Choosing the Right Life Insurance Company for IBC (Infinite Banking Concept)

Choosing the Right Life Insurance Company for IBC (Infinite Banking Concept)

How does one choose the right LIC to practice infinite Banking with? (See Agent Finder below as well)

Thanks, GL

Hi Gary, This is a very important question as a client must understand the differences between insurance companies before being able to make an informed decision about whether what they are being told is a great company with a great product, really is properly set up for banking.

* Although first off, here is an important point to consider. If you had a choice between having Tiger Woods swing or a $100,000 golf club, which would you choose?

Obviously Tiger could golf with a broken tree branch and still beat me, so, it is not necessarily the product that is most important. It is HOW YOU USE THE PRODUCT that is THE MOST IMPORTANT thing to remember when becoming your own banker.

Now obviously a $100,000 golf club will work a heck of a lot better for Tiger than a broken tree branch and certain insurance companies definitely offer products more conducive to Private Reserve Banking than others but the normal growth in any dividend paying whole life insurance policy in nothing to jump and down about.

What makes the policy lucrative is how you velocitize the money flowing through that policy. Just like the banks and insurance companies do, if you are not borrowing that money to velocitize it for yourself your life insurance policy will not look like a great deal.

* This leads to knowing whether a company actually offers a Dividend Paying Whole Life Insurance policy with a PUA rider or not. If not, that is not the company you want to work with. If yes, then that is the first check mark on your list.

Please read my article on why dividend paying, whole life insurance is the best type of POLICY to use for banking, rather than universal life or variable life.

* Now I would like you to determine whether the company is a stock company or a mutual company. Click on the link below to read my article on the differences between the two before continuing. Difference-Between-a-STOCK-and-a-MUTUAL-Insurance-Company

* There are two types of Mutual Insurance companies . They are called direct recognition and non-direct recognition. I have policies in both these types of companies.

Non-Direct means the policy owner receives the same dividend rate as those who had not borrowed any money, no matter how many dollars he has borrowed from the insurance company using his death benefit as collateral. So you may have borrowed $10,000 whereas another policy owner borrowed $100,000 but you both earn the same dividend rate. Or you may not have borrowed anything but you would still earn the same dividend as someone else who has borrowed and is using that borrowed money to earn even more profit somewhere else outside the policy. However, some companies do reduce the death benefit each time you take a loan. The dividends are based on calculations that include the death benefit as a percentage of ownership. Other companies just lower the dividend rate for all to cover their loss of use of those dollars for themselves. So all money in a cash value position, that is not collateralized for loans, will earn the lower percentage dividend not just the lent portion of the money.

Direct means the company determines the dividend rate according to policy holders fair share according to how many dollars he has borrowed from the insurance company’s general fund using his death benefit as collateral. No matter what the amount of dollars on loan to you is, those particular dollars will receive a lower  dividend rate while those dollars not collateralized will receive the higher rate. The death benefit is not reduced in this instance to determine the percentage of ownership either.

Now, why does this matter? Well, it doesn’t really matter a whole lot but some insurance agents use the fact that a company is a non-direct company as a selling point when trying to sell someone a policy. But it is good to understand that an insurance company makes money using the velocity of cash flow, just like a bank does. If you have your money sitting in a 5 or 10 year CD at the bank, the bank knows that it has a set amount of money that it can lend over and over and over again during that set period of time.  An insurance company does the same thing. You pay your premium and it can lend an amount of money over and over and over again for a lifetime. However, if YOU borrow money from your life insurance company, now they can no longer velocitize that money. Instead, you are now in control to velocitize your own money.

However, one must consider this fact. How long will an insurance company be able to stay in business if a large portion of their policy owners are receiving an unfair share of the profits? Who actually owns the insurance company again? The policy owners. That would be YOU.

Some of the non-direct recognition companies restrict the number of loans, or the amount one can take as a loan or the number of policies one can own etc. Do you want to have a policy that restricts your capital availability? Some non-direct recognition companies fire the agents that tell their clients about privatized banking and also some have been bought by stock companies and are in the process of converting from mutual to stock because too many of their customers were borrowing from their policies.

Learn more about Direct and Non-Direct here.

The company I recommend most often is a direct recognition company. I also recommend non-direct and even one stock company has a great policy design. It all depends on each clients age, health, premium amount and other financial goals as to which company actually suits the clients needs most. If you are a smoker of cigars, pipes or cigarettes, there is a particular company that has more lenient underwriting. Other companies are better for older clients versus younger clients etc. But let’s look into this further below.

* The next point to consider when deciding on which company to use for your family banking system would be this; does the company embrace the private reserve banking concept? As I mentioned above, I have policies in two different companies. One of these companies does not embrace the banking concept so this can cause a few issues. That doesn’t mean I cannot bank with the policy, however what it does mean is…..

1.       You cannot talk to anyone at the company about banking. They do not know what you are talking about.

2.       The policy I was sold, before I knew better, was designed using different products and riders all offered by this company but were put together in a particular package deal. The insurance agent who sold me the policy is no longer contactable and the promise of being educated about how to best utilize this particular policy for banking never manifested. After learning about banking policies from a different company and a different group of people, I have since found out that the Annual Renewable Term insurance rider that is attached to this policy could be an issue in the future because of  the increasing cost of the Term and if I drop the Term it could MEC the policy turning it into a taxable investment instead. Among other issues. In fact, from day one, it was set to MEC 20 years down the road. I was never informed of this.

3.       This policy was presented as one thing and it looked great on paper, looking at the numbers which were the non-guaranteed numbers, but when comparing these with the other company I am now with, it is – night and day.

4.       Many agents/companies don’t mind showing policies that they know will MEC in the future believing that between now and 20 years down the road anything could happen so it will not matter. The MEC’d status could be fixed before then. But the client is never told this fact. By illustrating a policy as a MEC, the upfront numbers are going to look a lot better than a policy designed not to MEC in the future.

5.        Paid-Up Addition Riders. Each company has different rules regarding these riders. It is most important that the client understand the characteristics of this rider. Make sure you are given ALL the details about how this rider performs over the years so you do not end up losing it. These differences may determine which companies policy design suits your needs most.

6.        A policy designed with a term rider added. Another important aspect a client must understand is what happens to their policy when the term ends? Is the term convertible and what are the rules involved in that conversion?

Now I want to talk about the company I most highly recommend and is the most favorite of the few I use myself in general terms. Of all the over 2000 insurance companies in the US, only around 38 are mutual and one in particular was the first and most enthusiastic to embrace designing policies for banking with the collateralization of the cash value portion. In fact, it is this company and the team of agents I am working with that have taught me what I wasn’t taught about my first policy. I am not mentioning the names of either of these companies for various reasons.  Some of them are because legally I cannot. If you want to talk to me in person, that is a different story.

Here are some of the points to consider

1.       The company staff have been trained by Nelson Nash himself, the original creator of this banking concept and author of the best-selling book Becoming Your Own Banker. This company has invited Nelson Nash to their main office 3 times, to educate their staff about this concept

2.       This company also, has educational webinars for their agents on the IBC concept.

3.       They have provided a back office area for clients to keep track of their loans, cash value, death benefit, dividends and more.

4.       You can call the company and talk about using your policy for financing the things of life and they know what you are talking about and are helpful as well.

5.       More importantly though is the fact that they have specially designed for private reserve banking policies that we as agents can easily share with our clients using the patented illustration software they also provide.

6.       This policy is designed for ‘maximum cash accumulation’ for the client and minimum commission for the agent, versus minimum cash value for the client and maximum commission for the agent. We give you the most cash value the government will allow.

7.       96% of this companies business is dividend paying whole life insurance. They have been in business for over 100 years and have mastered financing with their policy cash values as a process. I will not go into any other special features here. If you want to know more, you will have to contact me. Just remember this though, the most important part of banking is easy access to capital.

* One last point to consider. Insurance companies are given third party ratings. However, the more diversified the company’s portfolio, can mean the difference between a higher or lower rating. A  probably just as important if not more important consideration is the RBC or Risk Based Capital. RBC is the ratio of reserves to risk that a company has. Also, it was the Insurance Commissioners themselves that designed the RBC calculations and that is what they base their ratings on. They do not base their ratings on the third party companies that have created their own rating system. So if the commissioners use the RBC rating then I want to as well. The insurance company I work with has an RBC of 470 or another way to say it is that if all of their clients died at once, this company could pay the death benefit claims of each of their policy holders 4.7 times and still be strong enough to continue doing business. That is a pretty strong place to be in.

The group of agents I work with at Life Strategies Insurance Group are headed by two people who have been best friends with Nelson Nash and who have been taught the Becoming Your Own Banker concept directly by him for the past 10 years. Their goal is to educate their clients in the way Nelson Nash wants this concept to be taught and to make this a continuing educational process for the client rather than a quick sale for the agent.

I am so thankful to be a part of this group of professionals who place integrity and education before a quick sale. They have the knowledge, they have the experience and they have the desire to pass on this knowledge to their agents by mentoring them to the point that the agent is comfortable working either without the mentor or only on occasion using the mentor and have passed a test that shows they really do have the knowledge necessary to represent the high standard that LSIG demands.

Believe me when I say, it not only matters which actual insurance company you choose to hold your policy with as a part owner of that company, it also matters greatly the level of education your agent has about the design of the policy he/she is presenting for you to use as your private reserve for financing your life wants and needs. It also matters what type of company your insurance agent represents.

But most of all it matters whether you are just being  sold a policy or whether are you being offered a lifetime relationship which includes an ongoing educational process in the velocitizing of your cash flow in your own private banking system that will change your life and the lives of your children and their children. There is no use owning any policy if you don’t know how to properly utilize its benefits. There is no use owning a $100,000 golf club if you don’t put in the effort to learn how to golf with it. We expect our clients to put in the effort to learn this process with us. Us knowing will not help you if you don’t put in the required effort to learn as well. We also expect our clients to read Nelson Nash’s book Becoming Your Own Banker to prove they are serious about moving forward with this process. I can mail you a book if you wish to purchase from me for $25.00 includes shipping and handling. Pay through paypal or send me a cheque.

I hope this short list of a few points for a client to consider is beneficial for their research . For those who would like to be an agent,  know that we offer training webinars two to three times a week, you can also do weekly training webinars with the insurance company we use.  We provide mentors that work with you hand in hand with your clients and we also work with the ACT software and Cash Flow Coaches for making the managing of yours and your clients private reserve banking systems easy to use, easy to track accurately and be supported in many ways on your financial navigation journey to wealth freedom.

CONTACT ME – Jennifer Hansen at 845-649-7487 or email me at

Finding an Authorized IBC Agent is just as important.

Here is the official authorized AGENT FINDER for your convenience.

December 22, 2010 · Jennifer · 15 Comments
Tags: , , , , , , , , ,  · Posted in: BANKING with INSURANCE, Which Insurance co. is best for Banking?

15 Responses

  1. Arthur - March 19, 2015


    Would you please send me the name of the company you are referencing in the article? Thank you.

  2. administrator - June 12, 2015

    For quite some time now I have not rec­om­mended a par­tic­u­lar insur­ance com­pany due to the fact that oth­ers have, since I wrote that article, jumped on board and are happy to embrace this con­cept.
    Some com­pa­nies are able to set poli­cies up like a bank­ing sys­tem but they do not embrace this con­cept.
    We work with a num­ber of com­pa­nies that do embrace it and due to each com­pany pro­vid­ing dif­fer­ing rules and illus­tra­tions, we always com­pare a num­ber of them and have the client decide which suits them accord­ing to their goals.

  3. Tony Luisi - December 4, 2016

    Dear Jennifer:

    I have been researching the IBC concept for the last month everyday. I have read Nash’s book, and Yellen, etc…getting my hands on an info I can both pro and con.

    I want to get started on a policy or policies for me and my family; although, I am 56 years old now. I figure its never too late to start. I took beating in my 457(b) plan and I now no longer have it. I’m done with the rip offs and stock market.

    You mentioned in your article that Nelson Nash trained a specific Insurance company in the IBC method , and if a policy owner calls the insurance company they will know what I’m talking about regarding the IBC method.

    What is the name of the company? In addition, I’m in CA and not NYC can you help, or should I contact a trained Nash advisor in CA?


    Tony Luisi

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