The Second Step to Creating Your Own Personal Bank

Mutual Life Insurance vs. Stock Life Insurance

The previous posting tackled the first step to creating your own personal bank:  get a whole life dividend paying life insurance.

In order to maximize and harness the full power of your personal bank, it is recommended that you have to get your whole life dividend paying life insurance from a mutual life insurance company as opposed to one from a stock life insurance company.

In a stock life insurance company,  whatever profits are there are first allocated to satisfy the stockholders of the company, before the policyholders get their shares in terms of dividends, if there are any left. 

In a mutual life insurance company, there are NO STOCKHOLDERS.  The policyholders own the company! In return, whatever profits are there are fully allocated to satisfy the policyholders.

Capitalize Your Bank

The second step to creating your own personal bank is to fully capitalize your bank.

To fully capitalize your bank, get a whole life dividend paying life insurance and fund it with the most premium or capital you can afford for the shortest time possible.

Most people get their life insurance with emphases on maximizing the death benefit with the least premium for the longest paying period available.  This route we have to reverse for purposes of infinite banking:  get the least death benefit,  with the most premium paid and the shortest paying period available.

We are doing this because we are getting the life insurance primarily not for protection but for financing and banking purposes.  However, if we do it the infinite banking way, the protection aspect will take care of itself.

On my next posting, I will discuss the need to put up several “branches” of your personal infinite bank.