What is an Infinite Banking Policy?

There is no infinite banking policy. There is only an insurance contract, dividend paying, participating whole life insurance. And an advisor could design and work with a hand in hand with a client to construct such a policy in the way that it is very functional for the purpose of that individual policy owner to utilize it in such a way that they can incorporate the process of becoming their own banker.

Rich, today we're going to talk about what is an infinite banking policy. The reason is that there's a lot of marketing out there and.

A lot.

Of people using that language. Hey, you can contact us to get your infinite banking policy. So Rich, what is an infinite banking policy?

Three words put together that never should be.

It doesn't exist.

There's no such thing.

There's no such thing. And I was just sharing a story with you prior to hitting the record button. You know, I messaged a colleague, someone who I care for and who want to see continue, have great success and untapped success, wish their team amazing abundance, but had to just share that feedback to say, I think it's really important that we're not using language like that because A, no such product exists.

No product that you can get like that.

The infinite banking concept is a process, it's not a product. B, you can put yourself in the shoes of life insurance industry and you can just imagine the questions around the boardroom table going, does anybody know what an infinite banking policy is? Because we certainly don't sell them here and we know the nuances. As authorized infinite banking practitioners, we know the nuances. The insurance industry and the general public do not know those nuances. And so it is so important for us to just emphasize that to anyone who's watching and listening when you're consuming content out there on the Internet about the process of becoming your own banker, the infinite banking concept. And you're hearing people say the words get your infinite banking policy. Now you know firsthand from the both of us who have been practicing this process and specializing in this process since 2008 that no such policy exists.

So a couple funny things I want to, you know, tie into here. I mean obviously the statement is bold and clear, but you know, I've got Nelson's book in front of me, always have it nearby, very first page, page three, introduction. Becoming your own banker. The infinite banking concept is a text for a 10 hour course of instruction about the power of dividend paying whole life insurance. Not the power of an infinite banking style policy or an infinite banking policy. The power of dividend paying whole life insurance. Yeah, it is not a sales tool for life insurance agent agents. It is education that the life insurance industry. So he's painting the industry with a big paintbrush.

Yeah.

Should have taught. During the last 200 years, unfortunately, the industry has concentrated on the death benefit qualities of the contract and has neglected to adequately describe the financing capabilities that it presents for the policy owners. Right. Ironically, life insurance companies must put premium income to work in various investments in order to pay the death claims. So Nelson says it right in the first paragraph. And further to that, you know, you know, recently we put together, you know, 12 step getting started guide that we like our clients to go through when they come aboard and they start working with our team. It recommends very specific items to do as far as setting up the policy, paying your premium, online banking related activities, as well as a list of video content that we want people to go through for the first 90 days, the first six months. And then there's some optional stuff in there, a recommended time commitment to your learning, etc. You know, at the very bottom of that document is do's and don'ts. And you know what the first I'm going to read the very first don't to you here, Jay. It says do not refer to your whole life policy as an infinite banking policy. It is a whole life policy, plain and simple. Infinite banking, that's what it is, is a concept, not a product. It is a way you do things in your life. An insurance policy is simply a policy that allows you to have more control. You do things in your financial life.

That's right.

Boom. It's right there.

So great way of putting it.

Not only are we, do we, do we suggest and heavily recommend and would, you know, extremely encourage anyone who is in an advisory role talking about this concept. First of all, you should be an authorized infinite banking practitioner with the Nelson Nash Institute. If you're not, please go to the institute apply to see if they'll accept you into the program. You should also, if you're a member of that organization, you should be attending the annual think tank conference. Highly recommend that. It's an amazing opportunity to meet and connect with other people. But the, if you're, you're trying to explain this concept and you're not a using the source material Nelson's book, and you're using language. So the idea or the, or the statement of infinite Banking policy is, is the brain's way of shortcutting information and it's, it's. I don't think people saying that are doing it in a way where they're trying to, at least in general. I don't think people are doing it where they're trying to mislead the general public. They're just trying to look for a way to simplify or shortcut the information. And it's sometimes it's cooler or maybe nicer to say than saying dividend paying whole life insurance.

It's sensationalizing. It is, it's completely unnecessary. And you're right, like it's not questioning anyone or any organization's intention.

Right?

Because people who truly understand the process really want to serve the people. They really want to do great work and serve the people. So the last thing we want to do is put ourselves in a situation where you've got insurance carriers, we need them on our side because they provide great tools. And the moment that they won't understand it and you start referring to a policy as a banking policy. Now you've got the banking industry looking at it and going what is that? First and foremost? And then only to come to realize that it doesn't exist. Nelson told us all the time, infinite banking concepts does not need to be sensationalized. It is ridiculously simple. And that the tool for the job is participating dividend paying whole life insurance and that the policy owner needs to understand that's what you're purchasing if you want to implement the process of becoming your own banker. The infinite banking concept, the tool is the life insurance policy or ideally a system of policies. But the distinction and how we describe things Nelson talked about all the time correctly classifying things to say that a life insurance policy is somehow putting on an infinite banking wetsuit and saying now I'm an infinite banking policy. It's just not accurate, it's untrue. And so it's, I hope, hey, and I hope that a colleague would reach out to me, right, if I was saying something, I hope that a colleague would, would be courageous enough, right, Just to say, hey, you know what, I just want to bring this to your attention. And it's coming from a place of care and respect and, and you know.

In the past I'm sure there's been a lot of things that, you know, I've said that maybe were not, not certainly not as accurate as they could have been around the process or you know, some of it might have been limited to my thinking at the time. It could have been limited to maybe how much I was reading Nelson's book, who knows. And so we're all growing, we're all improving. And so when we, when we recognize that we have an opportunity to create clarity. We should state that clarity. And that's, that's the purpose of what we're doing here. And we also want to make sure that for our clients, those that we already serve and those that we, we wish to serve in the future. Yeah. That they recognize and understand that the language around this is very important. And I'll give you a couple of reasons for that. So just imagine for a moment you have, you know, there's, you know, there's a, hundreds of advisors out in the marketplace and they're all wonderful, great, well intentioned people and they're out communicating about this process or there's, or they're claiming to communicate about this process.

Yeah.

And they're telling their clients about, you know, infinite banking, this and that and your infinite banking. You know, they say they state your infinite banking policy in meetings and in their education process and so forth. Well, now the client needs to call into the life carrier to inquire about their contract. Their contract is with the life insurance company, it's not with the advisor. That's right. And they, as a policy owner, not only do they have the right, they shouldn't be encouraged to exercise their right as a policy owner to communicate directly with the life insurance carrier because Absolutely. That's who their relationship is. Was, contractually speaking. Yeah. And so if they call in and they are speaking to, you know, whoever the nice person is that you know is the next in the queue to receive that call and they say, oh yeah, I'm just calling about my infinite banking policy. Well, the life carrier at the person on the other line is like, I don't know what that is. We don't sell one of those. What is that? And they're going to make a note in the file about oh, we're receiving these calls and then they're going to have a meeting with their upper management. Oh, we keep getting calls about infinite banking policies. Do we sell those? What is that all about?

Right.

And then that's going to go to some compliance department and some other conversations are going to take place. And there's the statement that one rotten apple can upset the whole apple cart. Is it something to that effect? So it's not that we're doing anything and that people are doing that intentionally, but they're not looking at, from a long term perspective, what is the implication and the impact of that? I guess, for lack of better terminology, lazy way of explaining what's actually going on.

Yeah.

There is no infinite banking policy. There is only an insurance Contract, dividend paying, participating whole life insurance. And an advisor could design and work with a hand in hand with a client to construct such a policy in the way that it is very functional for the purpose of that individual policy owner to utilize it in such a way that they can incorporate the process of becoming their own banker.

It again, it goes back to the ridiculous simplicity. You have a unilateral binding contract that has a loan provision. That's it. Explain it clearly to your prospective client or to your existing client to be able to say, here's the distinction, unilateral binding contract. You pay premium. In exchange for that premium, the insurance company is promising to fulfill all of the guarantees embedded in that contract that are designed to protect you. One of those provisions is that you can request a policy loan from the life insurance company at any time, for any purpose. You're describing the attributes of a contract. What you do with the life insurance company's money is set about controlling how you finance all the things that you need throughout your lifetime. That's implementing a process which is independent.

Of the contract itself or any communication with the life company at all.

Because process is not what you do with the money. And so when the life insurance companies want to better understand it and it's explained where there is a very clear distinction, the life insurance companies get it because they understand. Oh, okay, yeah, we understand that, you know, you've been through a process, you've established a need, the death benefit actually has merit, the client understands what exactly it is they own. And then outside of that, now that you have a client advisor relationship, you're now coaching your client on how to implement a process. And through the implementation of that process, the client is going to exercise their contractual authority to request a policy loan periodically from the life insurance company. Great, we get it. But when we start to sensationalize it, have your dollar doing two jobs at once and get rich buying cars and buy your infinite banking policy from me and all that stuff that's just sensationalizing it. And it can create a perception with the general public that simply isn't true. And we've just got to encourage all of our amazing colleagues in the industry to just rethink their thinking around that so that we can all continue to serve the people and serve them with this amazing process.

I'll take it a little bit further than that too, because the banker. So the role or the concept of who the banker is in your life, which Nelson discusses in, in all of his seminars and his book, etc. Yeah. Is. Is that someone has to perform that function. Someone is doing it for you right now. That's true. Just that it can and it should be you.

That's right.

That, that is the person in, in the, in the, you know, Nelson talks about the characters in the play and we've got lots of content about this, Jay. But the banker is the person that makes the rules. In other words, what's the payment schedule? Should you. Can you take the loan? What's the interest rate you pay it back at? What are the provisions for missed payments? Like those kind of things. So the insurance carrier is an insurance company. They provide valuable services and products for. For the consumer. And you acquire them as a consumer.

That's right.

They, they have jobs to do. And their job is not to Mickey Mouse a bunch of stupid transactions that you're doing because you're trying to turn the insurance company into a brick and mortar bank.

That's.

That's not correct.

Right.

You are the banker. You conduct your transactional activity the way that you see fit with your regular bank account. Right. You receive money from a policy loan if you request it, and then you choose how to repay it. Now you can set that up in a very dirt simple format that limits the amount of required communication with the insurance carrier so that you're not creating a burden on the insurance carrier system.

Yeah.

If we are in a mutual company, Jay, you and I, we own a grocery store. We want our grocery store to be profitable, don't we? We're going to go do our shopping at the same grocery store. Yeah.

Yeah.

Okay. If for some reason I show up one day to the grocery store and you've just hired a whole bunch of extra, you know, you know, warehouse people and, and people, you know, we got 14 butchers standing in the back of the grocery store waiting to cut meat that doesn't exist. Like you've just hired a bunch of people at random. I would probably be really curious, like, why are you increasing the expense load of our grocery store when it's not necessary? Right. So the insurance company has to hire people. There's great people that work there. We're really happy. We love those people. They do a great job. And every time that they do that, that's an expense to the insurance companies line the books. So that has to be a warranted expense. Well, if they're hiring people unnecessarily because they got to deal with a bunch of Mickey Mouse stupid transaction activity that wasn't previously happening, well, that's, that dilutes the profitability of the pool for everybody.

Yeah.

So if you're an owner and you're thinking like an owner, how you communicate to the life company should represent that.

Yeah, really, really good point. And it's firstly, you know, on a positive note, the fact that the concept, the process is being discussed to a degree in the marketplace today that you and I could have only dreamed of when we first started on our journey.

Right.

Because everybody trying to get.

Trying to get an insurance company to even, like, take a call, to even discuss what.

Oh, my God. And people thought that we were like, clinically insane for, you know, trying. Trying to share this. This concept and process. And. And now you've got. And thank goodness you've got an ever increasing number of advisors who want to embrace this. Everyone's motivations, being their own, teach their own. That's. That's fine. But the fact that we have more and more advisors embracing this is a great thing. And we used to think in our earliest days in our journey, wow, we got to figure out a way to corner the market or whatever it was. And it was like, we just, oh, my God, it's such a stupid train of thought because I'll never forget going to. And I got to. Again, I have to give shout out to Dan Sullivan, shout out to strategic coach and the amazing team there. I'll never Forget October of 2018, Toronto, Ontario. Strategic coach office. Dan Sullivan says you don't have to own the ocean in order to sail on it. It's just like, poof. You know, because it was just wanting to kind of be, you know, I have. I don't know, all my cells are hardwired as a. As a fierce competitor. I love to compete. And Dan was like, well, if you start. Because him and Nelson would have been such amazing kindred spirits. Like he said, well, if you start to think collaboratively and stop thinking competitively, collaboration opportunities will begin to appear everywhere. And I was like, what was that that you just said? Because I just opened up a whole new pathway of thinking. And I've got to really give him credit to that. And so I love the fact that more advisors are talking about this and more advisors are educating their clients and getting Nelson's book in their hands. And we have amazing connections with advisors who reach out to us all the time, say, hey, you know, we. We listen to your content and it's great if our. If you're an advisor listening to this and our content has had a positive. Yeah, and. And our content has had a positive impact on you and your practice, and that's Great. That means that that part of our mission is getting accomplished. And now that we're a managing general agency and opening up the gate to affiliate with a lot of really amazing people. I shared this in our kickoff Q3 kickoff. We're going to have two lineups out the door. We've already got one. And that lineup is of people who want to be clients. And the other lineup is going to be a lineup of advisors who want to affiliate with an organization that specializes in the implementation of this process and has been doing so since inception. And so who do you want to be affiliated with? The generalist or the Specialist? I can tell you that when you look at your performance and your income earning potential and all these other things, it's going to look much different in the generalist column than the Specialist column.

Do you remember how you used to have to send postdated checks in for your loan repayments and stuff? So I, I, you know, you're, I just think it's so funny because you.

Had to call to get the policy values.

Yeah, you, you, you did. There wasn't an online way to log in.

Yeah.

Or, or, and at one point the advisor had to go and learn everything, figure everything out for you. Everything was gated from the client, the client experience. And it was so frustrating and archaic and it. Not to say that there's not still some of that going on, certainly with many carriers that is the case. But yeah, yeah. In general, just, just, just the world that we have the ability to play in today and, and the functionality that's available for people who want to embrace this concept in comparison to where we became aware of it and then in comparison to Nelson's book published in the year 2000, like what do you think they were. What was Nelson doing? Nelson was doing everything by check. I, I guarantee you every. Yep. And he was totally fine and happy and everything just worked fine. And he didn't complain about the fact that he didn't have an online this or didn't have a that. Like none of that made any damn bit of difference. Nelson would have said that's majoring in the minors. So, but, but just to have a reference point of, in a, in a 20, 23 year period of time, how much positive change has been created and even just in the experience of time since I first got this book in 2009 to today, what we can do, what we understand we can do, what insurance companies have modified and I guess for lack of better terms, we'll say improved upon the continued improvement. I mean a Lot of investments going into things like technology going from a place where you used to have to print, you know, you couldn't even use like you know, Docusign type technology to do your loan requests. You had to print scan everything. We had people, some people were sending in their stuff by mail, you know, with a good old stamp. Like all the things that have changed, changed just in our period of time of doing this to today where now I have automated trans. I have multiple automated transactions post dated set up in my online banking. Loan repayments getting made to the life company for different things. It's been communicated one time what I want them to do with the money. I'm not burdening them with a thousand emails. I am as an advisor, as a, as a client. I'm not, you know, I, you know. Now there's an ability that you know we've been testing about being able to actually engage with taking policy loans digitally now without having to fill in Mickey Mouse paperwork.

And that's an exclusive test with Ascendant Financial in the country.

By the way, the feedback has been quite proud of that. The, our client, we have a client focus group that we did. We're directly with the life company sharing their experiences of what they like, what they didn't like. Life companies actually listening to those things. They're looking at making implementative changes. I mean just, just the total environment is just completely changed in the ability for the consumer to be able to be the, the, the writer of their own story in relation to how they want to implement this process in their life all day long and, and simple things like using the right terminology of understand, understanding what is it.

You have correct classification, dividend paying, participating.

Whole life insurance contract. It's got a policy number. You have a life policy, this is what it is. You can take a policy loan, here's how you do it. You could pay it back at your schedule. You dictate the terms at your level. You don't have to call. The life company says I send a loan payment in. Can you apply it like you just send an email, make it clear. Policy number, subject line like very simple template. Repeat, repeat, repeat, repeatable process. It does not have to be complicated.

That's exactly it. Well said and happy that we can just get this message out there and again to, to any advisors out there. Thank you for listening and hopefully you found this helpful and clarifying as well. And we'd certainly love to hear from you if, if you have any suggestions or if you disagree with what we said, connect with us. We'd love to hear, we'd love to hear from you. And we wish you every success in your practice and, and what you're doing to serve the people in your own marketplace well.

And for our, for our clients and the people tuning in, I would also just encourage, again, most times we speak to people and they're looking to communicate this message to friends and family and colleagues and co workers. We love that, we encourage that and some people do an exceptional job at it. But again, you don't need to sensationalize anything either. You just communicate what you've learned, what's true for you. You know, again, what do you have, you don't have an infinite banking style policy. You have an insurance contract. And what you can talk about, of course, is the process that you're implementing. The process of infinite banking. Of course you can, you can discuss that.

Yeah.

But, but if it comes down to people asking a bunch of Mickey Mouse questions about the insurance that. Insurance that, just make sure that you're creating a good barrier of discussion between the two different segments. Insurance process. Yeah.

Versus product.

Great advice.

And to all of our viewers, again, this happens every time. Credit to our amazing editing team. Continue your journey of learning. The reason that the video the playlist came up is because YouTube is really intelligent and has served up more of our content. And thank you YouTube for that. Shout out to YouTube. Stay awesome and we want you as the viewer to.

Be great.

Thanks for watching. Thanks for tuning in, Rich. This was fun as always.