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    Issues with Bank on Yourself Concepts

    The Bank on Yourself concept continues to rock airwaves for both the good and bad reasons. With this concept, you simply get a bunch of cash value into a whole life policy and when you have a need for cash, you borrow that money against the policy cash value rather than borrowing it from your bank.

    In the event of your untimely death, the death benefit is leveraged to pay off the loans, with any remaining death benefit going to the policy beneficiaries. Regardless of your credit score or the essence of taking up the loan, you can always get that loan from the policy at the terms set up when you first purchased the policy.

    With Bank on Yourself, the idea is to have your money working in multiple places at once. If you keep repeating this process, you will certainly have your money ‘working’ in multiple places at once. However, you can never downplay the common issues with the Bank on Yourself concept.

    For a start, the Bank on Yourself concept requires you to buy a whole life policy. You’d be surprised to learn that Whole Life Insurance has a terrible reputation. An important point to remember is that the whole life insurance industry is plagued by overly expensive insurance, shady sales practices, and massive commissions.

    However, be careful when leveraging the Whole Life Insurance policy to Bank on Yourself. That’s because most agents won’t sell you the right kind of whole life policy to do this properly.  In fact, the vast majority of them are fond of selling you something besides a whole life policy. This could be a variable universal life or index universal life insurance policy.

    If at all you decide to take up whole life insurance to Bank on Yourself, remember that this is a completely separate section of your financial plan from the life insurance section. Bear in mind you’re not buying this policy to replace lost income in the event of your death. In short, research more about Bank on Yourself before using it to your advantage.

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