The First Step in Building Your Own Personal Bank

The first step in creating and building your own personal infinite bank is to get yourself a dividend-paying whole life insurance.

What is a dividend-paying whole life insurance?

There are several variants of  life insurance coverage in the market today.  One is the term life insurance coverage.  This is temporary life insurance whose coverage is up to one year, or five years, or ten years.  This type of insurance is akin to renting a house.  You pay a monthly rent but you will have no equity, or ownership, on the house.  Term insurance does not have cash values.

Another type of life insurance is the endowment type.  This type will give you cover up to a certain number of years, i.e., 15 years or 20 years, or up to a certain attained age, i.e., age 50 or age 65.  When the number of years or age is attained, the coverage matures or endows, you will get the benefits stated in the insurance contract, but you will no longer have an insurance cover.

A dividend-paying whole life insurance, on the other hand,  is a life insurance that will give you a coverage up to age 100.  This type also gives a yearly dividend, although dividends are  not guaranteed.

Where to get a dividend-paying whole life insurance.

There are several life insurance companies operating in the Philippines today.  But for purposes of infinite banking,  the recommendation is for you to get your dividend-paying whole life insurance from  mutual life insurance companies, as oppose to getting your insurance from  stock life insurance companies.  There is a reason for this.  And, that will be the topic for my next posting.

Have a blessed year ahead!