What Is The Interest Rate Of Infinite Banking Policy Loans in Canada?

16 Jan 2021 · 1 min

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1:29

Excerpt from a YouTube video (Jayson Lowe) explaining policy loan interest rates for infinite banking in Canada. The speaker lists example loan rates across insurers (about 4.8%, 6.85%, 5.45%), stresses that lower loan rate alone shouldn't determine policy choice, and explains how policy loan interest accrues if unpaid (example: $10,000 at 7% grows to $10,700 after one year).

Questions this video answers

Approximately 4.8%, 6.85%, and 5.45% (speaker-stated examples).

$700 interest for the year, leaving a balance of $10,700 at the start of the next year.

Chapters

Interest rate on policy loans. There's one company, I think that's at about 4.8 right now. There's another one that's at 6.85. There's one that's at 5.45. So they're a little all over the map. It just depends on where you're at. Just because a company has a lower loan rate doesn't mean that that's the right place to go put a policy. Because there are many other factors that need to be considered, and that is something that is part of one on one discussion. Okay, so policy loans, how are they calculated? Okay. This is something that I think is helpful to know. I get questions on this from time to time. It's maybe not as big of an faq, but I certainly think it's important to cover. So these loans are kind of like a credit line. Very much like if you've had a home equity line of credit or something like, it's in that fashion. However, those types of things require a minimum interest payment. Usually the insurance company doesn't. They just roll it up. And so the interest is based on an annual rate. Technically, you don't have to make payments, but it's very much recommended. If you don't make payments, then the interest will continue to grow. But a way to look at this is just very, very, very simple. If you had $10,000 and the interest rate was say 7% and you didn't send a single payment back, the total interest cost would be 700 bucks for the year. So if you said no interest payments back then starting in the next year, you have 10,700 owed. That's how it would work. Very basic. And the key thing, though is that your cash, as we talked about, continues to grow, even though there's an outstanding long.