E98: How to Make the Best Infinite Banking Partner Choice

In this episode, we will discuss the criteria you should use when deciding which company is best for practicing Infinite Banking. We’ll also discuss why life insurance policy illustrations can be deceptive and the biggest determining factor in your success.

There are many questions people have when they first start with IBC. The big one is a direct look at numbers. However, the numbers alone do not show the full picture. It may sound counter interruptive, but we’ll break it down for you in this episode.

Topics Discussed:

  • The most common questions folks new to infinite banking ask
  • The counter interruptive perspective for starting out
  • Things to look for beyond the pure numbers when evaluating
  • Reviewing an insurance company’s longevity
  • Determining the insurance company’s preference for and understanding of infinite banking
  • The unexpected (yet consistent) problems that can arise from working with a company unfamiliar with IBC
  • What to look for, and watch out for, when picking the right agent

Episode Resources:


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Podcast transcript for episode 99: Best Infinite Banking Partner Choice

Announcer: In this episode, we will discuss the criteria you should use when deciding which company is best for practicing Infinite Banking. We’ll also discuss why life insurance policy illustrations can be deceptive. And what will be the biggest determining factor in your success as an infinite banker?

Nate: She’s Holly and she helps people find financial freedom.

Holly: He’s Nate. He makes sense out of money. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered.

Nate: All right. Well, today we’re going to talk about something that comes up really often, Holly. When we’re meeting with people, assuming you’ve been listening to this podcast for a while, you’re understanding our philosophy with what we believe money should be doing in your life, especially with the power of the Infinite Banking concept. The natural trajectory, Holly, is to come in and talk to us and say, “Which companies do you use? Are they direct or non-direct recognition? Show me the numbers. I’m a numbers guy. I like to see the numbers.” And we hear all of these things, but most of it is just noise. In other words, if you understand the big picture, the details will take care of themselves. It’s difficult to judge the Infinite Banking concept just with a wall of numbers on a page, if that makes sense. So that’s where we’re going to dive in today with some of those questions, Holly.

Holly: Yeah. And I think, Nate, part of the reason why is a lot of times, even as an insurance agent, it’s “Well, which is the best company?” And what might be the best company today doesn’t mean that it’ll be the best company in the future. We can’t predict that. But I think that the reason we really want to address it is that you really, when you’re thinking about working with the insurance company, it’s not just the numbers that matter. There are other parts to an insurance company that you really want to look at and evaluate as you’re moving forward, such as, is it a highly rated company? What is its rating in regards to how strong of a company it is compared to other ones?

Nate: So when we’re talking about which insurance company do you use, there’s actually a lot of companies that work really great. And there’s not just one that’s better than another, no matter what you read online or these other things, that the key when you’re deciding which insurance company to use, they’ve got to be an A rated company. You don’t want to go work with some crappy little company that hasn’t been around for a while. So you want a highly rated company, one that’s been around since the 1800s you would hope, pay dividends every year, since the 1800s. That’s a good strong company.

But also Holly, you want that company to be pro Infinite Banking or at least Infinite Banking friendly. You want to work with a company that understands what we’re trying to do and has given their stamp of approval, at least tentatively given their stamp of approval for what we’re trying to accomplish, because you and I have both been a part of working with insurance companies who are not IBC friendly, and that is not fun at all.

Holly: It is not fun. No. Or when you started working, maybe they were more IBC friendly and over time they’ve become less IBC friendly.

Nate: Yeah. And it’s taking longer and longer to get policy loans. And their service department is overwhelmed, that they’re not used to it or whatever it is that causes problems. And then suddenly, we thought it was going to be a good fit. And it’s not. You’ve learned some things with getting some arrows in your back, who’s going to do it the way you want it to be done. As a client, we want fast turnaround. We want things to be done quickly. We want an efficient company to work with. And so it’s really important that they are ready for it, because it’s true that we’re going to have more policy loans and the average Joes, we’re going to be using the money. So we got to make sure that they’re okay with that upfront. So some companies even go to Nelson Nash’s think tank, the Nelson Nash Institute Think Tank and put up a booth there. And you can tell those companies are ready for this type of business. And that’s certainly a good thing.

Holly: And I think the reason we’re emphasizing that is there are some insurance companies that are great companies. They are not pro IBC, or they’re not really for IBC, so it’d be Infinite Banking Concept. So it becomes really difficult if you have a policy working with that company, because this is not something that they are promoting, nor do they really want their customers participating.

Nate: The entrance points are very limited on what customers can do, because you have a contractual right to do many things like policy loans and certain things like that in your policy contract. But the biggest issue is that they can fire the agent. So I won’t name any names, but there’s some big companies out there who, if they find out that you’re really encouraging people to take out policy loans and you’re doing the same thing, they’ll just fire you. They don’t want to deal with it for whatever reason. You can’t really practice even the banking there. And some agents try to, but then they’ll always kind of push their clients away from using policies. They’ll just use them as savings accounts and you’re not really doing banking with them. So you got to make sure their providing. And one little caveat is you want to make sure that you can design the policy in an Infinite Banking way.

You got to be able to design the policy to maximize cash value. And there’s a few companies out there who don’t really have a good paid up additions rider, which is really important for building a good policy. The PUA rider is either very inflexible, it’s not very flexible at all for how would we put money in. And some companies don’t even really have one. And so you know those companies are not really the ones you want. There’s so many well-rated, been around for a time, pro IBC, got the things we want, that at the end of the day, we got to stop caring so much about who the insurance company is. It’s not the end all be all for this. And we’re going to get into that a little bit more here as well.

But at the end of the day, if you’re with a good company, you’re going to be fine. Stop getting stuck with analyzing which one’s the best, because it is impossible to decide which company is going to be the best for your policy and its life over the next 50 years of living. It’s not going to happen today on one little quick snapshot of what’s going on in the insurance world today.

Holly: I think it’s just important, what you said, you do want to make sure it has that paid up addition rider, they’re pro IBC. They’ve been around for a long time. They’re a good standing company with a high rating. And after that, then it really falls into, we get the question of which is the best illustration. And really with any illustration, if you are a good or competent agent, you can design an illustration that looks good on paper and explain it, that is the end all be all and it’s going to be the best illustration ever because that’s the last person you talked to.

Nate: Exactly. You run around, show me the numbers. I’m a numbers guy. Send me some illustrations. And it is a little tiring to hear that because what are you going to get from this wall of numbers? Is that illustration Infinite Banking? How much weight should we be putting on a policy illustration? The thing about the policy illustration is it’s only valid the day you send it. And as soon as the next year has turned over, all the numbers could just be projected incorrectly and so forth. Exactly right, Holly, we got to stop focusing so much on what the policy illustration and then comparing… We’ll talk to some clients who go to talk to one advisor and talk to us and they’re looking for who’s got the best illustration or whatever it is.

You got to decide who you want to work with. Who’s going to help you achieve what you want to achieve? That may be us. That may be somebody else, but just staring at a wall of numbers to see which one produces the best cash value on paper, there’s so many flaws with that thinking Holly, because these illustrations… If we want to figure out who’s got the best illustration today, we can go run numbers with all these different insurance companies. We say, “Well, this one produces the best result as of today.” Well, if we did that same experiment 10 years ago, guess what? The order of those insurance companies and who produced the best illustration would be different 10 years ago. And if we did 10 years before that it would have been different. And 10 years from now, it’s going to be different.

So all that to say, the illustration is a snapshot in time right now, but these insurance companies are investing in practically all the same thing. The actuarial science is the same across the board. Can one insurance company produce better results over a 50 year timeframe than the other? You might have little differences at various points in time, but it’s a shame that some people will run and do illustrations and try to do magic with the numbers and the term riders on there and do these other things. And it just adds all this complexity that confuses the numbers. And you question the integrity of the policy at some point like, hey, is this a Nelson Nash Infinite Banking policy, or is this some sort of weird schemey thing? That’s been my issue with it.

Announcer: Are you still stuck in insecurity and uncertainty? Do you want to feel like a financial genius and confident about your future? Holly and Nate have prepared something exclusively for Dollars and Nonsense listeners. It’s called the Secret Banking Masterclass. You can gain free access to this course by visiting livingwealth.com/secretbanking. That’s secretbanking, all one word. The course will share with you how the conventional system stacks the deck against you, and exactly how to break free from their system. We believe in challenging the status quo. We believe in defying conventional wealth tools while maintaining traditional values. After all, most of those conventional tools only ever seem to make someone else on the inner circle rich. Visit livingwealth.com/secretbanking. That’s secretbanking, all one word. Ease your worry and start your journey towards security today. Visit livingwealth.com/secretbanking. Now back to the great episode with Nate and Holly.

Holly: It’s the design of the policy that the illustration supports. Okay. It’s a supporting factor in how the actual policy was designed. And the policy should be designed to be a banking policy. And there are so many different thoughts and theories out there as to the actual design of a policy. And yet what Nate’s talking about, some that are really crazy in our viewpoint or Nelson doesn’t even touch on really, who was the founder of it. If you break it down and you look at it, it really isn’t a banking policy. It might’ve given you what you wanted initially, but long term, it’s not a banking policy and it’s not-

Nate: Long term, you might be in danger of [mecking 00:11:28]. You might be able to have limited PAYE contribution. I mean, there’s so many things that people are trying to do, and they’re just using it as a marketing piece. That’s my issue with it. It’s not a real plan. It just, hey, we’re going to try to do what the consumer thinks they want and market it so we can just sell a policy and go on our merry way. The key is as a professional, you don’t just do what the client wants. We’re not order takers, Holly. You either want our professional opinion or you don’t. And if you already have an idea of what you want, that’s great. Go find somebody who’s just willing to take the order. But in reality, you want somebody who will tell you what they feel is best for you to do. And that’s what we hope to do. I’m not trying to tickle someone’s ears with some illustration that’s bogus.

Holly: And I think Nate, it’s not just the tickling the ears, honestly. Even Nate and I, the reason we design a policy the way we design it is for maximum cash for you long term. We want your dollar to work for you, not just today, but in the future. And we want you to have a policy that you can continue to use for banking, because life isn’t a hundred yard dash. It is a marathon. And it’s not how quickly you get to the finish line. It’s how you start the race in order to be able to finish it. If you start the race ahead and you can’t finish it, then it didn’t do you any good to have that policy to begin with.

Nate: Exactly right. And the illustration matter to some degree. I know that we can gather some things. I’m not against illustrations or anything like that. There’s some things you can really gather, but at the end of the day, you have to come to grips that the illustration is essentially worthless when you’re trying to compare one company to the next, because it’s dealing over a projection of the current scale of dividends and so forth. I don’t want to get into a huge in-depth discussion of it right here today. I guess my suggestion, Holly, and that’s where I’m going with this, is that in reality, when you do Infinite Banking, if you can do it successfully, the chances that you own just one policy over the lifetime of your banking career is extremely small. If you’re going to do it successfully, just as Nelson Nash said, the creator of this concept, it’s going to need to be a system of policies.

And our suggestion to you is don’t just have a policy with just one company. You should have policies with multiple companies, because we don’t know the future. It’s impossible to tell which policy will really perform the best, when you include the dividends and so forth, because dividends go up and down over time. As I said, the companies that were paying the highest dividends 10 years ago are no longer doing it today. And it will be different later. We don’t know. So what you should do is, as we already said, choose a good company. We’ve already talked about that criteria and then have policies over time with multiple companies. I think that is the wisest decision to go for it.

The last point, and this is probably the most important point, is the real determining factor in your success is you, not the insurance company you happen to buy a policy from, and that catch some people by surprise. They think that if I don’t have the best company… I know some people who’ve got policies that weren’t even designed for banking when they bought them and they’ve owned them for a while. And then they learned about banking. They started using them and those policies look amazing. Has nothing to do with how it was initially designed or the illustration or who the company was. It was how they used it. So how you use it will be the greatest determining factor in your success.

Holly: And that really is key, Nate, is that you’re the one that is using this policy that we’re training, educating you on how to use it and how to not just buy a policy, but how to actually implement the Infinite Banking process. And so the key factor, like Nate said, it’s not just the company, it is multiple companies, but it also is who you are and how you’re going to use this policy and what works best for you.

Nate: Yeah. If you’re going to buy a policy and just sit on the money and you just own one, and you’re just saving a little bit of your money in there, and you’re too afraid to start new policies and you never use them. I mean, if you’re just not really doing Infinite Banking, it just doesn’t matter which company you had. You’re not going to be as successful as the people who are actually doing the banking, who are pushing it, who are using their policies, who are expanding the system, who are capitalizing new ones. They are just simply going to build more wealth. You could have the best company, the best policy in the world, if there was such a thing, and a guy with some lousy company who’s actually doing the concept and isn’t living in fear and is pushing the boundaries and is working with the policies, expanding, he’s just going to end up with more money.

You guys can make the same amount of money. You guys can have the same socioeconomic status. You could be doing the same things. He or she is going to produce more wealth by how they did it, had nothing to do with the policy illustration of the day of the sale or which insurance company they used. You are such an important factor in your success.

Holly: It’s not the insurance company today. It’s the insurance company today, tomorrow, and in the future, multiple policies. But if you can see that you are the driving force behind your policy and your Infinite Banking concept, that’s what is going to change everything in your mindset about what company do I work with.

Nate: Exactly. So to wrap up today, as we were talking about, which insurance company you want to work with, there’s just probably five, six, seven companies that really just work great. You got to get past that. If they’re highly rated, they’ve been around for a while, they’re pro IBC, they got the design features that you want, then suddenly that’s a great company and you can’t put too much weight on the illustrations. They don’t mean much long term. You can see how a policy works. You can see some inner workings in there, but when you’re trying to compare one illustration to another and get something real from that, that’s just not going to happen. There’s nothing real you can get from that. There’s just too much variation in the dividends and what’s going on today and so forth.

That’s why it’s best to have policies with multiple companies as you expand the system. And always understand that how you use the policies will be the most important factor in determining your success. It has less to do with the insurance coming and more to do with you. Are you somebody who can practice this system and build wealth with it? Or are you just looking for a little safe savings method? If you are, that’s fine, but you’re leaving a lot of money on the table. It’s time to kind of get a little quick kick to the keister and move some money and do real banking with it. Any last thoughts, Holly, before we close it down?

Holly: No, I think that’s it.

Nate: All right. And always remember, if you follow the herd, you will be slaughtered.

Holly: For free transcripts and resources, please visit livingwealth.com/e98.

Announcer: Dollars and Nonsense podcast listeners, one more thing before you go. Ease your worry and start your journey towards security today. Visit livingwealth.com/secretbanking. You’ll gain instant free access to the special one hour course Holly and Nate made for you. Again, that’s livingwealth.com/secretbanking.