Infinite Banking Concept

My experience with LEAP from about 1991 to 2000 was that as brilliant as its underlying concepts, your prospect either "got it" or didn't.

It made agents look really smart, but as far as the client cares, it's not what an agent knows, it's what they can communicate.
 
LEAP, Infinite Banking, The Living Balance Sheet, Bank on Yourself are all sales tools that lead clients to thinking Whole Life Insurance is the way to go. There are many misrepresentations that come along with these concepts....."term life insurance is considered an expense, yet the entire premium going into a whole life insurance policy is an asset. This is just untrue as there is a cost of insurance, which is an expense."
 
How much service work is involved with IBC? I mean if a guy has a loan out for his car, one for his boat, and one for his cabin how much work does that take an agent. I understand the theory in concept but it seems like a lot of minutiae for an agent.
 
IMO, a minimum of an annual policy review is required if you're going to commit to this process. If the policyholder declines the review, document this in your files.

It's also important to emphasize that they need to be responsible borrowers to themselves, so you have to teach them how to think about this loan.

Primarily:
Is new loan affordable with their current cash flow?

They understand that they need to pay principle and interest in order to have the funds to re-borrow again. This is ideal.

At minimum, the annual required payment is the interest incurred to be paid out of their cash flow. If not, it will erode against their accumulated cash values.

If you let it, human nature will take over and they will get lazy and NOT pay the loans back.

Also, if you let it, the human nature of AGENTS will take over, they will get lazy and not offer annual reviews to their clients.

If you're going to do this, commit to doing it right.
 
IBC is great for people who are financially stable and have 6 months of cash reserves for when "life happens". If not, IBC is a horrible idea.

Probably 90% of our population does not have financial discipline or a stable employment situation, even if they are self employed. So the risk of them getting through the first 10 years of a WL policy so it can really benefit them is small.

If you were to be comparing it against buying term and investing the difference BTID....for 90% + there IS no difference to invest due to eating too many meals in restaurants and car payments, etc.

Selling WL to those people only hurts them. A much better use of their insurance dollars would be term and DI.

But the others who are stable and have the discipline....you could not offer them a better conservative product than a overfunded WL product from a mutual company or over funded variable UL with strong guarantees.

IMHO, of course.
 
Can infinate banking work for a young family with grade school kids (ie 3 & 6 grade) to start and then when the kids get to college age, use those funds to pay for college.

Instead of putting those funds into an investment vehicle which would be seen as an "asset" on a FAFSA application, would the infinite banking life policy be "overlooked" by FAFSA?\

Also, how important is it to use a "mutual" life company instead of other?
 
IBC is great for people who are financially stable and have 6 months of cash reserves for when "life happens". If not, IBC is a horrible idea.

Probably 90% of our population does not have financial discipline or a stable employment situation, even if they are self employed. So the risk of them getting through the first 10 years of a WL policy so it can really benefit them is small.

I have been recently talking with 2 different agents about the IBC. One is a Nelson Nash BYOB practitioner an one is with BOY. They both drew up 2 completely different mock policies for me and I am more confused than ever.

I am a saver, I pay my credit card bills off every month, I have no debt or outstanding loans. I am unmarried and don't have any kids. However, I wonder if this is a viable plan for me because at my current lifestyle and age I won't have a death benefit to leave to anyone. I do work in a field with a high turn-over and not much job security.

I am afraid of 401ks and Mutual funds because of the horror stories of people that have had their funds cut in half at the time they needed it to retire. To me, this is why IBC looked like a great alternative.

But if a person knows they need to DO SOMETHING to have some kind of funds to retire on, what do you do if the you don't even seem to qualify for IBC? How do I even know that the 2 agents aren't just trying to sign me up for something that can't even work for me?

Frustrated and confused,

Swenea
 
Sounds like you are very discipline with your money when it comes to finances! There are companies out there that can help u setting up your permanent policy to build the cash value much faster!
I don't personally have one policy, but I did start a whole life policy on my kid as a supplemental way to fund their education or whenever when older...
I would say that diversification is a good way to go.... when the stock market crashed in 2007 many people for example business owners were glad that they had bought a whole life insurance policy... they were able to access to their cash value to get through the bear market... anyway, but this is me saying. And you are already way ahead with your finances.

Rogerio H
 
I have been recently talking with 2 different agents about the IBC. One is a Nelson Nash BYOB practitioner an one is with BOY. They both drew up 2 completely different mock policies for me and I am more confused than ever.

I am a saver, I pay my credit card bills off every month, I have no debt or outstanding loans. I am unmarried and don't have any kids. However, I wonder if this is a viable plan for me because at my current lifestyle and age I won't have a death benefit to leave to anyone. I do work in a field with a high turn-over and not much job security.

I am afraid of 401ks and Mutual funds because of the horror stories of people that have had their funds cut in half at the time they needed it to retire. To me, this is why IBC looked like a great alternative.

But if a person knows they need to DO SOMETHING to have some kind of funds to retire on, what do you do if the you don't even seem to qualify for IBC? How do I even know that the 2 agents aren't just trying to sign me up for something that can't even work for me?

Frustrated and confused,

Swenea

First do not do anything until you feel like you know what is going on. If the agents can not explain it then do not do it. I sell IBC policies and it is more about education. How to use the policy and how they work.

Second, a good agent will be able to help and show to use the policy in a way that you will not need to pay in to it forever, but best if you do. Meaning if laid off or have less money coming in it can work.

Third, there are many ways to structure a policy and depending on the company it can change. I am not sure what companies they showed, so there can be difference that way. With in just one company I design policies differently depending on the situation.
 
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