What is Bank On Yourself ® and The Infinite Banking Concept ®?
The Infinite Banking Concept was born from a best selling book, Becoming Your Own Banker, written by Nelson Nash in the 1980’s describing how to use properly structured whole life insurance contracts to self-finance major purchases and business capital expenses while simultaneously creating life long wealth. A colleague of Nelson Nash, Pamela Yellen, authored the New York Times best selling books, Bank On Yourself, in 2008 and The Bank On Yourself Revolution in 2014. Yellen’s books expand on and affirm Nash’s ideas and provide many anecdotal examples and testimonials of real Bank On Yourself plans in action. Nash created the Infinite Banking Institute to train advisors and Yellen created the Bank On Yourself Authorized Advisor program.
Enter Bank On Yourself Plans
The Bank On Yourself method relies on a specially designed, little-known type of dividend-paying whole life insurance policy with ‘specific riders’ added to it that grow your cash value significantly faster than a traditionally-designed policy. These policies have increased in value by guaranteed and predictable amounts every single year for more than 160 years.
- You don’t have the risk of loss due to market fluctuations
- You can make your cash value do double duty. Take a policy loan to pay each year’s tuition or any major purchase, and your policy continues to grow just as if you never touched a dime of it—if it’s from the right company
- As you pay back your loan, you’re recapturing the money into your policy, to set yourself up for a comfortable retirement—or anything else you want!
- And the interest you pay on your loans benefits you
What is Whole Life Insurance?
Whole life insurance is a private contract between an insurance company and a policy owner, insuring the life of an insured person (often the policy owner) for their entire lifetime or very old age (usually 121 years old). As the policy owner pays periodic premiums, the whole life insurance contract accumulates cash values. In 1950 fully 1/3 of American families owned whole life insurance. “Insurance is the most formidable mechanism we have to save as a society and the economics of insurance has not been given proper weight by economists in how they look at the world.” – Former FED Chairman, Alan Greenspan
What does ‘properly structured’ Whole Life Insurance mean?
The whole life insurance contracts used for the Infinite Banking and Bank On Yourself concepts are basic whole life insurance policies optimized for maximum cash accumulation by being structured with specific riders, funded in specific ratios and issued by specific types of insurance companies that offer some specific features.
Can my own insurance agent or financial planner sell me the type of whole life policy you talk about?
Maybe, but not likely. The Whole Life Insurance contracts we work with must be structured correctly, funded correctly and issued by companies that offer the right features. Unless your agent or planner has had the specific training required, it is likely you would end up with an incorrectly structured policy that will not deliver the results you expect and leave you disappointed – or angry.
What are these ‘special riders?’
Paid Up Additions Riders are one of the special riders a Whole Life policy must be structured with to function properly. These riders “turbo charge” the cash accumulation in the policy so that they accumulate cash value up to 40X faster than a whole life policy without them.
Isn’t this too good to be true?
While I wholeheartedly recommend healthy skepticism, caution and prudent due diligence, I have never really understood what this statement means. At one time almost every thing in our world would have been considered too good to be true. Automobiles, aircraft, phones, TV’s, etc. etc. Something I always remind my clients about: It’s not magic, it’s just math…