When I was driving back from a bridge tournament some time ago, I listened to an advertisement on an XM radio channel from an outfit calling itself The Infinite Bank. The ad stated that investments in this program would never go down in value and would always grow tax-deferred: long-term values would be generated that would outperform other investments, including one’s IRA. Such claims are, at a minimum, misleading and, in large measure, do not produce the touted results.
This approach touts the use of a participating whole life insurance policy (one issued by a mutual life insurance company) to create and subsequently build up one’s “bank” – translated the policy’s cash values – so that the policy owner can then access his own “bank’s” money by borrowing from those cash values and then subsequently repaying himself, and not a third party, such as a bank. The vendors of this private banking concept recommend that the policy owner actually repay more than what is required, and thus build additional value. A gentleman by the name of Russell Nash, a former Equitable Life agent, produced this private banking idea, and he hosts seminars around the country in which he extols the virtues of his concept. Other vendors will charge agents for training. Interestingly, when I inquired, I was unable to discover the names of any life…
