Why Infinite Banking is Scam: The Honest Insurance Guy

"The Honest Insurance Guy" series was created simply to bring full information to the table and scrutinize some of the statements being put out there by insurance agents and financial professionals. Subscribe for more content, and more truth!

Infinite banking is essentially the act of putting your money into an insurance policy to "borrow" from the insurance company and create cash flow. This is a redundant step, this video is not intended to start beef nor drama but to bring full disclosure to what could be a poor mistake. That is I'm doing bringing full information to the table so we can make informed decisions. As an insurance producer myself I have full incentive to also practice this thing but a believer I truly feel that this is a half truth lie designed to have individuals buy unnecessary amount of insurance enriching many insurance agents and companies along the way.

Psalms 112: 5
Proverbs 12: 22

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[TROBTLA]

Everything depends on how the policy is structured. These are essentially super-charged savings accounts which become more efficient over time. You are right, these policies are not for everyone for example, people who are financially undisciplined and those who are not willing or able to properly fund the policy. However, for those who are willing to do so, the Infinite Banking Concept, which is how you use the policy, not the policy itself, can be very powerful in creating and perpetuating generational wealth as well as providing a banking function to the policyowner. I only wish that I had started my policy 20 years ago. These policies really should be started at birth in my opinion. I am not in any way connected to the insurance or financial industries. Just a guy who goes to work and pays his bills.

[blessdachef]

This content is wrong...
This policy only lapse if you don't have any cash value left and you stop paying premium.

[mreverydaylife]

I'm also an honest insurance guy and been helping people with actual investments for 18yrs. I've heard those two give incorrect information, also Dave Ramsey, and now this video (no disrespect). The common denominator are incorrect examples. The comparisons that we all should be making is borrowing available cash value to pay for things we would pay for anyway and paying that amount back to the policy like an electric bill.
Say it's $100 per month. Borrow $1200 to pay it up for a year then pay the $100 that would've went to the electric bill back to the policy to fuel cash value. The borrowed cash value was never actually removed because it's an collateralized loan. So, the original $1200 still grows. And now, the extra $1200 can start to grow.
Hope this helps.

[georgesiblesz]

Finally, someone that mentions the premium payment portion of the argument.

As you mentioned, until the policy produces sufficient dividends to pay the premium, you are at risk of it lapsing and having to surrender the policy.

For those then that argue you should overfund it from the beginning, this implies you have tens of thousands of dollars which are disposable to do so early in the life of the policy. The vast majority of us don't have an extra $1, 000+ a month to just put towards a life insurance policy.

[richardpearson]

I can tell you that I've been doing this for years and it is absolutely a great stratergy.

[thetoptier]

Wealth nation… Carmen and Darius Britt saved my family!!! Our lives haves changed over the last 5 years when I first met wealth nation!

Now I see why they have 100k subscribers and you have 60 subscribers!

[kam]

Thank you for breaking this down, I keep seeing these people on social media talking about infinite banking and I was lost at how this is some solution.

[diannelouisy]

I have clients who are so grateful that during a pandemic they had sufficient cash value in their permanent policy to mitigate salary reductions.
You are not limited to what you put in because many companies pay dividends, so they they can take out much more than you put in. All of the many does not have to be repaid, i.e. the surrendered portion. I work with a company that is not a direct recognition when it comes to pulling out money. If the loan portion is not repaid it is simply deducted from the death benefit.. Illustrations assume you won't pay it back. Your analysis is lacking.

[emefadjovi]

After reading almost every comment and watching the video, people need more education than ever. ESPECIALLY IN OUR COMMUNITY! “My people perish because of lack of knowledge” and we wonder why the rich are getting richer but yet still refuse to be strategic and follow their foot step. Just make sure you talk to the right agent and get educated and structure your policy tailored to you so it can work. 😊 I know for me, I will not work with a real estate agent who does not invest the same way I will not work with a financial advisor who does not have anything to show for the goal and where I’m heading because they can’t give me what they do not have themselves. 🤷🏽‍♀️

[jessicastewart]

He's talking about a stock owned Insurance company. If you want to get into infinite banking, look into mutual owned Insurance companies exclusively. The way you borrow is different, and you receive a dividend.

[gqkusht]

I appreciate you striving to educate the public. I'm not an expert on the topic either. But from my understanding infinite banking is a permanent life insurance policy that also serves as a storage system for your cash. In a bank your cash grows at about .06 percent in a whole life policy it grows at a rate of about 3-5%.
Also the 15k you put in & the 12k you can access in year 3 sounds accurate. But what will that 15k be in 10 years, 15 years 20-30 years etc.

Infinite banking is NOT a get rich quick scheme or an alternative to stock market or real estate investing. It's a safe space to store cash, while also leveraging that cash, for investments, while potentially getting uninterrupted compounding(with a non direct recognition company), tax advantages as well as the fundamental element of life insurance which is a death benefit to bless your heirs.
Whole life insurance as well as infinite banking can be a useful & safe tool for a person's financial portfolio. People just have to actually study it & see if it fits their goals.

[subjectmatteramateur]

There are three salient points that you’re not considering that are very important.
1. After year 3 if you took out $12, 000 you still get a dividend.
2. You don’t have to surrender at year 5 you can have the policy be "reduced benefit paid in full."
3. If you did surrender this policy the cost for 5 years was $7, 000. If you kept it in force the cost for 5 years for this policy was $3, 000.
The question I have for you is could you get the same size policy for $3, 000 for 5 years in a term policy?
I’m not an agent so I can’t do an illustration.
More importantly is that now that I can see your illustration, I see that between year 4 and 5 the cost of the policy is actually nothing (the delta of cash value is equal to the annual outlay). This is a good company; would you be willing to share the name of the company or write one of these policies for me?

[doggie]

The insurance company is not in the business in making you rich

[MarkConwayTheBurgerKing]

Thanks y covering, the Downside.
Financial hardships can't find policy, need to surrender.
The Cash Value, versus Surrender Value loss is Discussing.
It Insurance and act as such.
It's not a Bank in financial hardships and crisis, when you would need your cash mostly.
Thanks for your full investigation and Disclosure.
Your a True gentleman 👍💯🔥

[ericchin]

Wow.

First financial person I've ever seen who makes it very simple to understand and follow along.

Really appreciate that. And your candor is unmatched.

[RealEstateHQ]

This was so helpful thank you for breaking this down and having an open mind giving us the foundation of what this is! What I’d like to know is where can I put my money where there is no downside. Meaning I can reap the benefits of when the market is good and my money can grow but it can’t fall under a certain cap value or limit. What policies or investments have those types of rules? Thank you in advance

[Novaknet]

The kind of policies they are speaking about you do t have to pay back the loans even though you should. If you choose not to pay back your loans, they will be deducted from the death benefit.

[maverick]

Make sure when making decisions to take inflation into the calculation. In addition, don’t get fooled about “even with the loan, the money never got taken out so it’s still earning.” You are paying interest on the loan AND you’re earning interest. The loan interest is likely higher than the earning rate - meaning you’re still going backwards. In addition, the loan against the policy is most likely equal or more than if you had gone to a bank. Don’t get tied up with the fancy money games.

[ballernation]

1. The point is to leverage your money to be your own bank. So instead of paying the bank, your paying your self while still acquiring the interest. Allowing you to repeat the process.
2. You only put the increasing death benefit, which is just one piece to structuring the policy. You forgot to add the Paid up additions riders
3. You wouldn’t put the whole 15, 000 into the the base of the policy you would split it 60/40 or 75/25 for a properly structure a IBC policy.

[geminimgeminim]

This a whole life policy I believe . It's not your average insurance company like MET life. There's a life insurance policy with a banking part.