So you are finally ready to set up infinite banking and help shape your financial future for the better. Well, there is nothing wrong with taking this approach as it has more to offer beneficiaries. In a nutshell, infinite banking is a concept that allows you to become your own bank by leveraging the value of dividend-paying permanent life insurance policy.
Being your own banker is actually a useful tool when looking forward to achieving financial freedom in the future. The good news is that you don’t have to push yourself to the limits before you finally set up infinite banking. To be on the safe side, ensure you start young while premiums are lower. Since your premium is locked in for the life of the whole life policy, the earlier you decide to get it, the better.
If you’ve done your homework, you may already know that infinite banking is a lifelong process. For this reason, you need to choose from reputable life insurance companies you feel confident will be around for the long haul. That way, you won’t cry foul when the life insurance company you settle on is rendered bankrupt.
It doesn’t stop there since you should also choose a non-direct recognition policy. Remember, whole life insurance policies pay you dividends on your investment. But if you decide to borrow against their value, the insurer might only pay dividends on what’s in the amount. No wonder a non-direct policy will always work to your advantage since it pays your dividends on the full cash value. This is the case even if you’ve borrowed against it.
Last but not least, you should consider adding a paid-up addition rider. Even though there is nothing wrong with paying just your monthly premiums, high chances are it could take you nearly a decade to build significant cash value upon your death. In this case, your beneficiary will be paid the policy’s death benefit. To reduce the chances of losing the cash value you’ve built over a lifetime, it is in your best interest to add a rider on your policy as it gives the beneficiary both the cash value and face value.
Stella Tennant has helped several global brands, which get heard across the digital space, through result driven content & social media marketing efforts. Studying blockchains and cryptocurrencies makes her hopeful of a free and decentralized future.