Infinite Banking Lies About Whole Life and Universal Life Insurance

Infinite Banking

For years, proponents of infinite banking have highlighted a certain benefit behind cash value life insurance. The specific benefit has been more closely associated with whole life insurance, and those directly connected with “The Infinite Banking Concept®” have towed a hard line for whole life insurance over universal life insurance. Last summer, a newsletter released by said company attempted to expose the weaknesses of indexed universal life insurance to promote the superiority of whole life insurance in accumulating wealth and providing security for one’s family. What we’re going to explore today is whether the rally against universal life insurance – and, more precisely, indexed universal life – is a just one.

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Allan vs. Pam: Bank on Yourself

Bank on Yourself

Spring is here, time to enjoy warmer days (if you're with me in the Northeast), blooming flours, and a fight between a so called financial educator who hustles a selling system to insurance agents known as Bank on Yourself and a fee based financial planner who is pretending to be a consumer/journalist.  Here's the story.

So what does this all mean?  Pam is being exposed for the swindler she really is?  Allan is looking to knock some competing savings strategies off the table as he competes for your business?  Or perhaps CBS is just doing what all good media outlets do, selling a story.  Let's take a closer look at this, shall we?

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Buy Term and Invest the Difference?

Buy Term and Invest the Difference

You didn't think we'd pass on a chance to tackle this mammoth of the financial planning world did you?  A hotly debated notion for years and years pioneered by a guy who started a company to hawk term insurance under a simplistic mantra that appealed to the common folk that was later picked up by every stock broker and “financial expert” that had something to sell that wasn't life insurance.

So are we readying our spread sheets and insurance illustration software to blow the friable theory of decreasing responsibility asunder?  Hardly, we talk about insurance all the time, the last thing we need is to make this place any more boring–besides, we know the numbers work in our favor, that's why none of us are really afraid of the termites.  If mountaints of numbers and methodology are your thing drop us a line and we'll discuss it in detail.  Depending on the feedback, we might go real pro and dedicate a blog post to it–an extra special treat for the holidays.

Why then are we going to waste your time with a silly post about one of the most giggle-inducing “theories” of modern personal finance?  Because believe it or not BTID is a topic I find remarkable fascinating.  Not because I'm an infatuated practitioner (not even close) but because it's a great example of how in marketing, you don't have to tell the truth, you just can't flat out lie.

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What About My Good Credit?

What About My Good Credit

Every once in a little while this question comes up and recently I had someone ask me about this and decided it was a good topic to address.  We know that when a policy loan is taken, there is interest charged on that loan that is collected by the insurance company.  Now, since whole life insurance is issued by and large by Mutual Insurance Companies the fact that a policy holder is paying interest to a company he or she owns a part of, and participates in the divisible surplus (read profits) of the company, it's not really a kiss-it-goodbye scenario.  Still, though, some people take literal phraseology very seriously (I've been in two…disagreements we'll call them…over it literal definitions this week alone).  So, for those who look at interest charged on a policy loan and say, “I can get better financing than that with my good credit” is this necessarily the moment when we infinite banking hawks sit back down and say it works for everyone except you Mr. and Mrs. 850 FICO?

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Here’s the Best Part, You Can Spend It!

Here’s the Best Part You Can Spend It

Here's something we should address right off the bat that I think a lot of people in the BOY et. al. crowd tend to forget to mention: YOU CAN SPEND YOUR MONEY!  So, if today I'm serving you dinner in the form of financial security, we're going to start first with dessert.  And if it weren't for copyright law (and a little bit of laziness), I might think about stealing a picture off the internet of a young child with ice cream all over his/her face.  But I'll just let you envision that instead.

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