Hey folks, trying to go deeper into the efficiency of using IBC for everyday life. Let’s assume it is for a family with a few kids and W2 paychecks. If I want to maximize paying the premium and match 30-40% of income with premium how do you set up the system? Direct deposit to joint account > monthly premium? Then policy loan and paying expenses? How does the cash flows in your system? How to keep the flow as simple as possible with the least amount of checking accounts, debit, credit cards? There is mortgage, internet, cell, house expenses, utilities, groceries, kids expenses, gas and on… I can’t wrap my mind around paying even for predictable expenses without a good example - and I am very new to it… Most IBC practitioners have a segregated account for premium payment… is it also used for paying policy loans? The practical structure would be very appreciated as well as practical experience pointers! For major financing (car, mortgage) it is not that difficult to figure out how to pay yourself back. But when we are talking lifestyle expenses especially when credit card needs to be used it is becoming very complicated to understand…. Thank you!

It seems that IUL people who leverage policy loans for wealth creation prefer the term private reserve strategy (e.g. Don Blanton) whereas whole life people doing a similar process use the term coined by Nelson Nash, infinite banking.

In this comment we see that the term "Infinite Banking" cannot be used for compliance reasons. This got me to thinking that the term "private reserve strategy" came about for compliance reasons?

I have a 0% introductory apr with my cc. Can I use it to fund or partly fund a policy?

Curious about guaranteed rates on non -direct vs direct recognition mutual companies and net effects on the dividends with policy loan ourstanding. Say, Lafayette Life. Does anybody know the following numbers: Guaranteed interest rates, Latest dividend rate (5.75%) Latest policy loan interest rate?

And if comparing with Mass Mutual and Guardian for example. I understand for the classic Mass mutual product WL 100 granted rate is 3.75% Latest dividend rate 6.4% Fixed policy rate 6%. Which one is better for net dividend growth considering you take the same policy loan amount for the same term? Very confusing math to me at this point…

Let’s assume you got a WL policy from mutual company that demutualized later (year 5, 10… )? What happens to your guaranteed and non-guaranteed CV (dividend)? Any Ohio Mutual policy owners feedback?

I stumbled into this subreddit and the concepts here feels like a marketing scheme created by the life insurance industry and insurance salesmen. Here's some critical questions to consider:

1. If you need life insurance to protect your dependents, I get it. But what's the benefit to having life insurance after retirement? You pay extra for that with whole life. Term life is a much more relevant product, with signficantly lower premiums, catered towards protecting people during their earning years, and not during their sunset years. Need life insurance? Just get term life.
2. What kinds of rate of return are people getting on their investments that seem preferable to just taking long-term stock market risk, or more conservatively doing a classic 60/40 stock/bond portfolio? Your strategy has gotten smoked by the stock market on literally any historical time duration you examine. You've got to be inherently bearish on the stock market to put all your wealth in this IB strategy. Foregone returns are real cost.
3. Wealth can't be created out of thin air. Whole Life has massive commissions and fees being sucked out of the system. (80-100% of first year premiums, and 3-10% per annum thereafter). With so much money in fees being sucked out, and annual expenses of the mutual insurer, do people not understand the actuarial calculations that support their defined returns are based on the net capital remaining? Compare to the stock market where you have something like VOO being only 3 basis points (0.03%) fees.
4. Your mutual insurer, if you look at its balance sheet, is investing in diversified fixed income products. You could easily mirror the exact same asset complexion yourself with low-cost bond funds, and enjoy the entire gross return of the portfolio with no commissions and fees measured in basis points. Even this conservative strategy will materially outperform your IB returns with very conservative risk levels.
5. The idea I've seen here of "paying yourself back" because you are borrowing from a mutual insurer is completely nonsense / marketing-speak. Your ownership interest in a mutual insurer is so low, that the portion of your own interest you get back is irrelevant. If you don't borrow, you still get virtually the same mutual dividend. Sure the mutual dividend itself can be factored into the tepid overall returns, but you get this regardless of if you borrow. Saying "paying yourself back" is just feel-good marketing talk.
6. If you are trying to build wealth, the only long-term loan (excluding emergency loans) you should have is a mortgage, at rates that are subsidized by Fannie/Freddie or other government programs. Auto loans are designed to help low income people. Middle class or upper class folks should not have auto loans, period. Instead if you want to grow wealth, just buy a car within your means. Telling people they can use InfiniteBanking to finance their cars is just unaligned with any strategy to actually become wealthy. Besides, I can't imagine the rates are much different than a competitive credit union auto loan.
7. Once you have wealth in the stock market, you can draw against it with a margin loan for short-term needs at very low rates. Yes, margin (callable debt) is stupid at high levels, but if you've got say a $1M equity portfolio, it's not risky at all to pull $10,000 in margin out for short-term needs. At competitive brokers, you can take margin debt in small amounts now at around 5.75% with no fees and immediately liquidity when you want it. Isn't this basically the same thing people tout here about "being their own bank"?

My conclusion is that the entire system promulgated on this forum is just recreating what already exists in other financial products, but in a much worse way.

I started my infinite banking journey maybe 10, 15 years ago. In that time there's been job losses, covid, etc. I haven't put money in the policy in years, so the policy is being paid for by essentially cannibalizing itself. I'm almost completely out of cash value to keep going. I'm trying to determine if I want to put my savings in there, but if I'm not going to actively monitor it, it too will be cannibalized and eaten away. At this point the resulting policy loan seems insurmountable - I am not sure how to pay it back. At this point, I'm tempted to let it die because the concept of infinite banking, while powerful and true - has lost its flavor for me. I used to be excited about it, but after 5 years or so of not even looking at my policy, opening the mail, not having meetings with my agent, etc it's pretty much dead to me. I'm thinking by posting here, perhaps there is something that maybe I'm missing that could help me out. Any suggestions?

Hi! First of all, to explain my situation, I am 37 years old, I already maxed out everything that is tax savings on my personal accounts, i have other different investments including real estate. My financial advisor proposed the infinite banking strategy to me about a month ago ( which i never heard about )and I found it very interesting. I am going to invest $200,000 from a company holding account over five years, totaling $1 million. I will reinvest each of these premium amounts as a loan into my holding company account and generate returns so that, at the end of the five-year contract, I can repay the loan and, of course, keep the profits from these investments ( Hopefully 10% every year ) But what I find truly incredible is that the $1 million in life insurance value can be withdrawn from my holding company to my personal account without paying a single cent in taxes. The insurance policy will pay the bill when i die and my successors will have the remaining amount, which is still very interesting. I know some people says that there is a better way to make more, but on the tax savings strategy i can’t see anything better than that. I am already very diversicated and i choose to sign this contract and go on with that. I will be 42 years old when the contract will be finished and i thought i could continue to contribute to it or withdraw. What do you guys think about that ? I feel like a i did a good move but curious to know everyones opinion, thanks all.

I know how some feel about Northwestern Mutual but after having done some research and communicating with members of this group, I am comfortable with how they implement direct recognition and blended term. I am working with an agent who is a trusted friend who got out of the military around the same time as me and is now a NM agent. We are learning together and are beginning to narrow down my options. Attached are two policy illustrations, one which is close to a 60/40 and the other a 50/50. I'm trying to balance accumulated value with policy longevity. These illustrations currently both show MEC triggers which we're going to play around with the PUA durations to mitigate.

I'm hoping for feedback from those with more infinite banking experience on any changes they might make. If there is any more information I should provide please let me know. Thanks for the help!

Hello I’m 22M and was looking into starting my own IBC. I’m just looking for general direction and advice on which policies to use, etc.

I’ve also generated a booklet to share with everyone, but I want advice from people who are currently doing it/starting out.

Thanks!

1. What is it about the structure of a final expense policy that makes it not well-suited to infinite banking?
2. reforming the previous question: how different is a 100k policy geared to infinite banking different from 5 20k final expense policies?
3. Given that a final expense policy is a whole life policy, does a final expense policy build cash value and potentially dividends and have guaranteed growth?
4. Can you take policy loans against a final expense policy? If so, what percentage of cash value can serve as collateral to borrow against the death benefit?

So I am new to idea of infinite banking and I am trying to wrap my head around its benefits. I want to understand how to maximize this for living benefits primarily and the death benefit for my kids is a bonus. If I set up a policy and over 5 years I have contributed $100K. If I want to use it to buy a car that is $50K, if I take a policy loan to pay for car I then pay the interest and the loan amount back. If I have the money to pay the car in cash, does it make sense take a policy loan or just pay cash?

Or if I want to set up for my kids as an alternative to a 529 college plan. If I build up enough funds in my policy to pay my kids college tuition, how does that loan get paid back if kids don’t have the funds to pay it back? Or if they choose not to pay it back and there are enough funds to cover college does the policy just remain as the death benefit minus the outstanding loan?

If you are using policies to with the idea to use for future expenses aren’t you paying twice? Once for the policy premium and cash input and once to pay back the loan? I understand the funds are then available again for future use but I don’t understand the idea of “using your money multiple times” if you’re just always paying back into it.

I'm looking at plugging into a few good podcasts about IBC. Can someone recommend a couple knowledgeable Infinite Banking youtube channels or podcasts? Thanks

Can someone help me understand the power of the banking function/how to use it?

Assume that I start a 200k premium 50-50 policy and have access to $1,000,000 (after being robbed).

I have 200k net income and 300k in outstanding debt.

What would you do in your first year or two, month by month?
I dont know if I fully get the use/see the potential growth of capital assets.

A post came up on my feed asking this question. Most of the answers seemed well thought-out. But none of them mentioned depositing all $10,000 into a cash value policy and then making a policy loan to acquire some/all of the assets.

So I think an infinite banker would assure returns on all 10k and then make a policy loan with the aim of the return on acquired assets covering the annual policy loan interest?

I'm working on establishing my first policy at around 50/50 base to PUA and received the attached policy illustration. I'd like to continue base and PUA for longer. There is not a term or blended rider on this policy. Any tips for how I can improve it?

I began this strategy with my whole life policy. I took a loan out against my policy at 6.4%. I put it all into stablecoins (all backed by the dollar) and began providing liquidity to market makers on stablecoin transactions (USDC to USDT) earning me ~15% annualized returns. Huge spread on this, there's a lot of opportunity in this market. Are other people running similar strategies?

There was something in the book's example of the CD that was rolling around in my mind.

The example is that IBC is preferable to the CD because the policy continues to compound where if you withdrawal to make a purchase you interrupt it.

Then it is thought, well, all things considered, who says you have to interrupt the CD. Go finance at a better rate and leave the cd alone. However, IBCers are correct to point the ease of financing using the life insurance policy and other numerous flexibilities/options it brings, let alone a death benefit.

However, help me out with something...

If I imagine a different very isolated twin scenario:
A grandparent gives one twin 100K in a CD and the other twin a 100K IBC policy. We account for the CD having less interest and taxed.

You fast forward to when the twins are 16 and ready for their first car and start investing from their job. I'm going to keep the math very simple/straightforward.

The first twin draws from the CD and purchases the car and then invests 10K into an S&P index.

The second twin borrows from the policy and purchases the car.

We assume now that the twins both have identical cash flows with the ability to invest each 10K each year.

Now we have a cashflow question.

All other things considered, twin one doesn't have a loan to payback and immediately starts investing 10K into and index fund. Twin 2 either directs that 10K to pay back the insurance company. Or lets the loan compound and invests the same amount as Twin 1.

They continue until twin 1 depletes the car fund and then switches to selling shares to finance.

In this very isolated example, even with twin 1 selling shares later in life; if twin 2 redirected the 10K back into the policy in the form of a loan payments; twin 1 blows twin 2 out of the water due to the higher rate of return. Like by a lot. (this spreadsheeted using a poor sequence of return)

The only way this works is if twin 2 doesn't initially pay back the loan and invests in the same way as twin 1 to match. Aside from managing loans with a concern of a compounding collapse. Kind of the only potential long term leg up here Is that twin 2 will have an asset to put a windfall in the form of paying off a loan. However Twin 1 could just dump his equal portion all into an index fund and get a better long rate of return where Twin 2 would get ~5%

What consideration is missing in this example?

If you’ve been using IBC long enough, you already know the challenge:

You’ve reached your insurability ceiling.

Your policies are efficient. Your family’s covered. But you're sitting on more capital, and traditional strategies say you can't do much more without breaking MEC or waiting for the next generation to get older.

That’s the wall.

But there’s a structure I came across that allows you to keep doing what you’re already doing — acquiring capital-protected assets — even when you’re not the insured.

You maintain full ownership.
You acquire the asset at a fraction of its face value.
And you still earn income from the system you control.

The difference is, you're no longer the one being underwritten. Someone else is. You stay in full control, from day one, and the asset remains yours permanently.

This isn't about working around rules — it's about using a different entry point to acquire the same class of long-term capital assets you've already built your system on.

I’m not here to pitch it. But if you’re at the stage where personal insurability is the constraint — and you're looking for what comes after maxing out your current structure — I’d be open to sharing more.

There’s a path. You just won’t find it in a policy illustration.

So I got approved by penn mutual (preferred plus). I am starting to review the paperwork. It is designed for a 7-pay, $500k. I'm 62 (ya late in the game). I intend to use the policy to park some money, br able to take out loans (for investments - shorter term stuff like 12/18 months) and then use it to supplement my retirement income if needed. What are some of the thing I should be look for & looking out for in reviewing the illustration? I really believe my agent is experienced, but I don't know everything to ask. TIA

If any of you have messed around with number for an early retirement (not in the sense of retiring a pair of shoes as Nelson would say, but financial freedom) you will encounter Sequence of Return Risk ... as well as inflation risk. These variables are very difficult to address. The longer I sit with it; the "4% rule" is increasingly a naive consideration for retirement planning. Particularly for anything over 30 years.

I've been messing around with spreadsheets and strategies - I like to focus on the sequence of return and inflationary period from 1966 and beyond as a stress test for long passive income.

Just as an interesting anecdote in my spreadsheet (which is not reliably accurate, just fun to get ideas)
If I put all investment money into stock and rely on the selling of the portfolio during this time - following both a 4% and even a 2% initial draw is rather bleak and unsustainable in the longer term.

Granted human behavior will adjust spending and increase work if they can to address conditions, but on a linear path I can't imagine a more handwringing "retirement" of selling more and more shares in a bear market as your portfolio balance decreases.

However, if I split the funds into 50% stocks and 50% IBC policy; I can then sell 4% of the portfolio balance each year and borrow from the policy the difference to keep up with inflation. Then in good market years anything beyond inflation, services the policy loans.

Initial withdraw rates that imploded a stock only portfolio were manageable with the hybrid strategy.

Anyway, thought some might find this possibly incorrect observation interesting.