So you’re considering starting a life insurance policy and implementing the Infinite Banking Concept in your life. Now, the question is, “How do I set up an Infinite Banking policy?”
It’s a great question!
There is so much information available on Infinite Banking, but none of it really explains the process of beginning your own life insurance policy for Infinite Banking.
Let’s look at starting your own life insurance policy for Infinite Banking with this simple, eight-step process.
Step 1: Find an Agent
Finding the right agent is the most important step. Your agent is similar to a financial planner; they become your partner and ultimately helps determine the outcome of your financial life.
Look for a few things when considering an Infinite Banking agent.
- Reliability–Find someone with a history of consistency. Infinite Banking policies take time to build and grow. You don’t want to find yourself without an agent in a few years. Find someone you can rely on who has a history with Infinite Banking.
- Experience–Setting up an Infinite Banking policy takes technical expertise. Doing it wrong creates consequences that affect you years down the road. Don’t leave this task to someone without the proper experience.
- Wisdom–You wouldn’t take a history class from someone who hasn’t studied history. Find someone who understands finances well enough to provide education and assistance with your financial goals.
- Uses the Concept–On top of all this, seek an agent with multiple whole life insurance policies and actively uses the Infinite Banking Concept as an investment strategy. You want someone who found financial success through Infinite Banking for themselves and can help you find it as well.
Don’t be afraid to pry and ask your potential agent the hard questions.
Step 2: Choose a Premium
Next, choose the premium you plan on putting into the policy.
Premium is another word for payment.
With Infinite Banking, the policy is reverse-engineered for maximum efficiency. This means, you choose the premium amount you put into the policy on a consistent basis. Then your designed policy maximizes the benefits of your selected premium payment.
Setting up the policy locks in that amount. If you don’t make the full payment into the policy annually, it won’t grow as effectively.
But you also cannot put more money into the policy than the set premium level. If you want more money in Infinite Banking, you would need a new policy.
Consider these questions about your premium:
- Do I want premium payments made monthly, quarterly, semi-annually, or annually?
- How much can I easily afford to put into the policy for the next 5-10 years?
- Do I have a lump sum to put in immediately to kick-start the policy?
These questions help you determine the amount and method of your total premium for your policy. They also give your agent the necessary information for your policy quote.
Step 3: Review the Policy Quote
Once you determine your premium and your agent has the information, they create a policy illustration, or quote, for you.
Review the quote with your agent.
Take note of:
- Guaranteed Values–These contractually guaranteed values lock in. Use the policy quote for an idea of these values and how they apply to you.
- Cash Value Growth–Understand how the policy grows over time.
- Death Benefit–This death benefit is the amount of life insurance that you will receive from the policy. It will grow with the cash value as well.
- Break-Even Timeline–This is the time required for the policy to break even. This is not a guaranteed value.
Remember that the insurance company bases non-guaranteed values on today’s current dividend extended indefinitely into the future.
Review the policy with your agent and make sure you understand everything involved in the Infinite Banking policy created for you.
Some other questions for your agent.
- What riders or extras are attached to this policy and why?
- Are we using the best insurance carrier for my situation?
- When and how can I access the cash value from my policy?
- Are there any other specifics or special items I should know?
These give you a better sense of the policy under consideration.
Step 4: Complete the Application
Once you settle on the right Infinite Banking policy and everything looks how you expected, complete the application process.
The process involves a series of medical and other questions determining your insurability.
If you are not the insured on the policy, then the insured individual will go through this process.
Your agent may complete this questionnaire themselves or utilize an assistant or another authorized individual.
It’s usually an easy process and takes very little time.
Step 5: Get Your Medical Exam
The next step of the application is receiving your medical exam. This typically involves an authorized nurse traveling to a convenient destination–like your home or workplace.
The nurse takes a blood draw and performs some other simple tests. They also ask you a series of medical questions. They then send the information and application to the underwriter at the insurance company.
Once this exam is complete, it’s time for the underwriting process.
Step 6: Wait for Underwriting Approval
Now it’s time for some waiting.
The underwriting team at the life insurance company has the information they need. They determine your insurance eligibility by reviewing your medical history.
If any questions arise, they contact you.
Otherwise, the process usually only takes a few weeks before your approval decision and final policy paperwork arrive.
Step 7: Review Your Policy
You have your approval. Great!
Now you receive your policy paperwork. Carefully review this information before making a final decision.
The policy illustration and quote you previously received likely differ from the policy you have now.
The new policy is similar, worse, or potentially better, depending on the insurability level determined by the underwriter.
There are a few different insurance rating classifications people fall into depending on health, lifestyle factors, and family history.
- Preferred Plus
- Preferred
- Standard Plus
- Standard
- Tobacco Rating
- Table Rating
Each of these affects the policy presented to you by the agent on behalf of the insurance company.
With your agent, you should review:
- Classification Rating–Check your rating and see how that affects your policy.
- Policy Illustration–Check the numbers and ensure they fit your expectations.
- Premium Amount–Make sure the premium payment is correct and you can commit to it.
Take your time and review this document carefully.
Once everything looks correct, you complete the process of setting up an Infinite Banking policy.
Step 8: Finalize and Fund Your Policy
Now, you make it official.
After reviewing the policy, you sign the final documents.
You also send in your first premium payment, funding the policy and making it official.
Although this step is serious, it’s not completely set in stone yet. Life insurance policies get a free look period, meaning you have ten or more days to change your mind if the policy isn’t what you expected or for any other reason.
Once you finish signing the paperwork and the policy is funded, congratulations! That’s the final step in setting up a life insurance policy for Infinite Banking.
See more examples of the Infinite Banking Concept in action.
Using Your Infinite Banking Policy
Of course, setting up a life insurance policy is just the beginning. Once the policy is in force and your cash value builds, you’ll want access to your capital for investment decisions.
Discuss the process of accessing capital with your agent so you can be prepared.
Also, ask your agent about leveraging your capital to build your net worth.
Infinite Banking is about growing wealth with safe, effective strategies. There really isn’t anything like it.
Learn more about our safe investing, leveraging life insurance, and other concepts.
