A short instructional YouTube video (hosts Sarblo and Peter) explaining how to access money from a participating dividend-paying whole life policy using the Infinite Banking Concept (IBC). They compare withdrawal (which halts compounding) versus policy loans (which allow borrowing up to 90% of cash value without credit checks or income verification). Using a numeric example (policy started at age 45 with $500,000 death benefit, at age 48 the total DB is $560,000 and cash value $40,000), they show a policy loan could provide $36,000. Policy loans are private (not reported to credit bureaus), secured by the policy cash value/lien on death benefit, charge simple interest (compounded once per year), and do not interrupt cash value growth, dividends, or future death benefit increases.
Questions this video answers
$500,000
$560,000
$40,000
90%
$36,000
Chapters
But we're not going to stop the growth of your cash value. We're not going to interrupt your dividends, we're not going to interrupt the future growth of your death benefit. Nothing gets impacted. But here's the money. Pay us back on your terms. So your money is growing while using insurance companies money. So by borrowing insurance companies money, we haven't interrupted the growth of our own cash in the policy. So what is the cost of loss opportunity.
Accessing money with ibc? If you haven't already, please check out our video on breaking down the IBC tool as this video is the next step in the process. So now that you have a policy, how do you access money? We're going to take you through how you can access money using Infinite Banking and using the tool we talked about in the last video. It's a participating dividend paying whole life policy. Sarblo, where do we begin?
Now like Peter mentioned, if you haven't checked our video on breaking down the tool for ibc, make sure that you check that video. It's a prerequisite to this video. So without any further ado, let's just dive into this and you must have seen this graph in that prerequisite video which is breaking down the tool for IBC. So this person who started the policy at age 45 and the starting death benefit was $500,000. Now just by nature of how or by virtue of how we design the policy, if he's had the policy for for three years now he's age 48, the death benefit has increased to $560,000. So this is the total death benefit in the policy. Now I'm going to start talk about accessing money from policy. In this particular example, let's just say at age 48 for this.
Policy owner. So at age 48 and he's had this policy for three years now, so he's now age 48, his starting death benefit and policy, so starting DB which stands for death benefit was $500,000. Now his total death benefit at age 48. So total DB at age 48 with DB stands for death benefit is $560,000. Now the cash has been growing in the policy every single day since inception. And let's assume by the time he reaches age 48 is total cash values. So CV stands for cash value. Total cash values and policy are now.
$40,000.
And this person has the need for use of money. Now what they can do is so again this is their policy. It's a contract that is owned by them. They own the policy. They decide how to access money from the policy. Number one method is they can withdraw.
Money, which is the cash value, out of the policy. Now Peter, if they withdraw money from the policy, and the policy is an asset that is growing in value every single day because of the contractual guarantee, which is by age 100, total cash values must match total death benefit. So if they elect to withdraw money from the policy, which they can, what would happen to future growth of the policy? Will it continue or will it just have to be reset again?
Well, this becomes a reset you've now withdrawn and you stop the compounding of the growth of your money. Right?
So then you have to go back and rebuild the asset again. You have the option called withdrawal. But we would never elect that option because remember, money has value. And the first value of money is the future value of money, what it can earned for us in future. So by virtue of us withdrawing money, we take away the future value of money. The other way we can access money is via a method called a policy loan. At any time we want, we can borrow 90% of our cash values via loan from the insurance company directly. So insurance companies stipulate that in the policy contract that as a policy owner you can access 90% of your cash as a loan. And when we elect money as a loan, going back to this example, let's assume that the total cash values are $40,000 and the total death benefit at that time is $560,000. And they want to initiate a policy loan. Well, they can borrow 90% of the cash value, which in this case is $36,000.
As a loan from the insurance company. And what insurance company will do is they'll use your cash, your cash that you have in policy as collateral and they'll put a lien on your death benefit for the amount that you borrow. So they'll give you the money. No questions are going to be asked on that loan. So Peter, can you walk us through the steps required in a policy loan? Like what is the qualification for a policy loan?
Well, it'll be a little bit sound abnormal to people who are used to getting loans from a bank where there's a lengthy process, maybe credit checks, etc. It's simple as just filling out a form and sending it in and saying, I would like my money. And they're going to ask you how would you like your money? And it's going to be either you're going to get electronic transfer or you're going to get a check sent to you that's basically it.
So just to confirm, Peter, is there a credit check to request a policy loan?
No.
Is there income verification required for a policy loan?
No.
Is there a consent to repayment terms required for a policy loan?
No. I'm not going to say yes to any of these.
Now, does this policy loan show up on Equifax or Transunion as a debt?
No. It's a private contract.
So the contract is private. But the money that you're able to access as loan from the insurance company, that is also private. So that money which shows up as a policy loan doesn't get reported anywhere. It's just private between you and the insurance company. They'll use your cash and the policy as collateral. They'll. They'll put a lien on your death benefit because if you don't pay back the loan while you're alive, they'll take it from a death benefit one year gone because nobody has a lease in life. One day we're going to graduate. It'll be paid out of the death benefit. So it doesn't leave insurance company.
Indebted at all. Right, so let's go back to this example. So in this particular case, they're able to get $36,000 as loan from insurance company. And the collateral.
For the loan.
Is the policy owner's cash value and the lien is the death benefit. Right.
Now that money showed up. So Peter, when they request money via policy loan, does that interrupt the growth of their cash values in the policy?
That's the great part about this, is that you're not using your own money, you're using the insurance company's money. So your money continues to grow daily.
Yes. So by accessing money as a loan, like Peter mentioned, it comes from the insurance company, your cash still continues to grow in the policy every single day uninterrupted, because insurance company still need to fulfill your contractual guarantee, which is by age 100, your cash value must match your death benefit. Now, Peter, does a policy loan interrupt the growth in the dividend? Sorry, Growth in the death benefit going forward? No.
It doesn't impact that either?
No. Does the policy loan impact your future dividends in the policy?
No.
So nothing gets impacted. You have the money. Now, will there going to be interest on the policy loan?
Yes, there is.
There is. And why is there interest on the policy loan?
Well, I don't know anyone who likes to just lend out money for free. Right.
See, insurance companies, their obligation is to their participating policy owners to produce a profit. Because we are the existing Owners in the business. So if insurance companies say to us, well, this is our business, we are in this together. If we can deploy this capital somewhere else that you're accessing as a loan and make profit for you, why should we give you this money for free? If you give you this money for free, it beats the objective of us being in business, which is to make profit for you guys. So we're going to charge interest on it. It's simple interest. It's not compound interest. It's simple interest which compounds one time per year. But we're not going to stop the growth of your cash value. We're not going to interrupt your dividends, we're not going to interrupt the future growth of your death benefit. Nothing gets impacted. But here's the money. Pay us back on your terms. So your money is growing while you're using insurance companies money. So by borrowing insurance company's money, we haven't interrupted the growth of our own cash in the policy. So what is the cost of loss opportunity in this case, Peter?
Yeah, if you're continuing to use someone else's, in this case the insurance company's money, you're able to take advantage of opportunities and lost opportunity is you're actually getting it back. You're not losing.
There's no cost of lost opportunity because you're not stopping the growth of your money for things that you would otherwise use your own cash and perhaps borrow money from third party finance companies as loan to buy those goods and services. Now you're able to do all that by using insurance companies money while your money continues to grow and as a banker in the transaction, because when you initiate a policy loan, you determine when to pay back the policy loan, you set your loan repayments back into the policy. Now if you're paying back the loan into an ever growing pool of capital because you're paying back the money, as your cash is growing, you, you're able to re borrow everything that you're putting back in principal and interest again because you're not interrupting the growth of your capital. You're able to re access all that money out and plus more because your cash kept growing in the policy every single day. And by paying it back, you're making more money available to be used again in future because opportunities are going to come find you when you have readily available access to capital. So when you are taking a policy loan, be an honest banker, pay your system back because it puts more money back on the shelf for you to reuse again.
No, I think that was a great, you know, series of videos that we've gone through the last couple breaking down the IBC tool and now accessing money with ibc. I think there's a, you know, these are great. Some foundational videos on the tools that we use and why we use them. There's a lot more content on the Bankers Vault that will take you through become your own banker. And if you haven't already, you know, we're gonna, we're gonna drop a link on this to get this book because this is really the foundation of understanding why we're doing this. And then also, the masterclass for IBC is located in the Bankers Vault amongst many videos that we're building in this channel. So if you're looking to learn more about how to become your own banker, subscribe and you're gonna see a lot more content on it.
Yep, absolutely. So be a wealth creator by taking policy loans and financing things in your life using the process of becoming your own banker. Stop being a saver and a debtor. If you haven't watched that video that we did as on a saver, debtor and wealth creator. Well, make sure that you check that video out also.
