How Does the Infinite Banking Concept Work 

The Infinite Banking Concept can be around since permanent life insurance coverage has existed, but it didn’t really gain popularity until the 1970s, when Nelson Nash wrote a magazine detailing this money making phenomenon. So precisely what is the infinite banking concept and how does it work? In this video, Paul Haarman and Mike Dillard discuss how a infinite banking concept works.



Is there a Infinite Banking Concept?

Investing secrets

The Infinite Banking Concept involves purchasing a permanent life insurance policy that is built to build large cash values and death benefit as time passes. As these policy cash values increase, they then become available to the policy owner for loans at very favorable interest rates and terms.



Even in tough economic conditions you still be able to qualify, as Nelson Nash did bank within the 70s and 80s. All that you should do is simply have cash values available and you’ve qualified! The insurance company will put a check inside the mail to you for whatever amount you seek as much as the extent of your policy’s available cash values.



Here’s where it gets fun. Should you pick out the right life insurance policy, it will pay you interest or dividends in your cash values EVEN IF YOU HAVE BORROWED THEM OUT. Put simply, you’ve now found a way to “magically” make your money work for you in two places at the same time.

Infinite Banking Concept Illustration



Here’s a fantastic example of how the infinite banking concept works as supplied by David Haas:



 Now imagine you have a banking account that pays you 5% interest on your own funds. If you want to make a purchase of, say, a $20,000 new car and you pay cash for it, you're INCURRING A COST (lost interest) of 5% on the use of your money, correct? Are you not paying interest? Of course you're. You’re paying interest by to not get it. You’ve chosen to move neglect the from an account that was paying you 5% to an automobile that pays you nothing. Therefore, your choice has still cost you 5% interest on your money - in the form of sacrificed interest.



 Now, back again insurance policy loan. If you borrow exactly the same $20,000 for your car from your insurance policy, you will pay interest of, say 6% for that use of your money BUT - and here’s the important difference again - The insurer WILL CONTINUE PAYING YOU INTEREST OR DIVIDENDS ON YOUR MONEY AS IF IT Remained INSIDE THE POLICY. Your mathematical mind starts now and quickly calculates that your actual cost with the policy loan isn't the full 6% but is actually the main difference between what you pay the insurance provider and what you are receiving back from them. In practice, this “cost” for the usage of your money is very negligible (1-1.5%) inside the short run and is normally FULLY RECOVERED PLUS A PROFIT in the long run (when the income tax-free death benefit is eventually paid to your heirs).



 While this difference in financing costs may well not initially strike you as meaningful, consider all you finance (by paying cash or borrowing) compounded over the course of your lifetime. Then, consider that banks perform the very same thing and look at how big they grow. Then, take into account that it can be proven that most people spend between 30 and 50% of these annual income on financing charges over the whole course of their lifetime. Then, suppose some or perhaps even most of that money could be recaptured and compounded in your own pile of wealth and reinvested repeatedly for your own enjoyment later in life as the resources continue to expand exponentially. This wealth becomes available FOR USE DURING YOUR LIFETIME. These are the basic possibilities of the Infinite Banking Concept.



These details about the infinite banking concept should wet your appetite to learn more. Mike Dillard and the Elevation Group discuss this concept in great detail. For a lot of the infinite banking concept, watch the Mike Dillard Webinar.


Infinite Banking Concept

 

This free website was made using Yola.

No HTML skills required. Build your website in minutes.

Go to www.yola.com and sign up today!

Make a free website with Yola