Insurance Companies Are Lying to You (Infinite Banking Exposed!)

We believe that insurance plays an important role in managing risk and protecting you and your family from unforeseen events. However, we also believe that some salespeople take advantage of the unsuspecting public through difficult to comprehend policies that aren’t always in the best interest of the consumer. One of the more popular concepts is called “infinite banking” or “bank on yourself.” Is infinite banking a good investment?

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[emoney]

My biggest thing was always "where do the returns on these life insurance policies come from?" If it's from other people's life insurance premiums, then everyone is overpaying on the premiums. If it's in the stock market, then I should just invest in the stock market.

[lindawer]

Best advice is always “if you can’t explain why you are doing something with your money you shouldn’t do it. Circumstances change and you need to know when you need to evaluate and possibly shift strategy.

[BlakeLeasure]

Your subtle sarcasm kept me interested in a 30 minute insurance video. Cheers to you 😂

[lisandrasaumeldiaz]

My life has been so much richer and easier since 2018 when I discovered these two mentors who don't even know me, but I am grateful to listen to their wisdom every fricking day. Thank you guys.

[carlgarrett]

One thing people should remember about term life insurance is that it is possible to get a term policy that continues after the initial 10 or 20 year period. The premium just goes up (it goes up a lot compared to the original premium but still tons less than a whole life premium).

[A_Schimizzi]

You guys are the real MVPs! This was one financial topic I heard a ton about and didn't understand it at all. Definitely sharing with friends and family.

"If you can't simply explain it, you simply don't understand it"

[stukatz]

Very helpfull thanks! We at 32, bought a Whole Life 15 years ago. Can you do a followup video on how to maximize the value of this "boat anchor" in retirement assuming our kids don't need the life insurance?

[squeakers]

Thanks for covering this. I do have one of these products for my husband (I didn't qualify) and I will say the reasons why we signed on. Once you build up enough on the cash side you could presumably stop paying in and just let the cash cover the premiums so to me it makes sure we have life insurance for good. I am the majority earner and the one who handles the finances so it gives me peace of mind that if I were to pass away suddenly our child would still have their remaining parent covered by life insurance even if he missed a payment while figuring things out. In addition ours covers long term care which lets us opt out of the long term care tax in our state (that benefit alone covers about 10% of the cost). That being said I don't think of it as a bank account or investment, I think of it as insurance. This also only accounts for a small amount of our savings in a year which I think is fine when I consider the overall risk profile of our other investments. So hope that gives you some insight into why folks buy these.

[Isaacleeyeahthatsme]

“Infinite Banking Isaac” 😂 I’m unhinged. I would never! Term only!

[andrew_gencoupe]

What I got is this is an incentive for investors who want to borrow capital on their existing capital to be able to invest more now, in the future market I’d love to see another more in depth video to learn about it, I’m probably going to rewatch this too and research more anyway 😂

[kyliecallaway]

We fell into something like this in our early twenties and we were not able to pull any of our money out! Just glad we weren’t in it long!

[EvenOlderThanBrian]

Would it be possible to flash up a picture of Justin Wilson (the Cajun cook) every time Brian says “gar-on-tee”?

[dolevmazker]

Coming from an economist and and getting registered as a financial advisor, this has been a topic I never learned.
Btw im not from the US and i dont have this kind of insurance policy in my Country.

[michellegillingham]

@themoneyguyshow ….Curious to know what the numbers would look like if you took it a step further & used non direct recognition loans from an infinite banking policy to buy index funds? IB proponents/influencers would highlight that you would then be getting growth in the stock market & on policy dividends….too good to be true???

[tlzangl]

What about the total cost of the term life insurance policy?

[Mandyfin]

How about when you have a term life converted to whole life at a lower cost ?

[whyclick_tv]

So are you saying the cash value doesn’t get the compound interest it’s just the dividend?

[Eastonjames]

What are your thoughts on converting Term to permanent at the end of the term to avoid estate taxes down the road? I understand this only applies to high net worth individuals.

Most life insurance companies allow you to convert your term policy to permanent with no additional underwriting.

Does it make sense to take risk in the market while you are young and buy term…then convert to permanent and get a lower guaranteed return once you are in your 50’s/60’s and have a lower risk tolerance?

[lhpeterparker]

Another point is that as Manny is approaching 65 he will move his money to a less risky investment with a lower rate of return so you should use maybe 5% for the last 5 years. Of course that doesn't have to be the full amount exposed to the lower risk he could have a lower risk bucket and a higher risk bucket.

[anthonyb]

Does it ever make sense to just have some small amounts in this as a way to help for diversity of your capital. I Still have blended term insurance. I would only use the loan portion if stock market is down during early retirement years. Also, I believe there are tax benefits for generational estate planning. I am still maxing retirement 25% savings. My agent pushed this as a risk off part of my overall portfolio. I still want term since my WL policy is low 250k. I am hesitant to have a high benefit policy but like the flexibility and discipline of a set long term savings vehicle since finance is mainly behavioral. Obviously it would be better to invest in the s and p in a taxable account that is easily accessible. I feel that most would fail at not spending taxable investment account dollars especially in the messy middle. I want to protect myself from this.