185. What is an Infinite Banking Policy?

[00:00:00] Speaker A: You are listening to the wealth without Bay street podcast, a canadian guide to building dependable wealth. Join your hosts, Richard Canfield and Jason Lowe as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future that you can bank on. [00:00:22] Speaker B: Get our simple seven step guide to becoming your own banker. It's easy. Head over to Sevensteps CA and learn exactly the learning process required for you to implement this amazing strategy into your financial life. That's Sevensteps ca. [00:00:38] Speaker C: Rich, today we're going to talk about. [00:00:43] Speaker D: What is an infinite banking policy. [00:00:46] Speaker C: The reason is that there's a lot of marketing out there and a lot of people using that language. [00:00:59] Speaker D: Hey, you can contact us to get. [00:01:02] Speaker C: Your the infinite banking concept. [00:01:05] Speaker D: Rich, what is an infinite banking policy? [00:01:10] Speaker B: Three words put together that never should be. [00:01:15] Speaker D: It doesn't exist. [00:01:16] Speaker C: There's no such thing. [00:01:18] Speaker D: There's no such thing. And I was just sharing a story with you. Prior to hitting the record button, I messaged a colleague, someone who I care for and who want to see continue, have great success and untapped success, wish their team amazing abundance, but had to just share that feedback to say, I. [00:01:39] Speaker C: Think it's really important that we're not using language like that because a, no such product exists. [00:01:48] Speaker B: No product that you can get like that. [00:01:49] Speaker D: The infinite banking concept is a process. [00:01:51] Speaker C: It's not a product. B, you can put yourself in the shoes of the life insurance industry and you can just imagine the questions around the boardroom table going, does anybody know what an the, the infinite banking concept? We certainly don't sell them here. [00:02:14] Speaker D: And we know the nuances. As authorized infinite banking practitioners, we know the nuances. The insurance industry and the general public do not know those nuances. And so it is so important for. [00:02:29] Speaker C: Us to just emphasize that to anyone who's watching and listening when you're consuming content out there on the Internet about. [00:02:38] Speaker D: The process of becoming your own banker, the, the infinite banking concept, you're hearing. [00:02:43] Speaker C: People say the words, get your infinite banking policy. Now, you know firsthand from the both. [00:02:51] Speaker D: Of us who have been practicing this process and specializing in this process since. [00:02:56] Speaker C: 2008, that no such policy exists. [00:03:01] Speaker B: So, a couple of funny things I want to tie into here. I mean, obviously the statement is bold and clear, but I've got Nelson's book in front of me, always having nearby very first page, page three introduction. Becoming your own banker. The, the, the, the infinite banking concept for a ten hour course of instruction about the power of dividend paying whole life insurance. Not the power of an infinite banking style policy or an infinite banking policy. The power of dividend paying whole life insurance. It is not a sales tool for life insurance agent agents. It is education that the life insurance industry, so he's painting the industry with a big paintbrush. Should have taught during the last 200 years, unfortunately, the industry has concentrated on the death benefit qualities of the contract. [00:03:48] Speaker C: And has neglected to adequately describe the. [00:03:51] Speaker B: Financing capabilities that it presents for the policy owners. Ironically, life insurance companies must put premium income to work in various investments in order to pay the death claims. So Nelson says it right in the first paragraph. And further to that, recently we put together a twelve step getting started guide that we like our clients to go through when they come aboard and they start working with our team. It recommends very specific items to do as far as setting up the policy, paying your premium, online banking related activities, as well as a list of video content that we want people to go through for the first 90 days, the first six months. And then there's some optional stuff in there, a recommended time commitment to your learning, et cetera. At the very bottom of that document is do's and don'ts. And you know what? The first, I'm going to read the very first don't to you here, Jay, it says, do not refer to your whole life policy as an the, the infinite banking concept. A whole life policy, plain and simple. Infinite bank is a concept, not a product. It is a way you do things in your life. An insurance policy is simply a policy that allows you to have more control over how you do things in your financial life. [00:05:04] Speaker D: That's right. [00:05:05] Speaker C: Boom. [00:05:05] Speaker B: It's right there. [00:05:06] Speaker D: So great way of putting it. [00:05:08] Speaker B: Not only do we suggest and heavily recommend and would extremely encourage anyone who is in an advisory role talking about this concept. First of all, you should be an authorized infinite banking practitioner with the Nelson Ash Institute. If you're not, please go to the institute, apply to see if they'll accept you into the program. You should also, if you're a member of that organization, you should be attending the annual think tank conference. Highly recommend that it's an amazing opportunity to meet and connect with other people. But if you're trying to explain this concept and you're not a using the source material, Nelson's book, and you're using language. So the idea or the statement of infinite banking policy is the brain's way of shortcutting information. And I don't think people saying that are doing it in a way where they're trying to, at least in general, I don't think people are doing it where they're trying to mislead the general public. They're just trying to look for a way to simplify or shortcut the information. And sometimes it's cooler or maybe nicer to say than saying dividend paying whole life insurance. [00:06:17] Speaker D: It's sensationalizing. [00:06:19] Speaker B: It is. [00:06:20] Speaker D: It's completely unnecessary. And you're right, it's not questioning anyone or any organization's intention, right. Because people who truly understand the process really want to serve the people. They really want to do great work and serve the people. So the last thing we want to do is put ourselves in a situation. [00:06:41] Speaker C: Where you've got insurance carriers, we need them on our side. [00:06:48] Speaker D: And because they provide great tools. [00:06:52] Speaker C: And the moment that they won't understand it, and you start referring to a policy as a banking policy, now you've got the banking industry looking at it. [00:07:06] Speaker D: And going, what is that? First and foremost, and then only to come to realize that it doesn't exist. [00:07:12] Speaker C: Nelson told us all the time, infinite. [00:07:16] Speaker D: Banking concepts does not need to be sensationalized. It is ridiculously simple. [00:07:21] Speaker C: And that the tool for the job. [00:07:24] Speaker D: Is participating dividend paying whole life insurance. [00:07:28] Speaker C: And that the policy owner needs to understand that's what you're purchasing. [00:07:38] Speaker B: If you. [00:07:38] Speaker D: Want to implement the process of becoming your own banker. [00:07:41] Speaker C: The infinite banking concept, the tool is. [00:07:46] Speaker D: The life insurance policy, or ideally a system of policies. [00:07:50] Speaker C: But the distinction and how we describe things, Nelson talked about all the time, correctly classifying things. To say that a life insurance policy is somehow putting on an infinite banking. [00:08:08] Speaker D: Wetsuit and saying, now I'm an infinite banking policy, it's just not accurate, it's untrue. I hope that a colleague would reach out to me, right? If I was saying something, I hope that a colleague would be courageous enough, right, just to say, hey, you know what? I just want to bring this to your attention. And it's coming from a place of care and respect. [00:08:33] Speaker B: And in the past, I'm sure there's been a lot of things that I've said that maybe were certainly not as accurate as they could have been around the process. Or some of it might have been limited to my thinking at the time. It could have been limited to maybe how much I was reading Nelson's book. Who knows? And so we're all growing, we're all improving. And so when we recognize that we have an opportunity to create clarity, we should state that clarity, and that's purpose of what we're doing here. And we also want to make sure that for our clients, those that we already serve and those that we wish to serve in the future, that they recognize and understand that the language around this is very important. And I'll give you a couple of reasons for that. So just imagine for a moment there's hundreds of advisors out in the marketplace and they're all wonderful, great, well intentioned people and they're out communicating about this process. Or they're claiming to communicate about this process. [00:09:34] Speaker C: Yeah. [00:09:34] Speaker B: And they're telling their clients about infinite banking, this and that and your infinite banking. They state your infinite banking policy in meetings and in their education process and so forth. Well, now the client needs to call into the life carrier to inquire about their contract. Their contract is with the life insurance company, it's not with the advisor. [00:09:56] Speaker C: That's right. [00:09:57] Speaker B: And they, as a policy owner, not only do they have the right, they should be encouraged to exercise their right as a policy owner to communicate directly with the life insurance carrier because absolutely, that's who their relationship is, was contractually speaking. [00:10:11] Speaker C: Yeah. [00:10:11] Speaker B: And so if they call in and they are speaking to whoever the nice person is, that is the next in the queue to receive that call. And they say, oh yeah, I'm just calling about my infinite banking policy. [00:10:23] Speaker C: Well, the life carrier, the person on. [00:10:26] Speaker B: The other line is like, I don't know what that is. We don't sell one of those. What is that? And they're going to make a note in the file about, oh, we're receiving these calls and then they're going to have a meeting with their upper management. Oh, we keep getting calls about infinite banking policies. Do we sell those? What is that all about? And then that's going to go to some compliance department and some other conversations are going to take, you know, there's the statement that one rotten Apple can upset the whole Apple card. Is it something to that effect? So it's not that we're doing anything, know that people are doing that intentionally, but they're not looking at from a long term perspective, what is the implication and the impact of that, I guess for lack of better terminology, lazy way of explaining what's actually going on. [00:11:09] Speaker C: Yeah. [00:11:10] Speaker B: There is no infinite banking policy. [00:11:12] Speaker C: There is only an insurance contract, dividend. [00:11:16] Speaker B: Paying, participating whole life insurance. And an advisor could design and work with hand in hand with a client to construct such a policy in the. [00:11:28] Speaker C: Way that it is very functional for. [00:11:31] Speaker B: The purpose of that individual policy owner to utilize it in such a way that they can incorporate the process of. [00:11:39] Speaker C: Becoming their own banker. [00:11:41] Speaker E: Become your own banker and take back control over your financial life. Hey, is this even possible? You may be asking, can I even do this? Well, you better believe it. In fact, it's easy to get going. So easy that we put together a free report. Seven simple steps to becoming your own banker. Download it right now. Go to Sevensteps ca. That's seven steps ca. Now let's get back to the episode. [00:12:11] Speaker D: Again, it goes back to the ridiculous simplicity. You have a unilateral binding contract that. [00:12:16] Speaker C: Has a loan provision. That's it. Explain it clearly to your prospective client or to your existing client to be able to say, here's the distinction. [00:12:31] Speaker D: Unilateral binding contract. [00:12:33] Speaker C: You pay premium. In exchange for that premium, the insurance. [00:12:37] Speaker D: Company is promising to fulfill all of the guarantees embedded in that contract that. [00:12:42] Speaker C: Are designed to protect you. [00:12:44] Speaker D: One of those provisions is that you can request a policy loan from the life insurance company at any time, for any purpose. [00:12:51] Speaker C: You're describing the attributes of a contract. What you do with the life insurance company's money is set about controlling how. [00:13:01] Speaker D: You finance all the things that you need throughout your lifetime. That's implementing a process which is independent. [00:13:07] Speaker B: Of the contract itself or any communication with the life company at all. [00:13:12] Speaker D: Because process is not apparent, you do with the money. [00:13:15] Speaker C: And so when the life insurance companies want to better understand it, and it's. [00:13:22] Speaker D: Explained, where there is a very clear. [00:13:24] Speaker C: Distinction, the life insurance companies get it because they understand. Oh, okay. [00:13:31] Speaker D: Yeah, we understand that you've been through a process. You've established a need. The death benefit actually has merit. The client understands what exactly it is they own. [00:13:42] Speaker C: And then outside of that, now that you have a client advisor relationship, you're. [00:13:48] Speaker D: Now coaching your client on how to implement a process. And through the implementation of that process. [00:13:54] Speaker C: The client is going to exercise their. [00:13:57] Speaker D: Contractual authority to request a policy loan periodically from the life insurance company. [00:14:02] Speaker C: Great, we get it. But when we start to sensationalize it, have your dollar doing two jobs at. [00:14:12] Speaker D: Once, and get rich buying cars and buy your infinite banking policy from me and all that stuff. [00:14:19] Speaker C: That's just sensationalizing it. [00:14:21] Speaker D: And it can create a perception with. [00:14:24] Speaker C: The general public that simply isn't true. And we've just got to encourage all of our amazing colleagues in the industry. [00:14:35] Speaker D: To just rethink their thinking around that so that we can all continue to serve the people and serve them with this amazing process. [00:14:43] Speaker B: I'll take it a little bit further than that, too, because the banker. So the role or the concept of who the banker is in your life, which Nelson discusses in all of his seminars, and his book, et cetera, is that someone has to perform that function. Someone is doing it for you right now. That's true. That it can and it should be you. [00:15:06] Speaker C: That's right. [00:15:07] Speaker B: That is the person. Nelson talks about the characters in the play. And we've got lots of content about this, Jay, but the banker is the person that makes the rules. In other words, what's the payment schedule? Can you take the loan? What's the interest rate you pay it back at? What are the provisions for missed payments? Like those kind of things? So the insurance carrier is an insurance company. They provide valuable services and products for the consumer. And you acquire them as a consumer. That's right. They have jobs to do. And their job is not to Mickey Mouse. A bunch of stupid transactions that you're doing because you're trying to turn the insurance company into a brick and mortar bank. That's not correct. [00:15:56] Speaker C: Right. [00:15:56] Speaker B: You are the banker. You conduct your transactional activity the way that you see fit with your regular bank account. [00:16:03] Speaker C: Right. [00:16:04] Speaker B: You receive money from a policy loan if you request it, and then you choose how to repay it. Now, you can set that up in a very dirt simple format that limits the amount of required communication with the insurance carrier so that you're not creating a burden on the insurance carrier system. [00:16:22] Speaker C: Yeah. [00:16:23] Speaker B: If we are in a mutual company, Jay, you and I, we own a grocery store. [00:16:27] Speaker C: We want our grocery store to be profitable, don't we? [00:16:30] Speaker B: We're going to go do our shopping at the same grocery store. [00:16:32] Speaker C: Great. Yeah. [00:16:33] Speaker B: Okay. If for some reason I show up one day to the grocery store and you've just hired a whole bunch of extra warehouse people. And people. We got 14 butchers standing in the back of the grocery store waiting to cut meat that doesn't exist, you've just hired a bunch of people at random. I would probably be really curious, like, why are you increasing the expense load of our grocery store when it's not necessary? [00:16:58] Speaker C: Right. [00:16:59] Speaker B: So the insurance company has to hire people. There's great people that work there. We're really happy. We love those people. They do a great job. And every time that they do that, that's an expense to the insurance company's line of the books. So that has to be a warranted expense. Well, if they're hiring people unnecessarily because they got to deal with a bunch of Mickey Mouse stupid transaction activity that wasn't previously happening, well, that dilutes the profitability of the pool for everybody. So if you're an owner and you're thinking, like, an owner, how you communicate to the life company should represent. [00:17:32] Speaker C: Yeah, really, really good point. [00:17:34] Speaker D: And. [00:17:37] Speaker C: Firstly, on a positive note, the fact that the concept, the process is being discussed to a degree in the. [00:17:48] Speaker D: Marketplace today that you and I could have only dreamed of when we first. [00:17:52] Speaker C: Started on our journey. [00:17:53] Speaker B: Right? Because everybody trying to get an insurance company to even take a call to. [00:17:57] Speaker D: Even discuss what, oh, my God. [00:17:59] Speaker C: And people thought that we were, like, clinically insane for. [00:18:05] Speaker D: Trying to share this concept and process. And thank goodness you've got an ever increasing number of advisors who want to embrace this. Everyone's motivations being their own, teach their own, that's fine. But the fact that we have more and more advisors embracing this is a great thing. [00:18:27] Speaker C: And we used to think in our earliest days in our journey, wow, we got to figure out a way, uh. [00:18:40] Speaker D: Corner the market or whatever it was, and it was just, oh, my God, it was such a stupid train of. [00:18:47] Speaker C: Thought because I'll never forget going to. And again, I have to give. Shout out to Dan Sullivan. [00:18:56] Speaker D: Shout out to strategic coach and the amazing team there. [00:18:59] Speaker C: I'll never forget. October of 2018, Toronto, Ontario strategic coach office. Dan Sullivan says, you don't have to. [00:19:10] Speaker D: Own the ocean in order to sail on it. It was just like, know, because it. [00:19:19] Speaker C: Was just wanting to kind of, uh. [00:19:25] Speaker D: I don't know. All my cells are hardwired. [00:19:28] Speaker C: As a fierce competitor, I'd love to compete. [00:19:32] Speaker D: And Dan was like, well, if you start. Because him and Nelson would have been such amazing kindred spirits, he said, well, if you start to think collaboratively and stop thinking competitively, collaboration opportunities will begin to appear everywhere. [00:19:48] Speaker C: And I was like, what was that. [00:19:53] Speaker D: That you just said? Because I just opened up a whole. [00:19:57] Speaker C: New pathway of thinking, and I've got. [00:20:00] Speaker D: To really give him credit to that. [00:20:01] Speaker C: And so I love the fact that. [00:20:03] Speaker D: More advisors are talking about this and more advisors are educating their clients and getting Nelson's book in their hands. And we have amazing connections with advisors who reach out to us all the. [00:20:14] Speaker C: Time, say, hey, we listen to your. [00:20:17] Speaker D: Content, and it's great if you're an advisor listening to this, and our content. [00:20:21] Speaker C: Has had a positive. [00:20:23] Speaker D: Yeah, and our content has had a positive impact on you and your practice. [00:20:27] Speaker C: And that's great. That means that that part of our. [00:20:32] Speaker D: Mission is getting accomplished. And now that we're a managing general. [00:20:35] Speaker C: Agency and opening up the gate to. [00:20:39] Speaker D: Affiliate with a lot of really amazing. [00:20:42] Speaker C: People, I shared this in our kickoff. [00:20:45] Speaker D: Q three kickoff, we're going to have. [00:20:46] Speaker C: Two lineups out the door. We've already got one. [00:20:49] Speaker D: And that lineup is of people who. [00:20:51] Speaker C: Want to be clients. And the other lineup is going to. [00:20:54] Speaker D: Be a lineup of advisors who want. [00:20:56] Speaker C: To affiliate with an organization that specializes. [00:21:00] Speaker D: In the implementation of this process and has been doing so since inception. And so who do you want to be affiliated with, the generalist or the specialist? [00:21:11] Speaker C: I can tell you that when you. [00:21:12] Speaker D: Look at your performance and your, your income earning potential and all these other. [00:21:18] Speaker C: Things, it's going to look much different in the generalist column than the specialist column. [00:21:26] Speaker B: Do you remember how you used to. [00:21:29] Speaker C: Have to send post dated checks in. [00:21:32] Speaker B: For your loan repayments and stuff? I just think it's so funny because. [00:21:39] Speaker D: You had to call to get the policy values. [00:21:41] Speaker B: Yeah. There wasn't an online way to log in and at one point the advisor had to go and learn everything, figure everything out for you. Everything was gated from the client, the client experience. And it was so frustrating and archaic. And not to say that there's not still some of that going on, certainly with many carriers that is the case. But yeah, in general, just the world that we have the ability to play in today and the functionality that's available for people who want to embrace this concept. In comparison to where we became aware of it. And then in comparison to Nelson's book published in the year 2000, what do you think they were? What was Nelson doing? Nelson was doing everything by check, I guarantee you guarantee by check. And he was totally fine and happy and everything just worked fine. And he didn't complain about the fact that he didn't have an online this or didn't have that. None of that made any damn bit of difference. Nelson would have said that's majoring in the minors. But just to have a reference point of in a 23 year period of time, how much positive change has been created, and even just in the experience of time since I first got this book in 2009 to today, what we can do, what we understand we can do, what insurance companies have modified, and I guess for lack of better terms, we'll say improved upon the continued improvement. I mean, a lot of investments going into things like technology, going from a place where you used to have to print, you couldn't even use docusign type technology to do your loan requests. You had to print, scan everything. We had people, some people were sending in their stuff by mail with a good old stamp, like all the things that have changed just in our period of time of doing this to today, where now I have multiple automated transactions, post dated, set up in my online banking loan repayments getting made to the life company for different things. It's been communicated one time what I want them to do with the money. I'm not burdening them with 1000 emails. I am as an advisor, as a, you know, now there's an ability know, we've been testing about being able to actually engage with taking policy loan digitally now without having to fill in Mickey Mouse paperwork. [00:24:04] Speaker D: And that's an exclusive test with ascendant financial in the country. [00:24:08] Speaker B: By the way, the feedback has been quite proud of that. We have a client focus group that we did directly with the life company sharing their experiences of what they like, what they didn't like. Life company is actually listening to those things. They're looking at making implementative changes. I mean, just the total environment is just completely changed in the ability for the consumer to be able to be the writer of their own story in relation to how they want to implement. [00:24:39] Speaker C: This process in their life all day long. [00:24:42] Speaker B: And simple things like using the right terminology of and understanding what is it. [00:24:47] Speaker C: You have correct classification, dividend paying, participating. [00:24:52] Speaker B: Whole life insurance contract. It's got a policy number. You have a life policy. This is what it is. You can take a policy loan. [00:24:59] Speaker C: Here's how you do it. [00:25:00] Speaker B: You could pay it back at your schedule. You dictate the terms at your level. You don't have to call the life company says, I've sent a loan payment in. Can you apply it? Like you just send an email, make it clear. Policy number, subject line like very simple template. Repeat, repeat, repeat, repeatable process. It does not have to be complicated. [00:25:21] Speaker C: That's exactly it. [00:25:23] Speaker D: Well said and happy that we can just get this message out there. And again, to any advisors out there. [00:25:32] Speaker C: Thank you for listening and hopefully you. [00:25:35] Speaker D: Found this helpful and clarifying as well. [00:25:37] Speaker C: And we'd certainly love to hear from you. [00:25:40] Speaker D: If you have any suggestions or if. [00:25:43] Speaker C: You disagree with what we said, connect with us. [00:25:46] Speaker D: We'd love to hear from you and we wish you every success in your. [00:25:50] Speaker C: Practice and what you're doing to serve. [00:25:53] Speaker D: The people. [00:25:56] Speaker C: In your own marketplace well. [00:25:57] Speaker B: And for our clients and the people tuning in, I would also just encourage. [00:26:02] Speaker C: Again, most times we speak to people. [00:26:05] Speaker B: And they're looking to communicate this message to friends and family and colleagues and coworkers. We love that. We encourage that and some people do an exceptional job at it. But again, you don't need to sensationalize anything either. You just communicate what you've learned, what's true for you. Again, what do you have? You don't have an infinite banking style policy you have an insurance contract. And what you can talk about, of course, is the process that you're implementing, the process of infinite banking. Of course you can discuss that. [00:26:35] Speaker C: Yeah. [00:26:35] Speaker B: But if it comes down to people asking a bunch of Mickey Mouse questions about the insurance that insurance that just make sure that you're creating a good barrier of discussion between the two different. [00:26:45] Speaker C: Segments, insurance process versus product. Great advice and to all of our viewers. [00:26:57] Speaker D: Again, this happens every time. [00:26:58] Speaker C: Credit to our amazing editing team. [00:27:02] Speaker D: Continue your journey of learning. The reason that the video, the playlist came up is because YouTube is really intelligent and has served up more of our content. [00:27:12] Speaker C: And thank you YouTube for that. Shout out to YouTube. [00:27:16] Speaker D: Stay awesome and we want you as. [00:27:20] Speaker C: The viewer to be great. Thanks for watching. Thanks for tuning in, Rich. [00:27:27] Speaker D: This was fun. [00:27:27] Speaker C: As always, thanks for listening to the. [00:27:31] Speaker B: Wealth without Bay street podcast where your wealth matters. Be sure to check out our social media channels for more great content. Hit subscribe on your favorite podcast player and be sure to rate the show. We definitely appreciate it. And don't forget to share this episode with someone you care about. Join us on the next episode where we continue to uncover the financial tools, strategies and the mindset that maximize your wealth.