How Does the Loan Process Work with the Infinite Banking Concept?
We’re often asked how the loan process works in the Infinite Banking Concept. Here’s how: When you pay the premiums into a properly structured, dividend paying, whole life insurance policy, you’re building up the cash value that you can borrow whenever you need it.
So, when you take out a loan, the cash value of the policy becomes the collateral for the loan. You’re free to take a loan for anything you choose – there are no questions asked – it can be for emergencies, a college education or even to fund your retirement.
You will be required to pay interest on the loan, into your policy, but usually at competitive rates. If you don’t pay the annual interest due, your insurance company will add the interest to your loan balance. If you don’t pay your loans back, they’ll be deducted from the death benefit before the company pays out any claim to your beneficiaries.
To learn more about how to build your own banking system, give us a call or visit our website today.
Donald G Turnbull
Financial Advisor, Certified Cash Flow Specialist, Whole Life Insurance