This Isn’t Your Grandfather’s Whole Life Insurance Policy

Whole life insurance has a pretty boring and not entirely sterling reputation due to the high cost of some policies as related to being used just for insurance. Term insurance is better for providing pure insurance. But the venerable whole life insurance policy still has a number of uses that make it perfect for investing and saving money.


One such application is using a policy to create what experts call a Personal bank or Infinite Banking System. The policy is cost effective because it does not emphasize the insurance feature. What is more prominent is the way you can build cash value rapidly and safely.


Once you have built up the cash value, you have an investment that you totally control. The most productive way to use these funds would be to lend them to yourself every time you find yourself in a situation that would warrant borrowing money from a third party lender.


By lending to yourself, and paying your “bank” back, you are eliminating all the outside costs related to borrowing…and in fact will be enhancing your whole life insurance policy’s return on your funds. This is really a brilliant way to make sure you are getting maximum efficiency with your money.


If you are wondering why you even need a whole life policy to do this over just saving money for this purpose, it is the tax advantage you will get with this system. When you pay your “bank” bank normally, those earning would be taxed. But as they are in the insurance policy, the insurance company has the ability to pay the gains to you in the form of dividends that get very favorable tax treatment.


A last feature of this system is the safety of your investment. Life insurance companies have special status in regards to who can make claims on the money in a whole life insurance policy. So, even if you found yourself in a lawsuit the money in your personal bank would be safe.


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