Is The Infinite Banking Concept Fiction Or Fact?
This is an actual case study of someone who put the Infinite Banking Concept into practice as described by R. Nelson Nash in his book Becoming Your Own Banker.
A male that is 45 years of age
An annual premium consisting of $30,000 being paid into a dividend paying whole life insurance policy with a face value consisting of $567,000
In two weeks he took a $12,000 loan from his policy out of the $22,000 of available cash values.
With this $12,000 he paid a tax bill he owed. Then he set up a repayment schedule to repay his policy loan.
Paying $390 per month, for 36 months, he accumulated $14,040 plus the $10,000 of original cash value left over from the first policy loan.
After a 3 year period, he has paid two more premiums of $30,000.
After he paid the second premium, $24,000 was added to his cash values.
After paying his third premium of $30,000 the cash values increased by $34,500.
At this point, he had $82,540 of cash value and over $801,000 of face value. Because he had only paid $90,000 in premiums up to this point, his comparative cost has only been $208 per month or a total of $7,460.
So let us compare this to a term policy with $800,000 of face value. For this kind of face value he would have paid $323 every month for a total of $11,628 over this period of time.
Things are even better than they appear in this case, for he withdrew the cash values of $10,000 which was left over after the first policy loan and put it to work too.
That $10,000 added to $20,000 which he had on hand, he used to purchase a car. The monthly amortization schedule, for the car, outlined payments of $667.33 per month for 36 months. Therefore after the 36 month period outlined above, this man at age 48, has the $82,540 plus an additional $24,042 in cash values, added together that makes $106,564 this registers as $16,564 more than he has expended in premiums!
Summary:
This man has $16,564 more than he paid in premiums. This is money he would not have had if he had not followed The Infinite Banking Concept.
He also has $801,000 of death benefit through his life insurance policy with technically no expense.
On top of all that he has paid off a $12,000 tax bill and owns a $30,000 automobile.
In two more years, he will have an additional $16,016 by maintaining the loan repayment schedule established on the automobile.
By practicing The Infinite Banking Concept his death benefit (face value) is now $812,424.
He did all this merely by putting the banking equation under his control. He recovered what the financial institutions and bankers would have made off of him. All this he now owns tax free.
After reviewing this case study, it is quite evident that “The return of your money is more important than the rate of return on your money.”
The Infinite Banking Concept is indeed fact and not fiction.