or two. From the time a request is made for a portion of the cash value to the time it is in your bank account, it’s about 3 days or less. The request takes less than a couple minutes online.
Im a cash buyer, why should I consider this?
No doubt, cash is powerful because it’s liquid, it’s simple, and it avoids “debt” but IBC is about rethinking your thinking. Whether you buy with cash, finance through a bank, or take a policy loan, you are making a financial decision but now you have an additional option which gives you additional control. The other thing to consider is that if you purchase with cash, you are permanently giving up the earning potential of those dollars. For instance, say you are going to buy a $30,000 car. If you pay cash you now have $30,000 not doing anything for you and you have a car. If you take a $30,000 policy loan, that money will continue to grow (contractually) in your policy even though it purchased the new car. The reason is because of how Whole Life Insurance policies are designed which gets discussed in the book “Becoming Your Own Banker.”
Why do I have to read this book?
“Becoming Your Own Banker” is a 92 page book that takes about 3 hours to read and is “a text for a ten hour course of instruction about the power of divided paying whole life insurance” so it goes without saying that would be very difficult for me to teach you about IBC as efficiently as the book can. The text will answer a lot of questions you might currently have, but more importantly it will raise additional questions and we’ll be able to have a more educated, productive, and efficient discussion about those if it’s a concept that you’re interested in starting.