Many individuals wonder whether or not infinite banking is truly a scam. Well the short answer is yes, it’s not a scam at all. Instead, it’s simply an innovative idea. Too often see individuals confused with universal life insurance, in particular dividend paying universal life insurance. It’s easy to understand why this could be the case given the recent developments regarding universal and whole life coverage.
Now let’s consider how you can use your interest earnings to obtain a tax-free growth and retirement advantage that far outweigh any advantages offered by banks and other financial institutions. In essence, this is achieved by diversifying your investments and getting into an “infinite banking” plan. How does one go about obtaining the kind of tax-free growth that is possible through this type of diversification? This is where the concept of an “infinite banking” plan comes into play. Find out more about Paradigm Life on this page.
The major advantage of using your interest income to invest in an “infinite banking” plan is the tax-free death benefit. Most banks and other financial institutions cap the amount of interest that you can earn against your savings account at a certain level. While this may be prudent in terms of limiting your risk, there are plenty of good reasons why you should never limit yourself to one kind of investment. Some investments offer better tax advantages than others. You will also find that whole life policies often offer a much greater tax-free death benefit than do most other options.
By diversifying your investments you essentially are putting more money back into the economy, creating jobs, and benefiting everyone. The tax-free growth advantage that you receive from an investment account like a universal or whole life policy is another great reason to incorporate this type of investment strategy into your investing strategy. With the right combination of investments you can turn any investment into a tax deferred profit which will allow you to save money over time.
One of the major problems with many forms of permanent income investment is creditor protection. Creditor protection can easily exceed the cash value of any given investment plan and create a situation in which you have lost a large chunk of your profit. With an investment account like a permanent annuity, the investor rarely faces creditor protection concerns as long as the policy is in force. However, with some other forms of permanent income plans, the investor can run into problems if creditor protection becomes a significant concern. In order to solve this problem, permanent annuity providers include a feature called “creditor protection” in their plans. Find out more about these strategies at https://paradigmlife.net/blog/understanding-the-basics-of-infinite-banking/.
As you can see, the infinite banking concept can benefit any type of investor by providing a way to diversify their portfolio and increase their overall wealth. If you are thinking about incorporating some of this strategy into your own portfolio, be sure to talk with a qualified financial advisor so that you have a good idea of which products are best for you. With proper diversification, term life policies and whole life policies can be a great way for virtually anyone to build their nest egg without having to worry about running into serious financial trouble. You can also click on this post that has expounded more on the topic: https://en.wikipedia.org/wiki/History_of_banking.