Quote from @Josh St Laurent:
@Deb S. That's so weird about the link, I appreciate you pointing that out!
I'll give some more context since the link isn't working.
I've been insurance licensed for 13 years, started my career at Mass Mutual, and have put in place thousands of policies for clients over the years. After Mass Mutual, I spent 10 years at Fidelity Investments, specializing in different areas of finance, including managing a team specializing in insurance planning. I then started my own virtual family office focused on helping real estate investors.
I have a Masters in Advanced Financial Life Planning, a CFP (Certified Financial Planner), CFT (Certified Financial Therapist), and am a candidate for both the EA and APFC. I teach aspiring financial planners at the graduate level at Golden Gate University and often hear this sort of sales pitch for IULs, Infinite Banking, etc.
Earlier today, the Institute for Fiduciary Standards gathered, and part of what was discussed was the negligence of the "infinite banking" community in not educating themselves on holistic financial planning and how they violate their fiduciary duty to clients.
I believe that @Thomas Rutkowski,@Brandon Beaudoin, and @Deb S. believe in what they're selling. I thought the same when I worked at Mass Mutual and had only been educated on insurance concepts from salespeople. As someone who doesn't work on commissions, charges flat fees and has no incentive to sell anyone anything, I like to offer a different viewpoint when I see these types of posts. Especially on BP where it could really hurt a RE investor. Brandon is amazed at how many people choose to ignore facts so let's cover a few that might help as you look into committing to a whole life insurance policy.
1. Cash Value Takes Time
Many IULs (Index Universal Life policies) may take 7–10 years before you can borrow a meaningful amount of cash value. This can be a big roadblock if you need funds sooner to secure deals.
2. Fees and Commissions
A large part of your early premiums may go toward commissions and policy fees. Over time, the cost of insurance, monthly charges, and surrender fees (which can last 10+ years) reduce how quickly your cash value grows.
3. Policy Loan Costs & Performance
You’ll still pay interest when borrowing against your policy. If the index underperforms—or if caps and participation rates limit returns—you might not get the growth you expected.
4. Other Funding Options
For most real estate investors, it’s worth comparing mortgages, HELOCs, or partnerships. These options can provide simpler and cheaper access to funds, especially if rapid property acquisitions are your main goal.
Life insurance is a powerful tool when used for the right reasons—like estate planning or key-person coverage. But if real estate investing is your priority, it’s important to consider all the costs and timelines before committing to an IUL. Hope this helps!
P.S. I know this will anger the infinite banking supporters on this thread. My intention is only to educate not to argue. I challenge you all to learn about some alternatives and have more tools in your toolbelt to help clients and the people you care about!
It's great that you want to offer comprehensive financial planning advice. However, the original poster was simply asking about the best way to go about getting a policy set up for a very specific task. Real Estate investors are running a business. And for savvy business owners who get it, maximum over-funded policies are simply a tool to accelerate wealth accumulation over time.
This is a case of "when all you have is a hammer, everything looks like a nail". Not everyone is looking for comprehensive financial planning advice.
Despite the creds that you whipped out (appeal to authority fallacy), you still don't seem to understand how life insurance works under the hood. I purposefully made the words maximum over-funded policy bold and italicized just for you. But it was in vain. If you understood these policy designs, you would never make a statement like "It can take years to access the cash value". My clients can access a significant amount of cash value immediately.
It's also important to understand that in a maximum over-funded policy, the fees and expenses are much lower than a traditionally-designed policy. In a properly-designed policy, the fees add up to only 15% of the premium. That means 80-85% goes to the cash value and can be accessed via policy loan immediately.
A client funding a policy with $100,000 annual premiums can access ~$85,000. It only takes a few years of "The Double Play" to recover that loss.
I see you are also repeating the "IUL is a scam" nonsense. This again shows me that you don't understand how these policies work under the hood. No one who understands life insurance would say something ridiculous like that. I'm not an "IUL Guy" or a "WL Guy". I use Both in my business.
Both IUL and WL work off the exact same mortality tables. Insurance companies invest in the same asset classes, that generate roughly the same returns. They really only differ in how the gains of those investments are credited to the policy holders. And, this may come as a shock, but the cost of insurance in a WL increases just as much as in an IUL... That's how life insurance works.
Both IUL an Whole Life are great tools. For the person that can tolerate the variability of returns, the IUL is probably the better choice with the best long-term prospects for growth.
