What is the Infinite Banking Concept?
The Infinite Banking Concept is a strategy that focuses on using a dividend-paying whole life insurance policy to create a personal banking system. The idea was developed by R. Nelson Nash, who discovered that by using the cash value of his life insurance policy, he could control his own personal economy.
The process works like this:
- You purchase a dividend-paying whole life insurance policy and overfund it, meaning you put in more money than the cost of the insurance itself.
- Over time, the policy builds a cash value that grows tax-free. This cash value can be borrowed against at any time for any reason, such as buying a car, paying for college, or investing in real estate.
- When you borrow from your policy, you’re essentially borrowing from yourself. You set the repayment terms, and when you pay back the loan, you’re paying yourself back with interest, not a bank or credit card company.
- Upon death, the death benefit is paid out to your beneficiaries, and if managed correctly, the loans do not decrease the death benefit.
The Infinite Banking Concept allows you to recapture the interest that you would normally pay to a bank, finance, or credit card company. Instead, you’re paying that interest to yourself and growing your wealth over time. It’s a powerful way to take control of your financial future. “Your Wealth, Your Way” indeed!
