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 what exactly is the infinite banking concept and how does it work? In this video, Paul Haarman and Mike Dillard discuss the way the infinite banking concept works.

Is there a Infinite Banking Concept?

Investing secrets

The Infinite Banking Concept involves investing in a permanent life insurance policy that is designed to build large cash values and death benefit over time. As these policy cash values increase, they then become available to the policy owner for loans at very favorable interest levels and terms.

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

Here’s where it gets fun. In the event you pick out the right life insurance policy, it's going to 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 concurrently.

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 bank 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 also pay cash for it, you're INCURRING A COST (lost interest) of 5% around the use of your money, correct? Are you not paying interest? Of course you are. You’re paying interest by to not get it. You’ve chosen to move ignore 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 to life insurance policy loan. If you borrow the same $20,000 for your car from the insurance policy, you will pay interest of, say 6% for that use of your money BUT - and here’s the important difference again - THE INSURANCE COMPANY WILL CONTINUE PAYING YOU INTEREST OR DIVIDENDS In your MONEY AS IF IT Remained as INSIDE THE POLICY. Your mathematical mind starts now and quickly calculates your actual cost with the policy loan is NOT the full 6% but is actually the main difference between what you pay the insurance carrier and what you are receiving back from their store. In practice, this “cost” for the utilization of your money is very negligible (1-1.5%) inside the short run and is normally FULLY RECOVERED Along with a PROFIT in the long run (when the income tax-free death benefit is eventually paid in your heirs).

 While this difference in financing costs might not initially strike you as meaningful, consider whatever you finance (by paying cash or borrowing) compounded throughout your lifetime. Then, consider that banks carry out the very same thing and look at what size they grow. Then, consider that it can be proven that most people spend between 30 and 50% of the annual income on financing charges on the whole course of their lifetime. Then, suppose some or perhaps even the majority of that money could be recaptured and compounded in your own pile of wealth and reinvested again and again for your own enjoyment later in life since your resources continue to expand exponentially. This wealth welcomes in 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