Have a Question? 
1(800)-805-3707
Have a Question? 
1(800)-805-3707

FAQ​

HOW DOES IT WORK?​ ​

The Infinite Banking Concept teaches one to use a life insurance policy as a financing vehicle. This can be easily linked to real estate. If you have a piece of property earning 5% appreciation every single year, and you take out a mortgage or line of credit against it, that will NOT impact the appraisal value at all. It will keep increasing by 5%. Same deal with a life insurance policy! If you have all your money in the policy, or if you borrow it out, the same amount of interest will be earned.

ARE THERE ANY MINIMUMS OR MAXIMUMS? ​

You can set your minimum and/or maximum contribution to your policy at just about
whatever figure you’d like. When you set up a policy, your money will be going into insurance
and into cash. The insurance cost is fairly flexible. If you are above the age of 60, the minimum
premium amount might not be able to drop below around $1,000 per year, but for the most part,
the insurance cost is easy to customize. For your maximum limit, there are some rules to be
aware of…​

ARE THERE ANY MINIMUMS OR MAXIMUMS? ​

You can set your minimum and/or maximum contribution to your policy at just about
whatever figure you’d like. When you set up a policy, your money will be going into insurance
and into cash. The insurance cost is fairly flexible. If you are above the age of 60, the minimum
premium amount might not be able to drop below around $1,000 per year, but for the most part,
the insurance cost is easy to customize. For your maximum limit, there are some rules to be
aware of…​
The insurance company is going to have a limit to the amount of cash you can put into a policy compared to the amount you are paying towards insurance. They will allow you to put in 10 times your insurance cost per year into cash. ​
Example: If you want the ability to put in $10,000/year into a policy, you cannot have an insurance premium of less than $1,000/year.​
The IRS sets a limit for how much cash you can put into a life insurance policy. This is called a MEC (Modified Endowment Contract). You can actually set this limit at whatever number you want.​
Typically, this limit will be set at the maximum amount you would like to pay into your policy – because if this MEC limit is exceeded, the life insurance policy will be viewed as a taxable investment by the IRS, and no longer just life insurance. ​

Is Using High Cash Value Life Insurance Policies with the Infinite Banking Concept Better Than What I'm Doing Now?

IS USING HIGH CASH VALUE LIFE INSURANCE POLICIES WITH THE INFINITE BANKING CONCEPT BETTER THAN WHAT I'M DOING NOW?

This does depend on whatever you are currently doing! Everyone has a unique financial situation, and when we educate people on this concept and how to implement it, we always have the clients’ best interests in mind. Simply put, this will not be the absolute best financial vehicle for everyone to use. There is no one thing that will work perfectly for all people. However, we do believe that using the Infinite Banking Concept with cash value life insurance policies is safe, convenient, and very beneficial as a whole.​

WHAT IS THE DIFFERENCE BETWEEN DIRECT AND NON-DIRECT RECOGNITION?​

A Non-Direct Recognition company (like Mass Mutual and New York Life) does not “recognize” when a loan is taken out of a policy. They will credit the same dividends to unborrowed and borrowed funds.
A Direct Recognition company (like Guardian and Northwestern Mutual) does recognize when a loan is taken out of a policy and actually credits a higher dividend rate on any borrowed funds. This way, the policyholder does not feel like they are being “punished” or penalized for taking out a loan.​
With these 2 companies specifically, there is a small catch: they become Non-Direct Recognition when a policy reaches year 10. ​

WHAT IS THE DIFFERENCE BETWEEN DIRECT AND NON-DIRECT RECOGNITION?​

A Non-Direct Recognition company (like Mass Mutual and New York Life) does not “recognize” when a loan is taken out of a policy. They will credit the same dividends to unborrowed and borrowed funds.
A Direct Recognition company (like Guardian and Northwestern Mutual) does recognize when a loan is taken out of a policy and actually credits a higher dividend rate on any borrowed funds. This way, the policyholder does not feel like they are being “punished” or penalized for taking out a loan.​
With these 2 companies specifically, there is a small catch: they become Non-Direct Recognition when a policy reaches year 10. ​

WHEN CAN I BORROW, AND HOW MUCH?​

When: You can withdraw funds for a loan any time you’d like, even within the first week of starting your policy!
How Much: Technically, all the cash in your policy is available to you. However, about 95% of the funds you have in cash at any given time is a more reasonable amount. Leaving about 5% in your policy can be useful if you do not wish to pay the loan back and/or circumstances arise where you are unable to pay the interest or your premium – that little bit left in the policy can cover those costs and prevent a lapse in your policy. ​

MORE QUESTIONS...​

How can it be used to eliminate debt?
How can it be used to eliminate debt?​
Can I get 3%-6% returns with minimum stock market risk?
Can I decide how much money will go into premium expenses and how much will go into cash?
Should I do a lump-sum contribution?
What is a PUA (Paid Up Additions) Rider and how does it improve my policy?
Can it be completely tax free?
Why doesn’t everyone do this?
What are the main differences between Term and Whole Life insurance?

Get the answers to other frequently asked questions PLUS:

More in-depth info on the Infinite Banking Concept, free consultation and anytime access to one of our Infinite Banking Specialists, sample policies, answers to all your questions, analysis of your current policy(ies), videos, tips on getting started, and more!
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