What are the advantages of Becoming your Own Banker?
Many of us have questions on becoming the Banker with Whole Life Insurance Banking. What does that even mean? A Whole Life Insurance policy will have a cash value you can borrow against. Another advantage of this type of policy is the payment of dividends by many insurers. Dividends are generally taxed as gains; in the case of life insurance, however, the IRS treats dividends as a return of premium and they are not taxable. Meaning this money is Tax FREE.
Other benefits of being your own banker with a Whole Life insurance Policy include the fact the rate you pay will never increase. This is for your whole life and you are safely locked into a price your agreed on when you set up a policy.
Becoming your own banker will also allow access to your cash value at any age, at any time, for any reason. This is a huge benefit of whole life policies compared to 401(k)s and IRAs, which impose multiple obstacles if you want to access your cash before retirement, and penalize you if the funds you borrow from them are not paid back by a certain time and at a certain interest rate. No such obstacles exist with a whole-life policy. So leave your cash in the policy if you wish, or borrow it back out and use it, the choice is yours.