A recently launched Mike Dillard product called The Elevation Group has opened thousands of people's eyes to something called Infinite Banking. Infinite Banking is considered by The Elevation Group to be one of the 'black box secrets of the wealthy.' I would agree that the wealthier an individual gets that more life insurance plays a role in their financial picture. I would also agree that the concept of infinite banking is an unknown thing among the general public. So let's shed some light on what The Elevation Group has done.
Infinite Banking (also known as Becoming Your Own Bank, You Be The Bank, Bank On Yourself, Private Banking) is a unique system in which an individual or business uses a very specifically structured whole life insurance policy to create their own private banking system. Now you understand why average people run from this idea, as soon as they hear insurance they are gone. However, taking a closer look at this concept will show that those who ran will be regretting that decision.
As the various names elude to, Infinite Banking is a way to stop paying money to third parties through debt, interest and taxes. It makes sense if you think about all the money the average person pays through interest. It seems as though we've become accustomed to financing everything we buy, from our homes all way down to our blenders. So the amount of money that is essentially slipping through our fingers and going to commercial banks and other financial institutions is outrageously large.
By implementing Infinite Banking one has the ability to use their private banking system to finance their purchases, like cars, boats, furniture, appliances, and the list goes on forever. At the end of the day the person who uses Infinite Banking will come out much better than the person who financed their purchases through a commercial bank. Why is this so? Because the "Infinite Banker" has recouped or recaptured the principle AND the interest that normally would have gone to someone else.
As stated above this is a very uniquely structured life insurance plan, I would not recommend going down to your local agent and asking him/her to set you up with an Infinite Banking plan - chances are they will have no idea what you are talking about.
This is another outcome of The Elevation Group's success, many people are hearing about this concept, liking it, and thinking they can implement it with a traditional whole life insurance policy without the proper riders and structure or maybe even a Variable Universal Life policy, some are trying to use Equity Indexed Universal Life policies. The lack of education will end up hurting these individuals in the long run. There is a very specific type of whole life policy that must be utilized to see the most success and understanding that fact is key to it's implementation.
Final Thoughts:Mike Dillard has done a good thing with The Elevation Group, he has opened up some eyes to one of the most effective tools for creating, maintaining and transferring wealth. However one must be weary of the advisor who helps them set up and implement this system, because, as stated before, most agents and advisors will have no idea what Infinite Banking is. The bottom line is to understand exactly what is happening with your money and that goes with anything in the financial world.
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