What Is a "Life Bank" and Why Do You Need One?

A “life bank” is a properly structure whole life insurance policy purchased from a dividend-paying life insurance company.
Here are the 6 main benefits to having one:  
1. A gigantic death benefit for your family.  A whole life insurance policy will help you create the most cash values possible, which translates into a pretty hefty death benefit. When you die, the benefit will replace your income if you die too soon. The death benefit will provide college education for your children. And the death benefit will leave an amazing legacy for your loved ones. To purchase a whole life insurance policy you must learn to control your spending to create surplus.  When you are confident you can save money on a predictable basis, then place this surplus into a properly structured whole life policy so as to create the most cash values possible.  While this death benefit I’ve been going on and on about is very important, for the purpose of this discussion, I want to emphasize the living portion of a whole life policy more, so now onto more of the living benefits of a “life bank.”
2. You can use the cash value of the policy to pay off all consumer debt. This will get you quickly out of the debt that can cost you the most and prevent you from taking advantage of other opportunities that can come your way. Once debt is paid off, you should consider using the cash value to start a small business that will help create passive income you can use to fund retirement. If you aren’t the kind of person to strike out on your own, that’s okay.  But if you have any interest is creating a small business and making additional income, then cash values can act as the seed-bed for this purpose.
3.  A properly structured whole life policy has no tax liability.
4. Its cash values are extremely safe, while generating an average of 4% guaranteed interest year after year. While the dividends themselves are not guaranteed, once paid, they become
guaranteed as they flow into the cash values of paid-up additions. Paid-up additions are a type of rider on your insurance policy. This rider lets you increase the policy’s death and living benefit by increasing its cash value; it can earn dividends, meaning its value compounds over time.
5. All through the years you can use the money as needed for your money-in-motion purposes. Whole life can be used to recapture all principal and interest payments on any kind of debt, personal or business. Recapturing this expense is putting your money in motion to make more money and is worth far more than any “rate of return” from a bank or the stock market. It can be worth greater than the “match” from an employer’s sponsored 401(k) contribution.
6. In retirement, dip into your “life bank” and live on the tax-free income the policy provides, or, live on the passive income you have created from the funds that were available to you through your whole life policy I have outlined above.
At the end of your life, after using all of these living benefits, you will still be able to leave a tax-free legacy of great value to your family through the paid-up additional life insurance that goes along for the ride, even after your death.
When you see a properly structured whole life policy in operation, you will start to understand its power to create a life bank you can use now, and a “bank” for your family after you die.
For more information about how to structure a whole life insurance policy, contact me: peter@moneymastery.com.