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 · 14 Comments
Tags: , , , , , , , , ,  · Posted in: BANKING with INSURANCE, Which Insurance co. is best for Banking?

14 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.

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