IBC – Infinite Banking Concept
Keep up to 20% more income!
Best for Liquidity, Safety, Returns (5-8%), Tax-free with NO RISK!
If you need…
- IBC Permanent Life Insurance.
- Lump Sum, Monthly or Annual Payments – set by insured.
- Contracted Guaranteed Interest / Dividends.
- Borrow tax-free while earning full dividends/interest.
How does an IBC WHOLE LIFE policy work?
BYOB (Build Your Own Bank) using whole life insurance refers to a financial strategy where you leverage the cash value of a properly structured whole life insurance policy to essentially “become your own bank.” The concept stems from the Infinite Banking Concept (IBC), popularized by Nelson Nash in his book “Becoming Your Own Banker.” Here’s how it works in more detail.
Why use IBC?
Most of us have been taught to put our money in the bank, take the fees they charge us, pay our bills from that, then put a few bucks in savings with a measly interest rate or put any extra into a less safe investment. Then when we need to buy something, we go beg for a loan with a decent rate and all the fees that go with that. That can take a while.
IBC proposes that you buy a Whole Life Insurance that has a guaranteed interest rate with no chance of loss. You can borrow your cash value (90% of value), quickly and easily, to pay your bills, or buy what you want, while that interest is still compounding in your policy. YOU NEVER HAVE TO PAY THIS LOAN BACK! This is all tax-free including the loan and the benefit when it’s paid out, no matter what you do with it. Your money is also protected against lawsuits and liens.
Core Elements of BYOB with Whole Life Insurance:
1. Whole Life Insurance Policy:
A whole life insurance policy is a type of permanent life insurance that provides coverage for your entire life, as long as premiums are paid. It has two main components:
– Death Benefit: A payout that goes to your beneficiaries when you die.
– Cash Value: A savings or investment component that grows tax-deferred. This cash value is what you utilize in the BYOB strategy.
2. Cash Value Growth:
Over time, the premium you pay for the whole life insurance policy earns interest and dividends based on the companies profitability, not the stock market, accumulating as cash value. With a properly structured whole life policy (often designed with higher cash value and lower death benefit to maximize cash accumulation), the cash value can grow at a steady rate.
3. Policy Loans – The “Banking” Element:
The essence of the “Build Your Own Bank” strategy lies in the ability to borrow against your policy’s cash value. Here’s how it works:
– Policy Loan: You can borrow money, up to 90%, from your insurance company using your policy’s cash value. These loans are tax-free and don’t require you to go through a traditional bank or lending institution, so no qualifications.
– No Loan Repayment Terms: Unlike conventional loans, policy loans don’t require monthly payments. You decide when and how much to repay. However, if the loan and interest aren’t repaid, it will be deducted from the death benefit when you pass away.
– Continue Earning Dividends: Even though you’ve borrowed against your policy’s cash value, it continues to grow and earn dividends as if you hadn’t borrowed any money, allowing for uninterrupted compound growth.
4. Recapturing Interest:
Normally, when you take out a loan from a traditional bank, you pay interest to the bank. With BYOB, when you take a policy loan, you pay interest to the insurance company if and when you decide to pay it back, but since you’re using your own cash value as collateral, it’s like paying yourself back in the long run. Some people use this strategy to finance cars, vacations, business expenses, or investments, essentially using their policy’s cash value to fund their own needs and avoiding traditional bank loans.
5. Flexibility & Control:
– You are not dependent on external lenders, loan applications, or approval processes.
– You can decide the terms of your repayments.
– Your money continues to grow even when you borrow against it, providing liquidity and security.
– You can use your cash value to invest in other ventures, making your money work for you in multiple ways concurrently, dramatically increasing your earnings. With it being tax-free, we have charts showing this can help you earn 20-50% more. Real Estate Investors (and other investors) benefit the most, but remember that you still get the death benefit for your family whether you’re an investor or not.
Advantages of BYOB with Whole Life Insurance:
– Tax Benefits: The growth of cash value is tax-deferred, and policy loans are tax-free.
– Liquidity: You can access funds without traditional banking restrictions.
– Asset Protection: In many states, whole life insurance cash value is protected from creditors.
– Guaranteed Growth: Whole life policies often come with guaranteed growth in the cash value component, which is predictable and less volatile than market-based investments.
Considerations:
– Cost: Whole life insurance policies tend to be more expensive compared to term insurance or other investment vehicles.
– Policy Structure: To maximize the benefits, the policy needs to be structured properly by a professional who understands IBC and cash value life insurance.
– Interest on Loans: While you’re borrowing against yourself, you still pay interest to the insurance company, though it can often be lower than traditional loans.
– Opportunity Cost: There are trade-offs to consider compared to other forms of investment. Whole life insurance policies usually offer lower returns than riskier assets like stocks or mutual funds, but you can’t lose and are in fact guaranteed to make money in interest and dividends with Whole Life.
Example Scenario:
Imagine you’ve accumulated $100,000 in cash value in your whole life insurance policy. You want to purchase a car for $30,000. Instead of getting an auto loan from a bank and paying them interest, you borrow $30,000 against your policy. The insurance company charges you 4% interest, but the policy’s cash value still grows as if the full $100,000 were still in the account. You repay the loan at your own pace, and the interest you pay essentially goes back into the system you’ve created with the insurance company.
In this way, BYOB with whole life insurance allows you to use the cash value as a revolving source of financing while still enjoying the long-term growth and security benefits of a life insurance policy.
ADD LONG TERM CARE (LTC) rider:
▶️ You don’t want to depend on Medicare/Medicaid for your LTC!
You want to be able to qualify for care on a better scale.
▶️ Your family may offer home care now, but what about later?
▶️ Medicare only pays for a limited time. Medicaid takes over.
▶️ Medicaid has a $2K asset limit – everything else must go to your LTC.
▶️ You have to make less than $14,580 to qualify for Medicaid.
▶️ Nicer LTC homes are no longer taking Medicaid!
▶️ Medicaid is cutting back on what they pay, putting more burden on the individual.
▶️ There may not be a bed near friends and family – or not at all!
Summary: You don’t want to have to impoverish yourself to get decent care!
▶️ LTC plans now offer more home care options.
▶️ If you sell your home (or put it in a trust) before the lookback period (5 yrs) for $350K, it will last less than 3 yrs.
▶️ If you have an accident or illness without LTC (or another plan), you, and your family, will not be prepared for the financial ramifications.
▶️ You’re never too young and can get LTC up to 85 yrs old!
▶️ You can buy a Life Insurance policy for your children, who will be your insurable interest, and you, as the owner, can take the income from it to live on. Put it in your trust and they inherit what’s left and can then add to it as well!
▶️ There are programs for every budget!
Did you learn something? There’s lots more – you’ll be surprised!
Top 7 Reasons Why You Should Have a Trust
Wondering whether you need a trust? A trust is a great estate planning tool that can help you manage your property and assets. This fiduciary arrangement can go a long way in ensuring your assets are passed down to your beneficiaries according to your wishes in the event of incapacitation or death.
1. Eliminate Or Reduce Estate Tax
Estate tax can reduce your ability to leave a legacy for your loved ones. Depending on the type of trust you choose, the legal entity will provide a lawful way to avoid or reduce estate taxes and other forms of taxation. This will help to save you money and preserve your estate’s value. However, to ensure you do not violate the law, consider consulting a tax expert or legal professional before funding your trust.
2. Avoid Probate
This is one of the top reasons to have a trust. Probate proceedings can be lengthy, costly, and stressful. Establishing a trust will help your descendants to avoid this process and access assets more quickly. This is because the assets held in a trust fall outside of your estate, and are therefore not subject to probate. Lastly, a trust is a private document that can be used to keep information relating to your estate private, effectively protecting your beneficiaries.
3. Planning For Incapacity
There is no telling what will happen in the future. This is why it is important to prepare ahead of time for the unexpected. Estate planning can play a critical role in ensuring you and your family members are taken care of in case you become incapacitated.
When you set up a trust, you will designate asuccessor trustee. This person will manage your assets, make sure your bills are paid, and your loved ones are protected financially.
4. Protects Your Children
A trust can help you protect your children in several ways. If you have minor children, you can limit their access to the inheritance until they are mature and responsible enough to manage the money. Similarly, you can use an irrevocable trust to make lifetime gifts to your children..
5. Protecting Assets
A trust can be an effective vehicle for ensuring money is used for the intended purposes. This way, money will be available for your beneficiaries’ care after you are gone.
The estate planning tool can also help to keep assets out of unwanted hands. This is particularly important if the family structure of a beneficiary changes as a result of events like remarriage or divorce. In short, your spouse and children will get their rightful inheritance.
6. Creditor Protection
Trusts make for a great way to protect assets from lawsuits and creditors. You can arrange your trust in such a way that the assets in the trust cannot be used to pay off debts in case you become subject to predatory lawsuits and creditors. Certain types of trusts also allow you to protect the assets for your heirs.
7. Greater Control Over Your Assets
A trust ensures you have some degree of control over your assets in a way a will cannot. With a trust, you can give instructions for managing your assets as well as how and when they will be distributed. You will also be at liberty to change your trustee and beneficiaries, sell the property, or even revoke the trust. Because trusts are customizable, they can come in handy when it comes to the distribution of complex assets.
" I thought I had myself covered as far as Long Term Care until they showed me how long my current insurance and savings would last - not long enough! I wasn't truly diversified either."
" I didn't believe their program would work but they showed me how it had worked for them and now I have enough to live on with this extra income."
"The IBC System is absolutely unbelievable. I no longer have to go to a bank to apply for loans - no credit score checks and no taxes but I still earn over 6% interest and dividends."
"My church wants to buy our building in less than a year. With this program we can do it. I haven't seen any other program like it."