Infinite Banking and changes to 7702

[scagnt83]

As far as the second example it sure is. It depends on what their needs are. They can pay a higher interest rate to the insurance company because they are a real estate investor and they need time on his project before he starts paying the loan back or he has an option to use a regular lender, my point they have options. Especially right now it's when it's harder to get a line of credit.

I am one of the biggest advocates for CV life insurance on this forum. Im all for using every aspect of the policies benefits.

However, you said "use it as collateral for a loan from a lender". That is not infinite banking. That is no different than if I used a CD or just a savings account for collateral for a lender based loan.

Now in this example you mentioned taking a loan and paying it back. That is what infinite banking is based around. Not trying to be difficult, just trying to keep things technically correct since there tends to be lots of questions on here about IB.

And Im not really a fan of the "systems" around IB (Ive attended multiple Nelson Nash workshops in the past), just a fan of simply using the CV in the various ways possible. As you pointed out, it can be a great asset for real estate investors.

 

[Allen Trent]

I am one of the biggest advocates for CV life insurance on this forum. Im all for using every aspect of the policies benefits.

However, you said "use it as collateral for a loan from a lender". That is not infinite banking. That is no different than if I used a CD or just a savings account for collateral for a lender based loan.

Now in this example you mentioned taking a loan and paying it back. That is what infinite banking is based around. Not trying to be difficult, just trying to keep things technically correct since there tends to be lots of questions on here about IB.

And Im not really a fan of the "systems" around IB (Ive attended multiple Nelson Nash workshops in the past), just a fan of simply using the CV in the various ways possible. As you pointed out, it can be a great asset for real estate investors.

Completely agree. CV has numerous uses & I love all my permanent policies. I have just cringed too many times over the years when sales systems are used as a method to overcome objections. IE stop putting money in employer 401k & do this IB plan or BYOB plan. Some of these were done in conjuction with taking equity out of house via HELOC & putting the funds into life insurance (sometimes MECs). Seen some horrific abuse & applications of the concepts which cause me to be more of a skeptic of the design & application of it.

Why is it so hard for us to just promote max funding & list all the various ways it could assist or be there for emergency or supplement retirement, etc. Why do we have to sell it like it is a specific guaranteed plan that will deliver X. Always surprised when some agents or clients get a newly issued policy & say "this isn't correct", it doesn't match the illustration that will pay me X every year, etc

 

[marindependent]

Why is it so hard for us to just promote max funding & list all the various ways it could assist or be there for emergency or supplement retirement, etc. Why do we have to sell it like it is a specific guaranteed plan that will deliver X.

Agreed.

 

[Chuckler]

Completely agree. CV has numerous uses & I love all my permanent policies. I have just cringed too many times over the years when sales systems are used as a method to overcome objections. IE stop putting money in employer 401k & do this IB plan or BYOB plan. Some of these were done in conjuction with taking equity out of house via HELOC & putting the funds into life insurance (sometimes MECs). Seen some horrific abuse & applications of the concepts which cause me to be more of a skeptic of the design & application of it.

Why is it so hard for us to just promote max funding & list all the various ways it could assist or be there for emergency or supplement retirement, etc. Why do we have to sell it like it is a specific guaranteed plan that will deliver X. Always surprised when some agents or clients get a newly issued policy & say "this isn't correct", it doesn't match the illustration that will pay me X every year, etc

What is the max funding strategy you recommend?

 

[Allen Trent]

What is the max funding strategy you recommend?

If client says they can contribute X amount per year, I suggest they buy a policy that legally allows 1 penny less than X to fall under the Max Level MEC premium if the plan is for cash accumulation & use during lifetime. If it is merely leave on money like Bank CD money into a SPWL or a no lapse GUL/IUL, I have no issue with it being a MEC, but I still suggest putting the most allowed into the smallest face amount legally needed & the maximum money going into the overfunding component (PUAR on a WL or Excess Premium on UL/IUL/VUL)

I dont sell & I dont pretend to know which variation of product is best for any given fictitious client. the product can only be chosen with real life people after knowing their situation & I have no issue with max funded WL (PUAR) or max funded UL/IUL/VUL when it matches client needs/wants/understanding. Max funding minimizes obligated premiums & minimizes all the internal costs & fees for the most efficiently.

Saw an example today of a Juvenile policy that 2 weeks ago would only allow $1400 in max deposits per year & now will legally allow $5300. Agent will make no more compensation, likely less, but wow could that policy do much better relatively speaking with the majority of the payments going direct to cash value rather than to costs for too big of a death benefit. (no issue with death benefit being big, that is what term, basic WL, no lapse UL & 2nd to die are for, I just dont like when agents put clients in a million dollar face policy to max out commissions if the plan was for supplemental retirement savings & a $250k policy could have been used