Key Concepts underlying the personal mini-bank of whole life insurance.
Debt Interest Payments
Many years ago a businessman realized that traditional banking practices created tremendous debts for consumers, and the interest on this debt meant that average people paid the majority of their monthly income to banks or other creditors as monthly debt or bills.
Whole Life Insurance
A business man discovered large insurance companies invented a product over 100 years ago, called Whole Life Insurance, which could be used as a personal bank by consumers allowing them to save money and eventually convert all their bank debt payments to payments to themselves via the loan capability of whole life insurance policies.
Cash Value as loan collateral
The cash value of whole life insurance builds up over time and represents Not money you can borrow, but collateral you can borrow against. Think that through clearly. You are not borrowing the cash value portion of the policy, so it stays deposited and continues to accrue compound interest and grow. It is collateral for a loan from your insurance company. So your loan approval is automatic and frequently funded the same day.
Optimization of whole life policy
The whole life policy is a tool you’re using to achieve a goal. You are taking advantage of the tax free accrual of the cash value, the compound interest paid on the cash value and the predetermined policy loan interest rate. In addition, when you pay your whole life insurance premium you are contributing some money to pay for insurance and some money to contribute to the cash value. When your goal is to use the policy as a bank you minimize the portion of the premium which goes to insurance and maximize the portion going to cash value.
Infinite Banking Concept
The focus of the Infinite Banking concept developed by R. Nelson Nash is for you to create a large amount of cash value in your policy, which you use as a mini-bank. The purpose of this mini-bank is to help you redirect all the consumer debt interest payments you make back into your mini-bank account by having you take loans from your bank to pay off outside loans, so all the interest from those loans goes to you.
So instead of paying your bank back 100% of the principle and 18% of the loan value as interest to the bank, you borrow from your cash value and payoff the principle, then pay that principle and interest to your self. So the continued premium payments plus the interest payments mean the cash value or mini-bank continues to grow. Now you benefit, instead of the bank. Now in one sense of the word, you have become your own bank.
Summary
I realize this is a totally new idea and you may be skeptical. I understand because so was I when I first heard about it. However, if you study this subject you will realize that the infinite banking system, as originally created by R. Nelson Nash 50 years ago, uses a financial vehicle called Whole Life Insurance to help you create a small personal account, funded by your life insurance premiums, which can be used as collateral to borrow money at fixed, pre-negotiated, simple interest.
This small personal account starts small, but can grow quite large overtime. It can be used for both small purchases at first and large purchases later.
The beauty of this is in those details; pre-negotiated fixed simple interest loans, secured by the savings account. Plus you can never be turned down and same day approvals are common because your pledging cash as collateral for the loan.
Additionally, Mr. Nash created an educational foundation that teaches consumers about this financial tool. Plus the foundation teaches insurance agents how to sell Whole Life Insurance products, which are specifically tailored to provide maximal cash value accumulation to create this cash fund, which is controlled by the policy owner. This system replaces the large commissions of traditional life insurance products with smaller commissions, but more policies, as happy customers tell their friends and family about this product.
It it is ironic that the 50-year-old Infinite Banking Concept, created by R. Nelson Nash, which predates the development of both the Internet and the Blockchain, provides clear, simple, step-by-step instructions to free you from dependence on the modern banking system. It is equally ironic, that the main tool of freedom; whole life insurance, has existed for over 150 years in this country.
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