by Rick Blaine » Fri Jul 14, 2006 09:38 pm
Does anyone here participate in a Equity Index Universal Life Policy with the idea of building up large Cash Value for borrowing? Usually they are heavily overfunded upfront just below MEC limits or Modified Endowment Contract. It is an interesting idea, you'll usually earn anywhere from 4-6% interest or if you pick a more traditional UL or WL one can anticipate 5% from a good Participating W/L carrier like Guardian Insurance.
Idea is stuff as much money as you can in the first 4-5 years. When you have substantial Cash Value all your borrowing is done outside of the Insurance Contract. Take out say $25,000 out to buy a new car. You pay yourself back with 8% interest, insurance carrier will charge 0-4% depending upon your contract. Yet the interest you pay yourself back with is money earned compared to sending it to a third party bank.
Idea is stuff as much money as you can in the first 4-5 years. When you have substantial Cash Value all your borrowing is done outside of the Insurance Contract. Take out say $25,000 out to buy a new car. You pay yourself back with 8% interest, insurance carrier will charge 0-4% depending upon your contract. Yet the interest you pay yourself back with is money earned compared to sending it to a third party bank.
Posted: Wed Jan 12, 2011 03:10 pm Post Subject: Good Discussion here
many people have eluded to this already, dividend paying whole life is the best choice for infinite banking. As you may or may not know within an IUL or UL you are essentially buying annual renewable term. As you get older that annual term policy will get more and more expensive and start to eat away at your cash value. another issue is that most IULs have a cap, meaning that even if the market explodes and grows by 25% you will only see maybe 12% of that growth. If there is no cap there may be a participation rate which says, for example, you will only get 70% of the gains.
IUL and other universal policies may look appealing up front but to implement infinite banking in the most effective way dividend paying whole life should be used.
Posted: Wed Jan 12, 2011 05:23 pm Post Subject:
Infinite banking? That's what the Congress and the Federal Reserve are doing these days by printing all that phantom money. $1 TRILLION here, another $660 BILLION there.
Just wait for the (inevitable) INFINITE INFLATION to arrive. The next generation of history books will have COLOR photographs of people pushing their money around the U.S., like the people of Germany in the mid-1930s were, in wheelbarrows.
I heard an interesting eye-witness account of the German fiasco a few months ago in a documentary on PBS. Seems that the money had become so worthless that when the person stopped at the bakery with their wheelbarrow-full of money to buy a loaf of bread, that when they came out of the bakery, having left the wheelbarrow unattended, they discovered the money sitting in a pile on the sidewalk and the wheelbarrow missing -- because the wheelbarrow had value!
Here's the next big stock play: invest -- heavily -- in wheelbarrow manufacturers.
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