Infinite Banking exaggeration?

[SamIam]

I had a recruiter try to get me to sell Infinite Banking concepts to business owners. But when he started to make all these claimed it didn't sound believable from what I know about it. But I should have asked him to explain himself

He said it could help with the following. Can you explain if he correct

1) Lower Depreciation
2) Bankruptcy
3) Voluntary Sale
4)Succession Planning

The other things he said were correct

 

[marindependent]

Oh boy - here we go again with Infinite Banking...

 

[Golfnut2112]

Did he mention high commission for the agent and negative to low returns for the client? Unless they need life insurance, that has to be the dumbest thing our industry promotes. They tell you to be your own bank but you are still paying interest to an insurance company as long as that loan is active. People would be better off buying a conservative mutual fund and just pay the tax. I have yet to meet an agent that pushes that philosophy who has a security license.

 

[SamIam]

Did he mention high commission for the agent and negative to low returns for the client? Unless they need life insurance, that has to be the dumbest thing our industry promotes. They tell you to be your own bank but you are still paying interest to an insurance company as long as that loan is active. People would be better off buying a conservative mutual fund and just pay the tax. I have yet to meet an agent that pushes that philosophy who has a security license.

High Commissions you actually lowering commission if you are only setting up for a 10% base 90 cv. Your paying money to the insurance company for loan purposes while your money has uninterpreted compounding. How is the liquidity in that mutual fund when it's sinking and you have to pull money at a loss. Business owners and real estate investors aren't buying this for an investment, I think you're confused.....I like the concept but some exaggerate that was the point of my post.

 

[scagnt83]

A 1% wrap fee pays a heck of a lot more over 10 years than a WL or IUL policy does.

Comparing a WL to market investments is nonsense. It completely ignores the risk to return ratio (sharpe ratio). Not an apples to apples comparison at all.

 

[Golfnut2112]

Even with the 1% wrap free you will be better off in a conservative mutual funds say 85/15 percent bond stock mix. You would be better putting your money in a shoe box for the first 10 years

 

[scagnt83]

You would be better putting your money in a shoe box for the first 10 years

You should find some different WL products to sell if thats how yours perform. Or learn how to design the product with maximum PUAs so that doesnt happen.

 

[Golfnut2112]

I am using Penn Mutual, the only issue with the shoe box is I probably would forget where I put it. Have you heard anything about Ameritas Life? Got a phone call from them today

 

[Todd King]

Did he mention high commission for the agent and negative to low returns for the client? Unless they need life insurance, that has to be the dumbest thing our industry promotes. They tell you to be your own bank but you are still paying interest to an insurance company as long as that loan is active. People would be better off buying a conservative mutual fund and just pay the tax. I have yet to meet an agent that pushes that philosophy who has a security license.

I think you just don't get the whole concept.

 

[Golfnut2112]

I think you just don't get the whole concept.

LOL probably not. Just like I didn't understand using a UL or VUL as a IRA alternative in the 80's and 90's. We all know how that worked out.