Mass Mutual, a top life insurance company and heavily relied upon insurance carrier in the Infinite Banking space, recently came out with a memo to their agents against the Infinite Banking Concept.
https://www.youtube.com/watch?v=IFhcV4Kp1yg
They shared that the company doesn’t support concepts that promote or present whole life insurance as a personal banking policy that prioritizes maximizing policy cash values and immediate and regular access via policy loans. [paraphrased]
Today, we’ll talk about why an insurance provider may choose to take this position, why this doesn’t impact the Infinite Banking Concept, and how you, as a wise financial steward and wealth creator, can ensure you’re making the best decisions.
So, if you’re considering Infinite Banking, and you want to see exactly what you should watch out for … tune in now!
Table of contentsWhy Would Mass Mutual Denounce Infinite Banking?Combating MisinformationWhat Does This Mean for the Future of Infinite Banking?What Should You Be Aware of About Infinite Banking?Sales Tactics vs. Education and DisclosureBeware of Transactional Relationships Recognize that Illustrations are Projections, Not PredictionsKnow You’re Buying Life InsuranceBook A Strategy Call
Why Would Mass Mutual Denounce Infinite Banking?
When a company shoots down the infinite banking concept, what they’re really doing is denouncing the use of oversimplified sales tactics in the sale of whole life insurance. In other words, Mass Mutual and other companies have an interest and a duty to make sure that life insurance remains life insurance. That means that the death benefit remains the purpose of a life insurance policy.
This doesn’t mean people can’t use whole life insurance to save money and take policy loans. In fact, life insurance companies legally must allow policy loans as a contractual provision—they’re not going anywhere. Insurance companies like Mass Mutual are simply taking a stance against practices that may indicate that life insurance is not performing first and foremost, as life insurance should.
This statement is about the integrity of the industry, not about IBC in general.
Combating Misinformation
There’s a lot of misinformation about infinite banking policies, both within the IBC community and without. And one of the major problems within the industry is that advisors are trying to make whole life insurance look better than it is. And to be clear: whole life insurance is a very good product. But it’s not magic. The problem arises when people attempt to spread information that makes it seem magical.
It’s unfortunate when clients purchase a whole life insurance policy only to be blindsided about how life insurance actually works. We’ve heard many a horror story about how clients didn’t know their policy loans counted against their death benefit if they didn’t pay it back. Or they believed that the cash value was unrelated to the death benefit. Many clients are also misled about how life insurance is taxed.
It’s critical that companies like Mass Mutual take a stand against this misinformation in order to protect consumers. This is, first and foremost, the priority of the life insurance companies, as it should be. Hopefully, this encourages more agents to take IBC seriously so as not to spread misinformation.
[21:30] “The problem is [that] this muddies the water. It makes it difficult for consumers to figure out well who do I actually listen to. Who is telling me the right information? How am I going to get a policy that lasts? How am I going to make sure this is set up properly, [and] how do I make sure it’s not just a flash-in-the-pan policy? So the insurance company is looking at all of this happening and recognizing if people are putting in too much premium dollars because they don’t know what they’re really doing, it’s not sustainable.”
What Does This Mean for the Future of Infinite Banking?
As far as you are concerned,
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