Infinite banking is not a new concept, but it has gained popularity in the past few years. The concept revolves around the benefits found in a properly structured, high cash value whole life insurance policy.
What is Infinite Banking? It’s simply a safe growth strategy that gives the individual more control over their finances. By utilizing whole life insurance, dividends inside of these policies help us grow our wealth. We also have access to our money through policy liquidation or policy loans—the latter of which offers us the ability to pay that money back into the policy.
Many are unfamiliar with the particulars of Infinite Banking. It is not a cure-all investment option that will magically solve your retirement issues. However, it does offer some particular benefits that cannot be found in other retirement and savings plans.
Here are six advantages to Infinite Banking that may make this strategy seem more appealing to those looking for safer investment alternatives.
The main reason an individual would consider using Infinite Banking is to introduce more safety into their investments. Many of those who have found themselves unable to create the growth they hoped for inside Wall-Street stock and mutual fund accounts, or government sponsored accounts, often want to turn to safer investment options.
Infinite Banking offers, in almost every case, the most competitive, safe investment alternative to high-risk investments. When compared to bonds, cds, and other safe investments, Infinite Banking can often provides a much better all around environment.
If safety is something you are looking for, then Infinite Banking may be an alternative investment option worth exploring.
2. Competitive Growth
Any investment needs growth to make it worthwhile. Infinite Banking offers historically around 4-6% growth, or even higher, in a tax-advantaged whole life insurance policy.
In some cases this can be the equivalent of 6-9% pre-tax growth in other income based accounts.
Infinite Banking offers competitive growth for a safe investment strategy. That growth will vary based on certain conditions. Historical growth can never predict future growth, however, understanding what contributes to this growth will help you better understand what you can expect from a safe investment like Infinite Banking.
But safe investors are not the only ones who can benefit from Infinite Banking. The ability to grow your money with safety and competitive interest makes Infinite Banking a reasonable investment option, but the liquidity found in Infinite Banking is what gives the investor the option to do what they want, when they want—which is the key attribute for any successful investor.
Often the difference between a successful investment and a bad investment is timing. Most government sponsored plans force investors to be in the market regardless of the outcome an investor expects.
This means that, no matter if the market is going up or down, many investors are simply along for the ride—relying on luck instead of intuition and education.
Liquidity offers investors the key attribute that makes the Infinite Banking Concept more effective. Being able to use money for better investments such as stocks, real estate, or a personal business gives the investor the ability to make their own financial investment decisions when they want and when it makes sense.
Then, with Infinite Banking, when an investor feels like the economy is too risky to invest in, they can always fall back on the safety and growth found inside the whole life insurance policy until they feel the market environment makes sense again.
Infinite Banking provides the investor with liquidity and options, and a safe haven to store their money when those options do not make sense. This can be the key determining factor to long-term financial success.
4. Tax Advantages
Another key component that Infinite Banking offers is the tax-advantages that can be found in a high cash value whole life insurance policy.
Whole life insurance, by nature, grows tax-free. If the policy is kept until death, that money is transferred income tax-free to the beneficiaries of the life insurance policy.
This way, an Infinite Banking policy can be kept tax-free forever. By setting up the Infinite Banking policy in the correct way, we can increase growth and make the most of the tax-advantages that are found inside of the Infinite Banking policy.
There are few, if any, alternative investment options that offer the same tax-advantages that an Infinite Banking policy can. Whole life insurance has tax benefits that are unique to these types of insurance policies, offering a key attribute for the utilization of the Infinite Banking Concept.
5. Death Benefit
On top of just being a tax advantage, death benefit can provide those we leave behind with a large sum of money, income tax-free. There is no better asset to die with than whole life insurance.
This is not a primary benefit of Infinite Banking, however, it does provide a substantial secondary benefit that can be extremely useful. As a byproduct of whole life insurance, death benefit can help us leave a legacy to those we love when we die—something that is not a possibility but a guarantee.
6. No-Loss Provisions
Even though cash value life insurance offers us safety, this safety also comes with no-loss provisions.
When structured properly, a cash value Infinite Banking policy cannot lose money due to market downswings. There are few products that offer this same no-loss provision, or guarantee.
Infinite Banking policies are illustrated with these guarantees in place, meaning the consumer can actually physically see these guarantees on the policy illustration, or overview.
This is not something that is difficult to determine. These no-loss provisions and guarantees are part of the life insurance contract on a proper Infinite Banking type policy and offer a peace of mind for safe investors that are looking to their future retirement and worried about the negative outcomes of riskier investments.
Infinite Banking Offers Options
There is no one-size-fits-all investment option. However, Infinite Banking does offer benefits that cannot be found in many other retirement or investment plans. The Infinite Banking Concept has many different applications that can be used by different types of investors to accomplish different goals.
The key to a successful retirement and investment plan is knowing what goals you want to accomplish, and then working towards achieving those goals. Infinite Banking utilizes whole life insurance because it is the best product for accomplishing the goals that Infinite Banking sets out to achieve. Always talk to a professional before making any financial decisions regarding retirement and long-term planning.
Shift Frequency © 2018 – Reasons to Consider the Infinite Banking Concept