The Infinite Banking concept is a key strategy to leverage a whole life insurance policy’s cash value. Infinite Banking with Whole Life Insurance is using the cash value of your whole life policy to lend yourself money. While you have “loaned” the money to yourself, you continue collecting a dividend on those borrowed funds. Essentially, you are becoming your own banker.

How Does Whole Life Insurance Generate Infinite Banking Cash Value ?

It begins with having a trusted insurance agent that structures your whole life policy correctly for Infinite banking. When an agent puts your best interests first, they design the whole life policy to maximize cash value growth. Max cash value is key to a successful infinite banking strategy. To be effective, the whole life policy needs to be structured to minimize the death benefit portion and maxmize the cash value.

GUESS WHAT! Insurance agents are compensated more heavily on the “death benefit” portion of a whole life insurance policy. For an insurance agent to maximize their commission they need to prioritize the “death benefit.” At Top Whole Life, we structure policies by putting every possible dollar permitted into the overfunded cash value portion of the policy when Infinite Banking is your primary policy goal.

For Example: a Mass Mutual Insurance 10-Pay Whole Life Insurance Policy (paid up in 10 years) will have a higher net dividend than a pay to age 100 policy.  This will give the policy holder more money and faster to use for Infinite Banking.

How Can I Get a Whole Life Dividend on Borrowed Money?

Insurance companies with NON-DIRECT RECOGNITION are the key to Infinite banking with a whole life insurance policy. Non-direct recognition is a fancy term for an insurance company paying you the annual dividend EVEN IF you have borrowed the money out of the cash value. Alternatively, direct recognition companies pay out a reduced dividend on the loaned-out money and a full dividend on money remaining in the cash value. This results in the borrowing cost of the money being all or partially reimbursed by the insurance company’s annual dividend. Mutual companies tend to have a better loan structure and higher dividend. There are several strong mutual insurance companies that have non-direct recognition. Mass Mutual is one of the strongest! A high paying dividend and non-direct recognition make Mass Mutual a strong candidate for implementing Infinite banking with whole life insurance.

What’s the Catch with Infinite Banking?

There’s a reason it’s called Whole Life INSURANCE! If you put $100,000 into a Whole Life Policy day 1, you won’t be able to access all $100,000 immediately. Government regulations require a specific percentage of the whole life insurance policy structure to go to actual death benefit insurance. This means your money will grow over time with the dividend and should eventually “break-even” and then surpass the total cash outlay of the policy. However, the break even point may take several years.

At Top Whole Life, we work with you to minimize the break-even point for Infinite Banking. We structure the policy with the proper premium amount, payment frequency and duration. All of these are key factor in making Infinite banking work.

Key Takeaways

-The Infinite banking concept is a way to maximize your whole life policy using the cash value component of the policy to lend yourself money with minimal or potentially no interest expense.

-Top Whole Life specializes in structuring life insurance plans that support the infinite banking concept by partnering with Mutual Insurance Companies with Indirect recognition.

– Mutual companies tend to have a better loan structure and higher dividend.

– With an infinite banking strategy, the loans are typically paid back, so you can borrow from the policy an infinite number of times.

Understanding the facets of your whole life policy are essential in getting you the most out of it. Speak to one of our specialists today at 1-209-TOP-LIFE (867-5433) to see what the best option for you is. 

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