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OfflineJohn Galt
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Registered: 10/22/13
Posts: 5
Last seen: 9 years, 8 months
Life insurance as an investment vehicle [Re: geokills]
    #19130767 - 11/13/13 11:12 AM (10 years, 2 months ago)

This was new to me but figured we'd give it a go.

It's been called bank on yourself, infinite banking etc. those names tend to turn me off but I think the premise is sound.

Most people invest the minimum amount in life insurance if at all, but when you look at it and have it set up as an investment vehicle it makes more sense.

If you're putting money into a 401k or RRSP'S then you're gambling on the stock market, and when you go to take your money out you don't know what the taxes will be like.
Two downsides to avoid.

Insurance is a different type of money. You sign a contract and they have to guarantee your death benefit. They make sure it goes up, and compounds on its way.

It has to be set up correctly through a mutual insurance company
Instead pay your premiums monthly which adds to your equity and death benefit.
Through a mutual insurance company, a dividend is paid which contributes to both your equity and death benefit.
Then you can loan against your policy to make major purchases and essentially you're paying the interest back to your fund/policy rather than the bank.
And when you wish to retire, you loan against your equity for living expenses (so its not taxable income) and let your death benefit pay it back. Golden.

It's a long term strategy to be sure. But it makes more sense to me than gambling on stocks and getting in bed with the government through RRSP's.

Anyone familiar with this? Am I understanding it right? Did I miss key points?


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