Insurance Companies Are Lying to You (Infinite Banking Exposed!) 

They come from the returns the company makes from their investments.

Also many of the returns they show you are highly inflated, one showed me a table of yearly returns that basically would mean 12.5% returns per year…. The average return for the S&P 500 over the last 30 years was 10.7% per year. When you take into account inflation its less than 10.7%

What if something major happens in month 2 of your investment journey 🤔

@@shettynischith77 uh... Emergency fund?

A coworker of mine had a father who paid into these premiums for 20 some odd years. Long story short, he passed away and missed a payment while he was sick. The insurance didn’t pay out because he missed out on a payment. It’s a scam. Always ask where the money comes from. Someone profited off of his 20 years of payments. Free money for 20 years these scumbags.

It's too bad, though, that in this video the guys didn't give any examples of why someone might do this. This would be more of a FOO step 8 type option, and they compared it to Manny's step 6 or so. IB is more of a stay wealthy tool than a get wealthy, so that comparison kind of misses the mark. They promote, or at least acknowledge, the 3 bucket strategy. This is sort of a 4th bucket, not a replacement for equity investing. ex 1: opportunistic investors. TMGS themselves show stats of how strongly the market recovers after bear territory. After a 20%+ drop, take a loan from your policy, invest a year or two, collect your double-digit return and pay back the loan. ex 2: entrepreneurs. Need cash to start or expand your business but banks won't give a loan? Use your IB policy. Have you ever enjoyed a Disney movie? You have Walt's whole life loan to thank. ex 3: multi-generational legacy planning. Check out the Rockefellers' success vs. the Vanderbilts'. Granted, IB might not be beneficial unless your clan is well above the estate tax thresholds.

Most Americans have money sitting in a traditional bank earning very little interest and then paying taxes on that interest. There is an alternative, it is Whole Life. Consider the following benefits. Whole Life vs Savings Account 🏦 1. Tax Advantages: Whole life insurance offers tax-favored growth. The cash value accumulates tax-deferred, and policy loans are tax-free. 2. Guaranteed Growth: Whole life policies often come with a guaranteed interest rate, providing predictable growth of cash value. 3. Liquidity through Loans: Policyholders can borrow against the cash value of their whole life insurance without traditional loan approval processes. 4. Non-Correlation with the Market: The cash value in whole life policies is not directly affected by stock market fluctuations, providing a stable growth environment. 5. Death Benefit: In addition to the savings component, whole life insurance provides a death benefit to beneficiaries, which is typically tax-free. 6. Dividend Earnings: Participating whole life insurance policies may earn dividends, which can be used to purchase additional coverage or cash out. 7. Living Benefits: Some policies include riders for chronic illness or long-term care, providing financial support in case of health issues. 8. Creditor Protection: In many states, whole life insurance is protected from creditors, offering a secure way to store wealth. All the best!

I can easily explain why I use my dividend paying whole life as my savings/emergency/ and bond fund.

​@@firecraigLegally, it is not actually paying you a dividend. The IRS defines these whole life policies as paying out a charge after a deliberate overcharge. It's not the same.

@@valleyscharping well aware what a life insurance dividend is. Now, do you know how they are used.

Agreed. I’d also say if young/er and healthy buy longest term you can afford. It will save you thousands in longterm. When/if renewed will prob be double in cost. No joke. I know people who learned the hard way. This was thru diff very respected cos. Most reps/agents won’t tell you up front.

Term is only cheaper if you die at a young age. There are very few term policies that go past age 85 and the life expectancy of a male is age 85 and a female age 90. Your premiums after age 65 in a term policy are so cost-restrictive in the long run whole life is much cheaper and is one of the only products that actually cover you until death. Death is not an if it's a when and the fact is that most people outlive their term policies and they never pay out. Talk about a scam!

If you're going to get term, which I'll agree is better than no insurance at all, consider getting convertible term. God forbid a negative health condition happen to you that makes you ineligible for any future life insurance, you'll at least be able to convert that term into something permanent, since no further medical exam is required.

I like obv sarcasm too. LOL

There's no taxes because it's your own money. You really think the IRS wouldn't tax it? The IRS has it listed very clearly why it's not taxed. Take a moment and think why the IRS won't tax it when they will tax EVERYTHING. It's because it would be actual theft of your own taxed money if they did.

I like this response. Infinite banking is also a popular way to get into rental property investing, the idea being that rental income is repaying the policy loan.

While the money advantage guys understand some of the infinite banking concepts, they clearly have not gone straight to the source of the inventor of this concept. Please talk to someone who is an agent certified from the Nelson Nash institute. Otherwise they are operating with imperfect information and assumptions.

Stop drinking the cool aid....

@@fredericksalyer3304 What Kool aid?

These guys are not being honest about dividend paying whole life policies and the infinite banking concept.

If you didn't understand it before then you really don't understand it now because these guys didn't even get the basic facts right.

@maxpruger837 If I as a single investor have always made greater returns than these insurance products from billion dollar corporations then why should anyone invest in them? My non-taxable equities fund has annualized 26% over the last 5 years, 10.1% when you throw in all my bond holdings. I then just have a 30 year term life policy for short term death benefits. There is nothing these products offer that I can't do better myself.

They can't explain it simply, they are also not experts on the topic.

Do not share this video, as there is so much they get wrong here. Watch one of the three response videos made against these guys on this topic.

Ultimately, if you know that you're paying a premium/extra over term life insurance and that buys you peace of mind, then that's the right move for you and your family. Unfortunately, whole life and especially infinite banking are often touted as incredible products without the salesman sharing the actual downsides/hidden costs. The biggest one that frustrates me is that you get the cash balance OR the life insurance when you die. Not both. FWIW, my term life insurance policy withdrawals directly from my bank account, so I'm never worried about missing a payment. You can ladder out the cheaper term life policies to end at major mile stones (end of mortgage, kids college graduation, etc). Life insurance is to pay for those that need your income when you die. Once kids graduate college, they should be independent. Once a house is paid off, you don't need to make mortgage payments, once you enter retirement, you should have enough saved to live off of. So by buying the cheaper policy and the difference of what the whole life policy would be instead, you'll have built up a nest egg to leave your spouse instead.

I don’t follow your logic. If you pass away suddenly, a term policy would pay out to your husband just the same. With autopay there’s no excuse for forgetting to pay a premium. Almost nobody seeks out these policies, they’re sold them through deceptive practices. Then when the single year life insurance premiums really start to get expensive people get crushed having to pay more. If they want out they pay a steep surrender fee.

Maybe the premiums are eventually paid by the dividends but you are paying so much extra in premiums today. It’s like you’re making the payments on a $100k Mercedes today but driving a $25k Ford. But you’re still driving a cheap car. Buy a cheaper term life insurance plan and put the extra in the stock market or even a savings account.

@@jeffreychatman4000 Well with my husband it is less of a "whoops I missed a payment" and more of a "Thinking about death is morbid and makes me upset so I will pretend I will never die". Estate planning has been a fun time... Term and laddering was discussed but I like that we can pay into this now while we are high income and not later if we retire early, plus this can help with long term care after retirement which a normal term would not. I didn't qualify so we are doing that for me with a patchwork of different policies which isn't ideal. I agree that this whole infinite banking thing doesn't make any sense. It was made very clear that I would get either the cash or the policy, whichever is greater. Better to think of it as an insurance policy with a dedicated bank account that returns about what you would get from a savings/checking account. Why you would take loans from that I have no idea. These tiktok finance folks are wild.

Um....

The federal inheritance tax starts at $11.7 million. Very few states have this tax. The ones that have them (Kentucky, Maryland, Mass.....etc.) start around $2 million to $5 million. Even then, I would seek advice from an estate lawyer about setting up a trust before I'd go out and buy a trash value policy.

Cash it out. Otherwise the insurance company keeps your cash value.

Why IULs are garbage (from an actual fiduciary :) 1. Money never enters the market - With an IUL, the money funding the cash value portion of the policy is never actually invested into the market. Instead, the insurer holds your “cash” and pays a return on the annual growth of a specific index. Anyone selling IUL are not required to have a securities lIC. 2. Growth potential is capped - While most policies have a “floor” of 0% which prevents your cash value from dipping below what you put into it, your growth potential is capped, too. For example, if your policy limits growth to 10% on the index and that index out-performs that percentage, you’ll still only receive the value of 10% in your account. The insurer keeps the difference. 3. No dividends - Dividends are completely eliminated in an IUL policy. Not having the chance to reinvest any earned dividends, as you could choose to do with an individual investment, means you could miss out on a great deal of money from dollar-cost averaging over time. 4. Fees, fees and more fees - IUL policies are packed with fees and charges that will eat into any cash value accrued. 5. Rising costs - The internal cost of insurance continues to rise as you age, which can limit the amount of money going toward any potential cash value. All universal life is A.R.T ( annual renewable term) PLUS: Almost all cash value policies have these “features” built in. • You’ll accumulate NOTHING in cash value for the first few years the policy is in force. • The cash value earns a lower rate of return (often just 2%-4%) than the potential return you could achieve if you put your money into a vehicle such as a Roth IRA in the U.S. • If you borrow from the cash value, you’ll pay it back plus interest. • If you die with the policy in force, beneficiaries receive the death benefit (less any outstanding cash value loan balance) while the insurer keeps any accrued cash value. Unless you have the increasing death benefit option (option b) the consumer will pay more for that option. The consumer always gets screwed when investing in these policies. The only winners are the agent and the company. The BS I hear all the time is it has to be "structured properly." I have collected 64 policies in the last year and I haven't I seen one structured properly.

@@astroman30 I am a financial advisor. I got my life& health license years into the game because Annuities, Long term care and Cash Value life insurance serve an important purpose in a balanced retirement portfolio along with real estate, securities . Having income that is non provisional is so important in a rising tax environment like our current one. An IUL will rarely ever beat the stock market, it isn't designed to do that. However it does out perform the bond portion of a portfolio and net a lower standard deviation of risk. This allows clients to invest more aggressively in the stock market or real estate while maintaining the same amount of risk across the portfolio. If you are max funding a policy you always start with option B and then switch to A when cost per unit will increase (50 or 65). The pay out of death benefit will need the sum of Cash value, Death benefit from B years.

@@astroman30 I think the cost of IUL is it's greatest asset. When funded to Guideline Level Premium the cost basis declines at an exponential rate. The average cost of insurance is .5-1% over 25-30 years. It's most expensive in the beginning and highest yielding later. That compliments AUM accounts that cost more as time goes on because cost is proportional to account value, which should be increasing up to retirement age. Policies can be made even cheaper with a term rider to coverage face value, but appease Tamra,Tefra and Defra so you don't mec. Also the long term care benefits and accelerated death benefit are far less expensive than the client paying directly for it on top of term. Lastly, IUL did not receive dividends but most WL policies are negative cash on cash for the first 10 years. A cost basis study has to be done to even figure out the cash on cash. In IUL it's clearly stated, and can be positive in 2 years. More so, if a client is extremely bullish on a particular year they can pay and additional 1% of CV to get 140% upside on an index with >100% participation rate. There is even a product where the client can pay 7.5%CV to earn 270% multiplier of the Indicies they chose, all in a tax deferred environment with a true zero percent floor to stock market volitility and superior liquidity.

@@earlharden175Simple question, would you rather have 100k in a ROTH IRA or cash value?

@@astroman30 They're different tools on the same team. We fund life insurance after a 6 month savings, no to low debt and an Roth IRA being max funded. So in our philosophy I couldn't have 100k in IUL without already having heavily funded at least two brokerage accounts. We use CV life insurance as a Bond alternative in a comprehensive conservative way to build wealth. David McKnight does great seminars for CFPBs through the power of zero network. One of the aims is to have RMDs set to equal standard deduction in the future so that even deferred income is tax free.

Props to you bro. Just ensure your son knows what he's doing with the money if you don't plan to lock it up in a trust. Even if he knows what he's doing, your grandchildren may still squander it anyway. I understand it won't be your problem by that point, but we need to consider bad apples in the family.

I got both. Yes I did my research heavily in life insurance (grateful I have a knowledgeable Agent to answer every question I have). I also invest in the stock market as well. My advice, just do what is best for you. There is no one size fits all in personal finance

@@tyrecarmon20 if it was just that then it’s fine, nobody would be talking about whole life. The problem is these products are pushed on people who do not need them or want them

A lot of advisors... well, they probably make commissions on selling these whole life insurance products to consumers.

Whole life and IUL are two different things.

@@firecraig yup. I had one of each in my lifetime. Not at the same time. Good fooled twice

@@wmmarquez they are both permanent insurance. If you cancel them you really can’t be mad. You didn’t keep it. Now, if they weren’t with one of the top mutual companies, that’s unfortunately on you.

@@firecraigi did cancel them. And now just have the term life like what I said on my first comment.

@@wmmarquez yep. And that was probably a mistake.

Who was it with?

Then it wasn't a policy designed for IBC, which has anywhere from 60 to 90% of your first year's premium going to cash value. In fact, the technical term for cash value is Cash "SURRENDER" Value. It signifies to the penny how much money the insurance company will pay you if you want to surrender the policy. So if you made even one initial payment of $10K and $8K went to cash value, you could turn around and surrender the policy to the insurance company and get $8K back. Of course, if you continue to make premium payments the dividend compounds on itself and the cash "surrender" value will grow to exceed your premium payments.

@@maxpruger837 These guys should be embarrassed at how little they know about IBC. They're comparing two different tools. Hey, this hammer sucks because you can't use it to cut wood.

They used a time value of money calculator, and solved for the internet rate. They assumed that Isaac started with nothing. Number of payments (N) = 30 Payment amount (PMT) = -10,000 Present value (PV) = 0 Future value (FV) = 532,000 Interest (I/Y) = 3.6 There are other variables, such as whether the payment was made at the beginning or end of the period, and paying monthly as opposed to annually will SLIGHTLY change the outcome; but it’s still going to be around that 3.6 percent range. Also note that, present value (PV) and payment (PMT) are expressed as negative numbers. Hope this helps.

No, I think they talked about $10,000 annual for the life insurance vs $727 for the term policy. though they assumed the investment in the stock market would be 10,000 annually when maybe they should have calculated it with $9273, but that still gets you $1,050,475 by my calculations.

Nope. Thats how astronomical the difference is in cost. I pay about 20 bucks a month for the 500000 dollar policy they mentioned.

I think I heard Bo misspeak somewhere in there. Said “per month” for something and should have been “per year”. Can’t recall where though.

At 5:22. Chart is labeled “Annual”.

Does that even work? AFAIK the insurance has to be inside an irrevocable trust to avoid the estate limit. It would be wise to talk to an estate attorney.

I second what Travis said as I don't know the nitty gritty of estate planning regarding the taxation of life insurance, but I'd ask why you still need life insurance at all when you are 60+. If your savings habits and portfolio are healthy (I'm aware this is a big if, but this is a finance channel after all), theoretically, you should reach a point where you can "self-insure" and no longer need life insurance. Whole life is an extremely expensive way to remove risk from your portfolio. Bonds can do the same thing without the massive monthly premiums, without the need to take on debt (i.e. cash value loans) to access the money, and without locking your money behind surrender fees. I'm personally pretty harsh on insurance products as investments, but for someone 60+, I'd probably even go with an annuity with some kind of refund stipulation before I'd go with a whole life policy.

It’s the cash value based on how much has been paid in. Lifetime with dividend paying companies is closer to 5%. Even the bad example they used will get higher than 3.2%

So in the example $300k was put in and about $532k was accumulated. Still not getting your 3.2%

@@whyclick_tvjust use a savings calculator with 10k/yr for 30 years at 3.62%. Their math is right but what they don’t tell you is that cumulative IRR will go higher the longer you are in the policy. That wasn’t on accident, they did that on purpose.

Run from anyone who is selling you the idea.

Sounds like you are actually practicing infinite banking, which the video said nothing about. Instead, they attacked their strawman Whole Life policy and claimed victory.

100% agree. It actually just makes perfect sense. Everyone should be using Infinite banking whether they’re using a whole life policy or a HELOC or a line of credit. As I mentioned when I got the policy and did all my research I found private money club where you’re able to do the private lending and have your money working for you. Safer than the stock market. And loans are guaranteed by the first position and whatever you’re lending on. Also, just a tidbit of information to say the stock market yields 11% every year. Is misleading sometimes it’s much higher sometimes it’s lower. But when it’s way lower and you have a bad year, you have to make up significantly the next year to get back on track. Can sometimes take years to make up the losses from the down years. Sometimes those numbers can be pretty devastating. And I would much rather control my money than put it in a 401(k) and let someone else manage it. And just take a chance that my tax bracket is too high when it’s time to start taking distributions. To each his own I guess

Leverage cuts both ways. If you get a big return on what you borrowed, you can also get a big loss. Of course you don’t need insurance to get that kind of action

💯 correct you don’t need whole life policy. But the whole life policy allows your money to grow compounding interest while it’s out earning a second return. Like I said to me, that just makes sense making my money work hard for me twice.

If it sounds complicated, there’s a whole lot of risk somewhere that isn’t being shown to you. Get greedy, get broke. Simple as

If you're going to put money in the stock margin while leveraged, why take out a whole life policy and bear the brunt of the premiums when you can just use a brokerage account with margin?

I think you would be ahead if you invested directly. This would avoid ins costs & fees. You would not avoid cap gains on the investments. Where is the benefit?

@@damemethief Margin Loans can be called whole life can't. No one does this for an investment. They do it to help their investments, mainly Real estate or a business they own. It's about control, leverage, liquidity and tax-exempt income. Design is everything on this. They are correct on some of what they say but confused on other aspects. The bottom line is that your capital has to be stored somewhere, either in a bank or this, which is a better alternative to a bank.

That’s term.

It's usually so much more expensive, though you get the premiums back the missed opportunity of investing those additional funds is worth more than the insurance (how they make money).

That’s why you only buy dividend paying whole life with the top financially strong mutual (client owned) companies.

Similar to the FDIC coverage on bank accounts (but NOT the FDIC). If an insurance company fails, the State Guaranty Association and Guaranty Fund will usually step in. The association will: - Transfer the insurer's policies to another insurance company - Continue providing coverage for policyholders - Help pay outstanding claims from other companies in the guaranty association Every state has a nonprofit guaranty organization that each insurance company operating in that state must join. Regardless, working with at least an investor-grade level company is still a good idea. I typically prefer A-rated.

Yes, the same is true for annuities.

They're a lot healthier than banks, that's for sure. 😂

It depends largely on the the plan and your financial situation. If you have a particularly good whole life plan (which is still probably a fairly mediocre investment at best) which is past the breakeven point and you already have a solid, well funded investment portfolio, it might be worth keeping as a conservative asset. However, if all three of the above are not true, I'd cash it out without hesitation. Stop paying those extremely high premiums to an insurance company, and instead invest them and the cash out value in something that will actually perform long-term. You'll have to swallow it as a net loss, but continuing with a bad investment just digs the hole deeper.

@Alan-jk1yi That makes sense, and I do already have a well funded portfolio. The only thing really that's making me lean towards keeping it is that it is a conservative side of my porfolio (and I'm aware it's a bad one). I think I'll probably run the numbers and see if it's worth canceling, thanks for the input!

@@Juliozev96who is your whole life with? If it’s a top dividend paying mutual company like Guardian or NYLIFE, it can be a bond alternative. Also google Ernst & Young’s study on having life insurance in retirement. You will see that having whole life provides for more retirement income and legacy.

How much of the premium payment is going to the base vs. The PUA? Does your policy even have a PUA? How much cash value do you currently have?

@multimeter2859 the monthly payment is $308, where $50 of it is going to PUA. My cash value rn is 10.5k, and I'm finishing up year 4 right now. The pay period is 10 years. Not sure if I should just get out now, or wait for at least the money to break even to what I put it (still bad because I could've invested it but oh well)

Giving away your money with only an option to borrow is beyond stupid

You don't get taxes in retirement with a Roth IRA.

It’s paid for with after tax money and if done properly (not hard to do), any money gained or taken out or left when the person dies, is tax free.

Not much taxes taken out when your basis is nearly 100% of your account. Insurance masquerading as investment vehicles is the way they scam the middle class into being middle class their entire lives

Bo misspoke - according to the chart shown, the amounts he gave are both annual costs (annual cost for term life and annual cost for whole life).

He misspoke, but the chart was in annual rates.

Six months later 455k, they are flying.

The interest you pay in Infinite Bullshit to borrow against your money goes to the LI company. So, let's break this down in details: You pay an insurance company 6 to 8% interest to BORROW against your own money only for them to keep your balance (cash value) when you die. You really think that is a good idea?

It’s not hard to keep a policy from MECing.

@@firecraig Even at 40/60 it takes about 8 years to break even according to your boyfriend Chris.

@@astroman30 clueless aren’t you? Who cares how long it takes if lifetime it’s a better return than a savings account or bonds. 🤦‍♂️

​@firecraig most of those selling these products do not include the "break even" Calc as part of the comparison. They simply compare return rates as if there was no commission. This is simply lying and unethical sales tactics. 8 years is a long time to be locked into a loss. With inflation now being a forward permanant concern, lifetime products that are locked in with conservative returns will be terrible options for everyone. There are better tax reduction strategies.

@@DriveByReviews you realize the cumulative internal rate of return on a dividend paying whole life is exactly what it is? It’s not that minus a commission. I’ll gladly take a tax free vehicle that gets lifetime 4-5% and has a higher death benefit than the cash value. To match it you need a term that never ends and a savings account getting 6-7%. Let me know when you find either. Dividend paying whole has beat savings accounts, money market accounts, and even bonds the last forty years. For a safe place to grow savings ,not investing, I don’t know of a better place. Feel free to share if you do.

I don't think you could get either.

Didn’t know there was such an animal. Would the interest continue to compound if you borrowed from an ETF, or would it start back from zero? Not sure if that made sense?

Bullshit.....Have you not seen the S&P and what it's done in the last 4 years?

​@@astroman30the 3.7 percent is tax free..

@@Rshen11 In a $500G DB example, the premium is $430 a month from age 40. Nick lives to age of 90. So with whole life insurance, Nick pays $430 a month for 600 months (50 years) total $258G. Dividend is $130 a year best case for 50 years on the premium paid, or $6500, for a cash value of $264,500. The alternative is to buy term life insurance with extended duration and invest the rest .. a $500G death benefit policy for a 30 year term would be about $60 a month leaving $370 available to save .. $370 monthly in the market at 7% (stock market lifetime average) in a tax deferred account gives me $432G after 30 years. I won’t need a $500G policy if I’ve got $432G cash in my account, so I cancel it, And for the next 20 years my account keeps growing at the full $430 a month. when I’m 90 the account is worth $1.9 million. Conclusion is clear .:. Do I want $264.5G (whole) or do I want $1.9 M (term and invest) for the same premium output .. I choose term and invest!

It's not realistic. Nearly everything they say is factually wrong.

​@@maxpruger837 You should explain why, then. They made their argument. Now make yours.

@@Kalvain14 I did in a separate post. But it's not even an argument. Their basic facts are wrong. For example, there are no surrender charges on a whole life policy. Direct recognition doesn't mean you don't get a dividend on borrowed funds. The video is called "Infinite Banking Exposed" and they spent 95% of the time talking about a whole life policy. Infinite Banking is about taking over the banking function in your life, the whole life policy is simply the best vehicle to do it with. It's like calling the Superbowl and all you do is spend 95% of the time talking about the stadium and parking lot while ignoring the actual game being played. PS. I'm not an agent and I don't sell insurance, but I understand how this work and these guys have zero clue.

Thank you. I see how they are missing a bunch of details now. The comments here are painting a better picture. 👍

Yup their big rebuttal (I worked at one of them) is “well yes buy the term and invest the difference but most people don’t invest the difference, this gives you discipline”.

So basically this plan is for people who are shitty with their money. Check.@@ludwigvonsowell5347

There is very little educational value in this video, it's almost 100% factually inaccurate.

@@maxpruger837 tell me more about “it just has to be structured properly”.

@@maxpruger837 lmao, tell me you own whole-life without telling me…

There really aren't a ton though. you get a step up in basis in inheritance and inheritence taxes only step in after 11 million.

Taxation is a really bad reason to buy whole life instead of investing in a diversified portfolio. If it's estate tax you're worried about, either life insurance or a brokerage account would need to be placed in an irrevocable trust in order to avoid estate tax. If it's tax drag on investments that you're worried about, buy index funds and hold them long term - your cost basis is tax free just like your policy contributions would be.

Stock market money in a Roth IRA is tax-free. And if you put it in an irrevocable trust, there are no estate taxes.

@@me-myself-i787 yes, but then you also have to put it.... In an irrevocable trust, which makes it very hard to use in your current lifetime. Depending on the trusts of course. Also, that's a nice problem to have more than 11 million.

My clients have access to cash value after their very first payment. Might need to do a little more homework before commenting. 😀

You would need a personalized illustration to see how much you would have year after year. The reason they can't show you in a tiktok is because there's too much variety in how the policy can be set up, specifically with how your premium is split between base vs. PUA. They also can't show you how much they keep in commission because that also varies depending on how much is in the base. Regardless, a policy set up to execute infinite banking lowers the commission to an agent anyway, since setting it up the Nelson Nash way requires 60% of the premium going to the PUA.

You take it!!!

What's the fee structure on the policy look like? That's the first question I'd always ask. If they can't answer it, suggest they find a way to provide 401Ks because they're obligated by law to provide the best available retirement options when they offer retirement options. Chances are, they're getting something in the way of incentives by offering the "whole life as retirement" option. To sum up; ask about fees, and talk to a fiduciary advisor if you need further advice.

@@CapitalWorksPro not familiar with whole life are ya? There is no fee structure on whole life. Based on age/sex/ health rating, that’s how the company determines the particular cost of life insurance.

Take it while it's available, as a 100% match is silly to turn down, but advocate for updating the 401k so that highly compensated employees can contribute. Modern, properly set up 401ks usually bypass nondiscrimination testing, which is what can potentially kick out highly compensated employees.

What does a 100% match into a whole life policy even mean? I would read the terms very carefully. If they are adding cash value and you can withdraw that cash value as soon as you leave, that could be a good deal. Why on earth doesn't your employer just use a "safe harbor" 401k plan though?

Ramsey is correct. You don't get both. The cash value is essentially just early access to the death benefit, so anything you pull from the cash value, including any interest paid, is deducted from the death benefit if you don't pay it back. The death benefit may increase with some policies, but you conveniently left out that you have to pay extra for that. And by "over time", you mean as you approach age 100. That's when the cash value converges on the death benefit value for most policies. And I'll remind you that the average US lifespan is currently 77.

Yet, the opportunity cost you gave up by not investing the money instead of buying a trash value policy is enormous. I'll give you an example: In a $500G DB example, the premium is $430 a month from age 40. Nick lives to age of 90. So with whole life insurance, Nick pays $430 a month for 600 months (50 years) total $258G. Dividend is $130 a year best case for 50 years on the premium paid, or $6500, for a cash value of $264,500. The alternative is to buy term life insurance with extended duration and invest the rest .. a $500G death benefit policy for a 30 year term would be about $60 a month leaving $370 available to save .. $370 monthly in the market at 7% (stock market lifetime average) in a tax deferred account gives me $432G after 30 years. I won’t need a $500G policy if I’ve got $432G cash in my account, so I cancel it, And for the next 20 years my account keeps growing at the full $430 a month. when I’m 90 the account is worth $1.9 million. Conclusion is clear .:. Do I want $264.5G (whole) or do I want $1.9 M (term and invest) for the same premium output .. I choose term and invest!

Not if you follow the rules which are easy to do.

60/40 will allow you not to hit a MEC. The problem is that it takes about 8 to 10 years just to break even. Not to mention, you have to dump A LOT of money in your PUA (at least $1600/monthly according to Chris Naugle) just build-up your CV. You miss a base premium, you will be up shit creek, because your "dividends" haven't kicked in to cover your premiums. You'll have hard luck try finding an agent/carrier who will set this up. There are some good turds in the toilet, NWM and Lafayette come to mind who set 10/90s and 40/60s. Their dividend rates are a little higher than others. The problem is that IBC is designed for suckers.

@@astroman30hahaha!!!! You think NWM’s dividends are higher???? Hahaha.

You put your capital into the whole life policy and then deploy the capital into other assets. The suboptimal play for capital is keeping your money in the hands of others and hoping for the best.

@@InsuranceandEstatesnope, the suboptimal play is reducing your capital inefficiently with fees and charges associated with said policies. Whole life is useful only in a very small subset of life situations that most will not encounter.

Infinite banking is a process, not a product. Whole life is the product used to implement the process.

@@multimeter2859yes of course…. Yet another niche product that people were getting wise to so they had to start selling “infinite banking” as well as Index Universal Life that is so great…

Try 4-5%

@@firecraig lots of variables there. Potentially yes. It depends on the product. Either way, if its only 1.5% its a poor product for cash value and likely geared more towards death benefit or just a junk policy.

Now watch one of the response videos, because these guys are wrong.

@@multimeter2859 no thanks. They're not wrong and judging by your comment, you have an interest in selling this crap.

"Warehouse wealth?" Pay an insurance company interest to BORROW against your own money, and you think this is a good idea?

@@astroman30 You finance everything you buy directly or indirectly. Richard Cantillon. He also showed that money is not wealth. Far to many people don't understand the underlying economics of their financial actions. Much less risking the little bit of liquidity and access to capital they have. It is better to be in control of access to capital at all times and nit have it leveraged to unpredicatble markets.

One of many errors / mistakes they made in the video.

even with a 30% haircut, the Equities beats the "guaranteed" income. IRA/401k assets would beat the insurance policy out of the water. Also, tax situations are very different person to person, hence why WL makes sense if you are running up against the federal estate tax

@@General8675 - agree overall, but why can’t they be completely transparent and say something like “8% return in equities should be adjusted for tax because the insurance returns are after tax”. This would be more honest. Also, equities are more risky product than insurance product and so that is also need to be taken into consideration when comparing

I could be wrong, but I took it as they were comparing it to money in Roth IRAs and Roth 401ks. Again, I could be wrong but that’s just how I took it.

@@General8675 Why would you compare this to equities? Can you lose money? Whole life is the vehicle, not the investment. Understand that when you are leveraging cash value to invest in real estate, you are putting your money to work in two places at one time. And because your money is working in two places at one time, you are earning a higher combined rate of return.

What‘s the point of borrowing your own money to buy assets instead of buying the assets directly? Regardless of instrument (401k or insurance) I don’t see the advantage

@@chemquests Thanks for the question. In a simple answer, you are borrowing against your money, not borrowing your own money. Since it is not your actual money, your money in your policy is still going to work for you. Your death benefit is the ultimate collateral because if you never pay back the loan that is where it comes out of. The key is you run your money through a whole life policy that offers several benefits such as tax favored vehicle, tax free death benefit, guaranteed cash value growth, creditor protection, terminal illness and chronic illness riders, etc. Your financial foundation is built on a contractually guaranteed asset with tax incentives and creditor protection. You can then use your money in the policy as collateral to purchase other assets, or opportunities, as they arise. But as you purchase the asset you are also still earning a compound interest return on your entire cash value balance. So you make money in your policy and you buy a new asset simultaneously. Or you can simply wait to buy assets until you see an opportunity but know you are earning around a 5% return on your money so you do not feel the need to take unnecessary risks.

@@InsuranceandEstates From a book keeping perspective, it may not be technically correct to refer to is as "borrowing your own money" since they technically come out of different pots, but from a practical perspective, "borrowing your own money" is exactly what's happening. What you're leaving out is that you have to pay interest on the loan, which is often times higher than the dividend rate the collateralized amount is making the in the policy. While from a book keeping perspective, it is technically correct to say that the cash continues to grow while you borrow against it, when you factor in the interest you have to pay on the loan and actually take everything into account, the net result is either break even or a loss, depending on the interest rate. That's kind of like having $50 in each pocket, spending $20 from your right pocket, then putting the change in your left pocket and pointing to how well your left pocket is doing. It's deliberately obscuring the overall picture, which is what truly matters.

@@Alan-jk1yi The loan interest is not "often times higher than the dividend rate". They are practically a wash over the life of the policy, even a net positive spread in favor of dividend growth because while loan interest is based strictly on interest rate environment, the dividend rate gets supplemented by institutional business profits that have nothing to do with interest rates.

@@linnyh8242 A reasonably easy Google search says otherwise. The average dividend rates for different companies is easy to find, and it varies between 5-6%. According to MarketWatch, the average loan interest rate for whole life policies varies between 5-8%. There is no way to reach those averages without the loan interest rate often being higher than the dividend rate. And please note, this is me being MAXIMALLY generous to the whole life plan. This does not factor in commissions, management fees, surrender fees, or any other fees that are built into whole life plans, as well as various other factors which work against the net performance of the plan. Insurance companies deliberately hide those to make it hard to get a good idea of what the true net performance of the plan is, which on it's own is a huge red flag.

At My bank, I did not need a salesman to sell me my account. At My bank, where I "store" my cash, does not charge any commissions. At My bank, I "break even" on day ONE. At My bank, they have no fees to sap the effective interest rate, currently 4.25% (2023). At My bank, if I want some of my money I just request it and they give it to me. No borrowing/fees/interest. At my bank, if I want to close my account, they give me 100% of my funds. (No surrender fee.) At my bank, I earn taxable interest. That is because I OWN my account and it experiences real growth of money that I can readily spend. At my bank, I will always have taxable interest income because I am able to pull out MORE than I put in. At my bank, if I want a loan, I don't have to self fund it first or wait (at least) 10 years to build up a cash value. At my bank, all loans are ”tax free.” At my bank, if I take out a loan, the maximum amount is not tied to some percentage of my savings account. At my bank, if I get a loan, my savings continue to earn interest unaffected by the loan. (WOW! Just like an "infinite bank.") At my bank, if I die, the bank does not keep the funds in my account.

@@astroman30so ignorant.

@@firecraig At My bank, I did not need a salesman to sell me my account. At My bank, where I "store" my cash, does not charge any commissions. At My bank, I "break even" on day ONE. At My bank, they have no fees to sap the effective interest rate, currently 4.25% (2024). At My bank, if I want some of my money, I just request it and they give it to me. No borrowing/fees/interest. At my bank, if I want to close my account, they give me 100% of my funds. (No surrender fee.) At my bank, I earn taxable interest. That is because I OWN my account and it experiences real growth of money that I can readily spend. At my bank, I will always have taxable interest income because I am able to pull out MORE than I put in. At my bank, if I want a loan, I don't have to self fund it first or wait (at least) 10 years to build up a cash value. At my bank, all loans are ”tax free.” At my bank, if I take out a loan, the maximum amount is not tied to some percentage of my savings account. At my bank, if I get a loan, my savings continue to earn interest unaffected by the loan. (WOW! Just like an "infinite bank.") At my bank, if I die, the bank does not keep the funds in my account.

@@astroman30just because you repeat it doesn’t make you any less ignorant. Yours is taxed, mine is not. You have to qualify for your loan and pay it back on their terms, mine is not. I’ll take my 5% tax free and less spent on term insurance over your plan and day.

@@firecraig Nimrod, you’re not taxed because YOU DON’T OWN IT!! Any loan is “tax free.” I can borrow against my credit card “tax free.” I can borrow against my home “tax free.” Only stupid people and low life salesmen push trash value insurance. Which one are you?

You can see examples like this in Nelson Nash's book, Becoming Your Own Banker.

you could probably split it between bonds and mutual funds - putting it all into equities is reckless and all into bonds will not yield enough to matter… CDs could also be an option

Brokerage accounts-Index fund that tracks the sp 500, that’s what they have said before

Not sure how long this will last but high yield savings is giving 4.6% which is pretty safe.

CD’s. Safe, prevents you from taking it out on a whim, and will (probably) beat inflation.

Money market at 5.35% vusxx

So then it shouldn't be advertised to %99.999 of people, most are not looking to keep that much cash lying around.

@@General8675 I think the amount of cash to have is entirely personal and situation specific, but my belief is most people do not hold enough safe cash. With that said, if holding cash (whatever the amount) is not in line with your financial values, then whole life wouldn’t be for you.

I do agree, the risks are not the same. I kind of understand the reason for comparing to an equity as the Tiktok videos are about replacing the 401k. In my opinion, those Tiktok videos are for entertainment only, it is a waste of time answering to those. A more reasonable approach would be comparing a whole life policy vs replacing the fix income part of portfolio and term life insurance. Those would compare low risk assets.

Either way, with a direct investment you can unwind your position easily. Getting your money tied up in an insurance reduces liquidity.

@@chemquests It's very liquid; you can take loans for the first month with most carriers; that being said, this isn't a short-term play. There are no surrender charges like they claim they didn't realize it they were referring to a IUL

@@samsciascia4004 a loan is not liquidity. Paying interest to borrow your own money proves you don’t own it. You handed it off to someone else who gets to dictate your access. Sorry but this is stupid (not calling you that but the arrangement)

@@chemquests You do not borrow your own money. The insurance company is loaning you THEIR money from the general account fund and your cash value is the collateral securing the loan. Your cash value earns whatever it earns, PLUS the spread between your, let's say, Real Estate investment return and your cost of money. This results in a higher return than you would have made by investing your own cash directly. This is used mainly in the Real Estate market. Does it always make sense to borrow from it? Sometimes it does and sometimes it doesn't. Keep in mind in life, you are always either paying interest or giving up interest.

😂😂😂😂

Cost of insurance.........There that's the whole list.

@@joshurrutia6080 yep. That’s figured at underwriting and never changes.

Dude, I had a little respect for you because you didn't trash people. Now, you come on here and bash these guys? FU. Doing a 60/40 while dumping $1600 monthly into a PUA is beyond stupid. I'd rather do a 10/90 and take my chances not hitting a MEC. Yet, either scenario is stupid. Hardly ANYONE can pay ($1600) that kind of premium/PUA. It takes about 8 to 10 years JUST TO BREAK EVEN. Let's not forget, you miss a base premium, you're up shit creek and better pray they don't cancel your ass. Your "dividends" (refunds from uploaded fees) won't cover the premium because you just started. Right now, NWM and Lafayette are two of the better turds in the toilet with their dividends. I'm not sure whom your carrier is pushing this garbage. But, paying an insurance company 6% to 8% interest to BORROW against your own money is beyond stupid. Let's not forget the fact that when you die, THE INSURANCE COMPANY KEEPS YOUR CV. By all means, come at me. I'm TOTALLY going to focus on you and tear apart your bullshit scam. Get ready.

I would love to see that.

@@sirmc7049 I am happy to email you the mathmatics. I can show it any way you like but to start we have been working on a side by side comparison showing exact senarios of Buy term invest the diff vs. Create a specially designed whole life (Not the one your specialist did that was terrible) then using the infinite banking concept and loans against the policies cash value to invest in the exact same thing as he BT. invest the diff senario. Apple for apple comparison. However, I can show it any way you would like as long as its apples for apples.

Just checked your channel and there is no video yet. You still working on that? Or is it possible that 2 professional financial advisors ( a cpa and an ex-insurance salesman) working with a real policy that came from an insurance salesman know more about how this actually works then some guy on youtube leaving a comment?

VULs, IULs, UL,s are all garbage....worse than whole life

Good thing infinite banking is a process and not a product.

Why isn’t just investing the proper comparison? It’s the simplest thing you can do with your money to earn a return. I don’t understand why you would bother borrowing your own money to invest instead of just investing directly.

@@chemquestsoh my. Google the word “collateral”. Policy loans are NOT borrowing your own money. 🤦‍♂️It’s a loan from the company using your cash value as collateral so that all your cash value can continue to grow. Next thing you will say is the evil life insurance company keeps all your cash when you die. 🤦‍♂️

@@chemquests Comparing that way misses the main reasons to use the strategy which is to use the loan off the policy to invest to increase returns. Rightfully you'd say well isn't that just leveraged investing? It is but the most secure way to do it. You're able to leverage 90% of the value which you can't do with other assets since it's secured by the policy. Second you don't have to go through a long application process, you just write to the insurance company and they send you the money. The loan would have at least a 1% higher interest but you get the flexibility of paying as much as you want, just interest, skipping payments or paying it out anytime. You can go to a bank if you want and get a better rate but that involves a longer application and a less flexible terms. Then the power of the strategy is your cash value is compounding uninterrupted while you use the loans to invest in compounding assets while you pay simple interest. Sorry there's a lot there and I'm not a pro by any stretch. I would just encourage people to also watch the videos on it and not discount the strategy outright because of this video. I also decided to try it because it can easily be cancelled, found a policy without any withdrawal fees after a year.

@@user-he2eq5hj1e leveraged investing is inherently a bad idea. It magnifies upside and downside. It sounds like using a low risk vehicle to enable taking higher risks.

​@@user-he2eq5hj1e How did you set your policy up? How much is going to the PUA?

Based on this video these guys couldn't even spell IBC.

Isn’t the T80 a term policy???

I make 50ish grand a year and it works awesome for me.

What part of the concept of IBC do you not like?

I don’t think it’s deceptive. They’re responding to videos that misrepresent this as a strategy appropriate to most people, so they take the example of what most people could do.

@@chemquests not true. It’s a simple math concept. Doesn’t require lots of money.

Pay an insurance company 8% interest to BORROW against your own money, and you think this is a good idea?

@@astroman30most IUL products these days loan rate is 2%…

@@MsSunshinelivia Why IULs are garbage (from an actual fiduciary :) 1. Money never enters the market - With an IUL, the money funding the cash value portion of the policy is never actually invested into the market. Instead, the insurer holds your “cash” and pays a return on the annual growth of a specific index. Anyone selling IUL are not required to have a securities lIC. 2. Growth potential is capped - While most policies have a “floor” of 0% which prevents your cash value from dipping below what you put into it, your growth potential is capped, too. For example, if your policy limits growth to 10% on the index and that index out-performs that percentage, you’ll still only receive the value of 10% in your account. The insurer keeps the difference. 3. No dividends - Dividends are completely eliminated in an IUL policy. Not having the chance to reinvest any earned dividends, as you could choose to do with an individual investment, means you could miss out on a great deal of money from dollar-cost averaging over time. 4. Fees, fees and more fees - IUL policies are packed with fees and charges that will eat into any cash value accrued. 5. Rising costs - The internal cost of insurance continues to rise as you age, which can limit the amount of money going toward any potential cash value. All universal life is A.R.T ( annual renewable term) PLUS: Almost all cash value policies have these “features” built in. • You’ll accumulate NOTHING in cash value for the first few years the policy is in force. • The cash value earns a lower rate of return (often just 2%-4%) than the potential return you could achieve if you put your money into a vehicle such as a Roth IRA in the U.S. • If you borrow from the cash value, you’ll pay it back plus interest. • If you die with the policy in force, beneficiaries receive the death benefit (less any outstanding cash value loan balance) while the insurer keeps any accrued cash value. Unless you have the increasing death benefit option (option b) the consumer will pay more for that option. The consumer always gets screwed when investing in these policies. The only winners are the agent and the company. The BS I hear all the time is it has to be "structured properly." I have collected 64 policies in the last year and I haven't I seen one structured properly.

No surprise. These guys confuse universal life with whole life. Don’t have any idea about IBC. IBC is a math concept that’s easily provable. Happy to answer any questions you have.

@@firecraigSure, I have a question: What happens to the cash value when the person dies?

@@astroman30 I have a question. What happens to your equity when you sell your house? Does the evil mortgage company keep it? No? Same concept. Whole life is an asset. Cash value in whole life is just the portion of that death benefit you have access to while alive. So clearly your question about what happens to the cash value when you die, makes no sense.

@@firecraig yet, you didn’t answer my question.

@@astroman30 it’s paid to the beneficiary. It’s a pretty simple concept. Problem is you think the death benefit is separate of the cash value. Nope. Not in whole life.

They are telling half truths and lies.

So please explain how I can receive more in dividends than I paid in premiums 😀

Man that is amazing

@@tyrecarmon20 I couldn’t believe how well it worked either.

@michaelswami I'm going to use my policy to help my oldest niece buy a car BUT she has to agree to pay me back with interest. I'm teaching her responsibility

@@tyrecarmon20 awesome.

It seems like that's just leverage with extra steps...

If you are borrowing to invest in the market, why don't you just borrow against margin or Heloc instead of this convukted crap. You can put lipstick on a pig...

The strategy you just laid out is essentially, give your money to an insurance company, then borrow it back (with significant interest) to invest it. How about instead of that you just... invest the money? The insurance structure can confuse people and obscure what's really going on (that's by design), but that strategy is equivalent to just giving a huge chunk of your investing profits to the insurance company for absolutely no reason. If you want to invest your money, invest it. Don't give it to an insurance company and then borrow it back.

The MGs presented IBC from the policy perspective, not from the IBC use perspective. I think we can all agree that IBC is not obvious. They are Wall St oriented and thus they calculated the Rate of Return - I expect they did that correctly. Two classes of folks seem to like IBC, those that sell it and those that have jumped in. I keep looking for an example that makes sense, but have not found one. If I borrow at 5% and earn 5% then invest at 10% - I make 10%. They pitch that your compounding curve is not interrupted, but it really is. I don't think that's actually leverage: If an investment makes 10% and half is bank money, then my part will be 20%. If the bank is me, then it's not really leveraged.

@@charleslemaire8137 The way this friend has explained it to me differs a bit from what the MGs say here. They way she describes it, her money is fully invested in S&P inside the account and, additionally, she can borrow the full amount against the policy (either interest free or interest paid to herself) and invest that in S&P as well. So touting 2x market gains over time. It's always sounded too good to be true to me. And I'm a big fan of keeping things simple.