![]() If you have an IBC policy created by an IBC practitioner from NNI, you will likely have a policy that gets better every year going forward. The catch is that it takes time to capitalize. Pirates of Manhattan II by Barry James Dyke. You need to read some books and understand more about human life value :) If you cannot imagine it’s extreme usefulness after reading Nelson’s book, then it’s not for you right now. It is a Concept and the Infinite part refers to the ways you can use it. IBC may not make sense to you at this point in time and that’s fine. You pay your $10k annual premium and your CV will increase by $20k, $30k, or more and will continue to do so for as long as you live.Īs for paying “double” interest, that may be true depending on how you use it but if the numbers make sense does it matter? Even if you were paying 8% overall interest (ignoring the fact some of the interest paid to the insurance is passed on to you as dividends) but you can make 15-20% in gains that’s a 7%-12% gain. If you started a policy today, as you approach your expected mortality age your annual cash value growth will be several times whatever your annual premium amount is - I.e. The policy only gets more efficient as time passes (especially at your age). They may or not make sense for you to use given particular circumstance but are not the preferred method(s) because they interrupt the compounding. There are multiple ways to receive your money “back” without taking a loan. It will provide a foundation for you to build your own “bank.” I would suggest you read Becoming Your Own Banker by R. All while your capital is growing uninterrupted inside your policy. Properly structured (consult an attorney and/or CPA), you can deduct the interest paid to the insurance company from your taxes. Your company uses the loan to increase its earning. An easy example is to offer a hard money or bridge loan to a real estate investor.Ī more advanced example would be to take a policy loan and turn around and loan that money to your company for a higher interest rate than the insurance company is charging you. There’s numerous ways to use the loan to make additional profits. Skipping ahead, to leverage your cash value for investment purposes you need to find a way to arbitrage the interest. A properly structured and capitalized policy could provide you a source of passive, tax free income for years while still providing a substantial death benefit to your beneficiaries. There are multiple ways to receive the same amount you paid in premium and much, much more. ![]() It is not “fair” to say you never get your money back. Ideally whatever you use the loan to purchase will also generate income you can use to repay the loan plus additional income. To a certain extent the amount of dividends your policy will earn increases the more you “use” (take and repay loans) your policy. Your capital is accumulating inside the policy at a set interest rate plus dividends. In addition you need to consider all the parts to the equation. In the US in the 1980s mortgage rates were above 20%. ![]() Your statement that current policy interest rates are rather “high” in the context of the period with the lowest interest rates in recorded history. Whole life and similar policies require a long-term commitment to see fruitful results. Therefore, I believe one should view this as a lifetime tool for building wealth. ![]() Not only that, but when you borrow against your policy and paying back these loans with interest, you are increasing the base cash value in your policy allowing you to have more future borrowing power (along with an increasing death benefit). Inside of this policy you can have guaranteed growth at a higher rate than savings account without ever subjecting the cash value balance to much risk (less a lapse of a policy loan). I think whole life is best viewed as a supercharged savings account with an ever-growing death benefit - properly setup, of course.Ī whole life policy is best viewed as a TOOL for wealth accumulation. It’s best to use this strategy alongside regular investing and not relying on whole life as your entire investment strategy. Well sure you could invest the difference but you’re also taking the risk of the invested money not being there when you need it most (i.e. ![]()
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