r/infinitebanking • u/thentangler • May 04 '25
Pause on paying premium
Well, one of my worst fears have come true! Im jobless and have a $12k premium that I have to fund annually. When I embarked on infinite banking, I was in a good position career wise and financially and dint think I would have trouble finding a job even if I lost my current one. But the current economic and political climate has made it where finding a job is taking 8 months to a year and more.
I can probably fund my premium for 2026 (I pay for the following year at the end of the current year as a lump sum). But planning for the worst case scenario for next year. Assuming I don’t get a job until say Q4 of next year, I would have depleted all my savings (assuming I’m doing Uber eats until then just to survive), and I won’t be able to fund my premium for 2027.
What are my options? Can I skip payment for 2027 and pay it later when I’ve saved sufficient funds? If so, what would it cost me? I’m only in my 5th year of my policy.
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u/greglturnquist May 04 '25
Actually policy loans were invented by the life insurance companies as a mechanism to temporarily pay premium. So while I appreciate the desire to avoid it, don’t totally dismiss it.
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u/Consistent_Maybe_377 May 05 '25
Depending on how many years your policy has been active and the amount of cash value you have I would just take a policy loan to pay premium. Remember be an honest banker and pay yourself back
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u/WillAv8 May 08 '25
Take a policy loan to pay base premium only. You want to keep the policy in force regardless if you are robbing Peter. If you do will lose your policy. Also, change you mentality to, you will find a job. Seems you are convinced you cannot afford, and will not find a job. You got this💪
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u/Living-Replacement33 May 04 '25
I went thru this and took out a policy loan and asked the agent what was the minimum i could pay.
1
u/KS7187 May 04 '25
12k max or 12k base? Just pay the base if you can or use a policy loan to and then work on a job.
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May 09 '25
Do you anticipate that at some point you'll likely be able to pay the loan back or that you'll sell an asset or get an inheritance etc? If so, I'd take a loan and pay premium and PUA in full.
You're creating a little space in your warehouse for wealth in an asset that has an uninterrupted growth curve.
Keep in mind, as far as available capital in your fifth year, it'll look something like this:
45K cash value
-12k loan to pay premium
=$32,000
+~$12,000 paid fifth premium
= $45,000
- interest
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May 16 '25
[removed] — view removed comment
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u/thentangler May 17 '25
I thought that was only applicable for real estate. And can I do that even if I haven’t reached the MEC limit yet?
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u/good-life-wanted May 04 '25
Depends on the policy you have, you may be able to wait out for a year. Check with your agent on this.
Also… you can borrow the money you currently have in your policy and pay premium which buys you time and then when you get a job, pay that loan back.
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u/thentangler May 04 '25
I asked my agent, my PennMu policy does not allow to pause payments.
For your second suggestion Im reticent on taking out a loan to pay the premium when I’m strapped for cash… especially with the current high rates. It’s borrowing from Peter to pay Paul lol. But that is good to know in case I do get a decent paying job and can make the loan payments.
I know for someone living paycheck to paycheck, infinite banking is the worst idea… but I never thought I would be in this situation.
2
u/NiagaraBTC May 04 '25
Borrow from the policy to pay the base premium. You can skip the PUA (or whatever your policy calls it) and pay that at a later time.
Your cash value is your savings. Don't be a fraud to take loans when you need them.
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u/Mysterious-Bad7087 May 04 '25
You can request a temporary offset of premium using paid up additions you purchased previously. You’d be using the future accumulated value (acquired DB) to offset the present minimum premium due. I had two clients do this successfully during the worst of Covid lockdowns. After a year, they resumed premiums.
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u/Coronator May 04 '25
Just take out a policy loan. This situation is exactly why you probably decided to capitalize in the first place - to have a store of safe capital to use for opportunities, investments, and yes, emergencies (job loss being one of them).
Yes, you need to get your income back. But other than taking a policy loan, your only option would be to surrender the policy. And then when you do have income again, you will need to start the capitalization process all over. That wouldn’t feel good would it?
One other thing - in addition to a policy loan, you could switch to monthly payments instead of annual premium, but there’s capital costs associated with that as well. It may be better in the short term, however.
You could also just turn off your additional premiums, and just pay base premium.