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Even though most people focus on the bank on yourself problems, there is more to it than meets the eye. When properly executed, using life insurance as a source of liquidity can shape your financial future for the better. That’s why you need to do your research before downplaying the essence of this strategy.

 

For those who are still having doubts regarding the bank on yourself strategy today is your lucky day. In this article, we will take you through some of the benefits of using life insurance as a source of liquidity.

 

Tax Free Growth

Tax free growth is undeniably one of the biggest benefits that is destined to come your way when you make up your mind to use life insurance as a source of liquidity. To make it even better, you will benefit from tax-free loans and withdrawals the very moment you decide to take this route. But that’s not to say this is a unique benefit available only to participating whole life insurance owners.

 

Remember, life insurance is not special in offering the ability to take tax-free loans. Things are not any different for tax-free withdrawals. After all, they can be taken from checking accounts and most savings accounts at banks and credit unions nationwide.

 

Arbitrage Opportunity

When a policy does not practice direct recognition, rest knowing it will not allow you to arbitrage the difference between the minimum crediting rate on cash values plus dividends on the hand. However, this is not free money unless dividends that year are unusually high.  

 

And you should not forget about the infinite banking concept, a cheap source of liquidity available without a credit application and no paperwork. Actually, you don’t have to pledge your home, and you never have to pay back the loan.

 

The Bottom Line

These are just but some of the benefits destined to come your way the very moment you decide to become your own banker. Either way, it is highly recommended that you also look into the bank on yourself problems before moving on to the next step.