Endless banking systems are becoming a reliable way to increase personal wealth. But there are also many practical and economical ways to apply the concept of endless banking to business.
Overview of the endless banking system
The concept is the same. With Infinite Banking System, you put yourself in the shoes of your own bank. This is done through a paid life insurance policy. As your monetary value increases, you can start lending money to yourself. For example, if you need to fix something in your home, you can borrow money from yourself using the monetary value specified in your policy.
You set the loan amount, the interest rate and the payment schedule. Paying the loan, you pay yourself – with interest. Thus, you finance and earn money yourself, instead of paying that money and interest to the bank or other financial institution. In fact, your monetary values will continue to yield interest and you will be able to receive dividends from the full amount of your loan, as if you had never borrowed before.
Applying the endless banking system to small business
For a small business owner, an endless banking system has a number of potential advantages. Life insurance loans can be used to pay for legitimate business expenses, including:
o rental premises
about the bonus
o service cars
about business trips
These are just a few ideas. The boundaries are endless. As with personal policies, the more you use the Infinite banking system for business purposes, the more benefits you will get. You can open a cash account or make a profit as a by-product of your normal business.
So why would you do that? Because the IRS allows companies to write off legitimate expenses in the best interests of business. By financing your business expenses through a dividend-paying life insurance plan, you receive income from your investments and tax write-offs for your business. It’s a win-win relationship. You, the individual, lend money to the business. The company will reimburse you the amount of the loan plus interest, thereby increasing the monetary value of your account. The company may write off the interest paid on the loan as a legitimate commercial expense.
While business owners can use their personal policies for life to finance business expenses, policies can also be purchased by businesses for large individuals, providing the same benefits in the form of liquidity, options, loans and tax breaks.
Make endless banking operations work for big business
The concept of Infinite Banking has long been common practice in large corporations and corporations. It is obvious that these types of enterprises have a much greater need for capital – much greater in size and volume than in individuals or small businesses. But the concept of Infinite Banking is managed by business life insurance and its analogue – bank life insurance.
Owner’s life insurance
Group life insurance policies, or COLI, are traditionally bought to cover key business leaders. These policies are also referred to as “key individuals” insurance. The company will purchase a life insurance policy for a key employee to cover the potential financial costs associated with their loss due to an unexpected death. The purpose of insurance protection is to cover the cost of recruiting and training new talent, as well as to compensate for any loss of activity due to the absence of a key manager. It also helps the company to reimburse the potential cost of payments to the family of the deceased employee.
COLI accounts can be used in the same way as individual life insurance policies. Companies use their life insurance policies to determine the monetary value. As with individual policies, contributions and benefits are tax-free and loans can be made as needed for business.
Bank life insurance policies
The financial industry has its own version of this type of insurance.
Bank-owned life insurance, or BOLI, has traditionally been issued by financial institutions for its key managers. Although this has been a common practice for many years, its popularity is growing. For example, in 2008, banks purchased life insurance for 126.1 billion dollars.
Using COLI and BOLI as endless banking concepts
Since these business life insurance policies tend to involve much larger amounts than individual policies, the potential for reinvestment and a sharp increase in monetary value is much higher. Although the policies are intended for individuals, they are purchased to protect businesses and banks from potential losses, increase first-tier capital and provide benefits that would otherwise be unavailable. Thus, the company or bank is the policy holder, and these procurement organizations can use these policies in the same way as an individual uses a life insurance policy to finance the banking system. Companies can use the monetary value of their policies to finance legitimate business expenses, such as:
o Large equipment or machines
o Employee pension plan
o Employee Health and Wellbeing Plan
o Commercial cars
o Your rented/construction area
o Business placement
o Transport costs
o Business loans
o Add additional benefits to attract key staff
Acquisition and merger of business
Companies and banks have long been aware of the financial benefits of unlimited banking thanks to their COLI and BOLI policies. Using a dividend-paying life insurance policy as a platform for the Infinite Banking System, small businesses can now enjoy the same benefits.
Scott Storache is a financial expert who studies the concept of endless banking with life insurance. This concept creates financial well-being by creating your own personal bank. Get a free Infinite Banking report to learn more about the concept.