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  • FIRST POST
    • Mickyfinn
    • By Mickyfinn 27th Sep 15, 10:04 PM
    • 57Posts
    • 26Thanks
    Mickyfinn
    Infinite Banking Concept Whole Life Policies
    • #1
    • 27th Sep 15, 10:04 PM
    Infinite Banking Concept Whole Life Policies 27th Sep 15 at 10:04 PM
    Hi All

    The infinite banking concept or bank on yourself was used by Walt Disney and JC Penny to borrow money from their life insurance policies. It allows you to make more interest on your money than using a bank, borrow money on favourable terms and be your own bank (google bank on yourself and watch the youtube videos also amazon book Becoming Your Own Banker R. Nelson Nash).

    Is dividend paying whole life insurance available in the UK? Has anyone successfully applied the Infinite Banking Concept in the UK? I can't find any UK information on this - perhaps Bank of Dave should be using it! If you have I'd love to hear your experience.

    All information on the Internet is US based - I know you can buy whole life, life insurance policies in the UK so I assume the concept works on this side of the pond too.

    I'd be interested in becoming my own bank by using this product - can anyone point me in the right direction? I know the insurer needs to be a mutual as opposed to one with shareholders and must pay dividends.

    Thanks

    Micky
    Property Consultant
    Birmingham, London, Brighton.
Page 1
    • dunstonh
    • By dunstonh 27th Sep 15, 10:09 PM
    • 89,883 Posts
    • 56,562 Thanks
    dunstonh
    • #2
    • 27th Sep 15, 10:09 PM
    • #2
    • 27th Sep 15, 10:09 PM
    - I know you can buy whole life, life insurance policies in the UK so I assume the concept works on this side of the pond too.
    No. Endowments ceased being retailed in the mainstream by 2004. So, hardly any left. The single premium life assurance bonds still go strong but you wouldnt borrow from them even if you could do it.

    Whole of life assurance plans have pittance as a value.

    I know the insurer needs to be a mutual
    Why? (plus good luck with finding one that offers the products).
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Mickyfinn
    • By Mickyfinn 27th Sep 15, 10:56 PM
    • 57 Posts
    • 26 Thanks
    Mickyfinn
    • #3
    • 27th Sep 15, 10:56 PM
    • #3
    • 27th Sep 15, 10:56 PM
    Thanks for your reply - the US product it is based on is called participating whole life insurance. Participating from my research is American for 'with-profits' whole life insurance.

    From my limited understanding of this concept (and watching a video on paradigmlife.net) the provider needs to be a mutual company because mutuals have no shareholders so the owners are the participating policyholders and receive a dividend.

    According to the video a mutuals loyalty is to the policyholder. They make less risky investments. A non mutual is more likely high yield high risk such as AIG that almost went out of business as they need to retain shareholders and attract new ones. Mutuals are a good choice to promote longevity of the policy.
    Property Consultant
    Birmingham, London, Brighton.
    • dunstonh
    • By dunstonh 27th Sep 15, 11:57 PM
    • 89,883 Posts
    • 56,562 Thanks
    dunstonh
    • #4
    • 27th Sep 15, 11:57 PM
    • #4
    • 27th Sep 15, 11:57 PM
    Thanks for your reply - the US product it is based on is called participating whole life insurance. Participating from my research is American for 'with-profits' whole life insurance.
    We have different tax wrappers to the US. Whilst the life assurance wrappers are still available, they are not widely used as ISAs trump them. Typically next in the pecking order is unit trust/OEIC. Life funds can come into play in a small number of cases but nowadays its niche.

    With Profits is a fund. The Life wrapper is the wrapper that contains the funds. A bit like car and petrol. You put petrol in the car. You put the fund inside the wrapper.

    From my limited understanding of this concept (and watching a video on paradigmlife.net) the provider needs to be a mutual company because mutuals have no shareholders so the owners are the participating policyholders and receive a dividend.
    There are really only two viable with profits providers in the UK nowadays and both are PLCs. Not many mutuals left and they are mainly friendly societies with low value products. Most have pulled out for With Profits. Its a niche fund that most no longer have available for new business.

    According to the video a mutuals loyalty is to the policyholder. They make less risky investments. A non mutual is more likely high yield high risk such as AIG that almost went out of business as they need to retain shareholders and attract new ones. Mutuals are a good choice to promote longevity of the policy.
    No, thats complete rubbish. At least for the UK market anyway. The FCA require insurers to invest in a way that protects their solvency before returns. Its the same for all insurers. Most of the Friendly Societies that are still mutuals have financial strength ratings lower than the listed insurers.

    Plus, to put this totally to bed, the life assurance wrapper does not pay dividends.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Mickyfinn
    • By Mickyfinn 28th Sep 15, 12:25 AM
    • 57 Posts
    • 26 Thanks
    Mickyfinn
    • #5
    • 28th Sep 15, 12:25 AM
    • #5
    • 28th Sep 15, 12:25 AM
    Ok thanks for your help. Much appreciated.
    Property Consultant
    Birmingham, London, Brighton.
    • mdevine26
    • By mdevine26 21st Jan 17, 2:11 PM
    • 1 Posts
    • 0 Thanks
    mdevine26
    • #6
    • 21st Jan 17, 2:11 PM
    Did you get anywhere with this?
    • #6
    • 21st Jan 17, 2:11 PM
    Hi,

    I have just been looking into this idea and wondered if you got anywhere with it?

    I did come across this UK Mutual Insurance company that has a profit share - royal london

    Cheers,

    Mark
    • dunstonh
    • By dunstonh 21st Jan 17, 4:26 PM
    • 89,883 Posts
    • 56,562 Thanks
    dunstonh
    • #7
    • 21st Jan 17, 4:26 PM
    • #7
    • 21st Jan 17, 4:26 PM
    I did come across this UK Mutual Insurance company that has a profit share - royal london
    Only on the investment products IIRC.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Kevin Lee
    • By Kevin Lee 1st Dec 17, 1:05 AM
    • 1 Posts
    • 0 Thanks
    Kevin Lee
    • #8
    • 1st Dec 17, 1:05 AM
    • #8
    • 1st Dec 17, 1:05 AM
    Did you ever find a product in the UK that could do Infinite Banking properly?
    • TrickyDicky101
    • By TrickyDicky101 1st Dec 17, 8:45 AM
    • 2,827 Posts
    • 1,829 Thanks
    TrickyDicky101
    • #9
    • 1st Dec 17, 8:45 AM
    • #9
    • 1st Dec 17, 8:45 AM
    I seem to remember a certain media mogul trying something similar in the 80s - sadly it didn't end well for him when he disappeared from his yacht (presumed dead). RIP Robert Maxwell - and all his staff past and present he royally scr3wed.
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