Infinite Banking Concept

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Your Family Bank Concept

Your Family Bank Concept

Your Future's Benefits

Your Future's Benefits

Your Financial Planning

Your Financial Planning
The Hidden Secrets about Mutual Life Insurance

 

Your Family Bank

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Infinite Banking - Mutual Whole Life

Infinite Banking Concept

Why Mutual Insurance Companies?

You Own The Bank: Mutual insurance companies are owned by the people who buy the policies. These companies are the modern equivalent of mutual "societies" among European trade guilds of the 1600s. Guild members pooled their money to help each other and their families in times of sickness or death. Because mutual companies have no shareholders, they serve one constituency--the policyholders. Mutuals have no need to report good earnings every three months to justify a stock price, so there is no pressure for them to take on extra risk to make a profit.

Your Premium Payments Belong To You: Unlike traditional term insurance (pure insurance-no cash value), premiums you pay for your mutual whole life policy belong to you in the form of the accumulated "cash value" of your policy. On top of that, the cash value of the accumulated premiums earns interest at a rate set once each year by the mutual company. In 2008, Guardian Life paid a record 7.3% dividend interest, and those earnings are untaxed! That's spectacular compared with last year's 30% decline in the stock markets, bank CDs paying under 2% taxable, savings accounts paying 1/2 of a percent taxable, or money market rates under 1% taxable.

You Can Borrow Based On Your Cash Value: Because your premiums "belong" to you as a policyholder-owner of the company, you can borrow a portion of them back any time you want for any reason you need, regardless of your creditworthiness. The death benefit of the life insurance will be reduced by the amount you borrow if the loan is not paid back, and you will lose the interest you would have earned. But you can choose to pay the interest as you would for any loan, except you are repaying yourself as the owner instead of the stockholders of a bank. As you pay the loan back, the death benefit goes back up.

Mutuals Offer Ironclad Guarantees: Few people realize that the insurance industry, dominated by mutuals, was the one sector that made it through the Great Depression without a disaster and with policyholders financially intact. The cash value and the death benefit are guaranteed and tightly regulated by the states. That means your cash value is there regardless of market conditions, and when you die, your heirs will receive the full face value of the policy. While stockholder-owned insurance companies saw their values fall sharply last year (remember when we taxpayers bailed out AIG?), the top mutually-owned insurers saw their book values remain stable or rise.

Even Banks and Corporations Buy Mutual Policies: One of the lesser-known aspects of mutual insurance is that major corporations and banks buy policies on the lives of their employees and use the cash value to fund employee benefits and as a safe harbor for working capital. By some estimates Fortune 500 companies and large banks have policies covering some 5 million employees. Instead of doing what banks say--put your money in our CDs at low rates so we can turn around and lend your money out at a profit to us--do what banks do.

Mutual Insurance Is One Leg of The Money Stool: Investing should be approached as a three-legged stool. One leg is the money you need to live on in the near future (cash in the bank), one leg is the money you invest for long-term growth (equities), and one leg is the financial bunker you can retreat to when the rest of the world is falling apart and you can't sleep. Mutual whole life got our grandparents through the Great Depression, and it's going to get a lot of people through our current economic calamity.

 

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