Infinite Banking: Debt Elimination AND Recovering the Cost

Mandy was 24 years old and had managed to rack up over $6,000 of credit card debt, which was costing her 21% in interest charges. She was finding that paying even the monthly minimal payment on those credit cards was taking a bite out of her $20 per hour wages. Having recently seen how $46 billion of debt is seriously delinquent and that most of that delinquent debt was in the bottom third of US consumers, Mandy didn’t want to find herself in that bottom one third and so she began to seriously look for ways to pay off her credit cards.

As Mandy was growing up, she had witnessed the struggles her parents had pulling themselves out of debt using Dave Ramsey’s system, not once, but several times. Mandy knew there must be a better way to pay off her own debt and she was determined to discover that way. What Mandy really wanted was to find a way to pay off her debt and have something to show for her efforts, not just have $0.00 debt.

As she began her search to find that better way Mandy discovered the Wealth Talks podcast on YouTube. She subscribed and began to listen in every week and learned how the family of agents at McFie Insurance help hundreds of people pay off their debt(s) and build wealth simultaneously. Mandy was especially intrigued to discover that purchasing participating whole life insurance, and leveraging the cash values of that life insurance, was the best way to pay off her credit card debt and still earn a return on the money she had used to purchase her life insurance. It was almost too good to be true, but Mandy was willing to check it out further, especially when she saw what Hannah, who was about her own age, had accomplished.

Hannah was 25 when she had found herself in credit card debt of $8,900 with a $267 monthly minimum payment. If Hannah had decided to just pay this minimum monthly payment it would have taken her 314 months (until she was 51 years old) to completely ride herself of credit card debt. Hannah, however, had also discovered what the agents at McFie Insurance assist their clients doing…eliminate debt AND recover the cost of the interest and principal paid for that debt.

Hannah purchased a participating whole life insurance policy by dedicating $1.73 of every hour she worked towards the policy premium. This came to $3,600 every year. The participating whole life policy was designed like the agents at McFie Insurance design all the participating whole life policies they sell, to build early high cash value. This allowed Hannah to borrow $6,230 from her policy 36 months later when her credit card debt had been paid down to $6,230. After taking a cash value loan against her policy, Hannah used that borrowed money to completely pay off the remaining balance on her credit cards. Then she dedicated $186 (not $267 which had been the minimum credit card payment) every month to repaying her policy loan. In 37 months Hannah had repaid her policy loan AND she had $22,082 more cash value in her policy than when she initially took her policy loan ($27,041 - $4,959 = $22,082). Hannah recovered the $6,230 she paid on her credit cards AND had $27,041 to show for her efforts instead of $0.00.

This opened up new possibilities for Hannah, which, when she turned 35 she took advantage of. At age 35 Hannah borrowed $23,040 to make an investment. This investment has generated a 9% return over the past 4 years turning that $23,040 into $32,522. Before Hannah took this policy loan, she determined to continue and pay her annual premium, which had now been reduced to only $1,097 annually, and also repay the policy loan she took to make her investment. She accomplished this by paying the insurance company back $580 per month. Hannah’s total annual costs are $8,057 between her policy loan repayment and her premium payment. Her returns, when she turned 38, included an additional $27,980 of cash value in her participating whole life policy ($42,583 - $14,603 = $27,980) plus the $32,522 which was in her investment portfolio. This totals $60,502.

Hannah realizes if she had just invested $8,057 annually over the past 3 years into the same investment she choose when she borrowed the $23,040 against her policy, she would have had to generate a 110% return to match what she has been able to generate by leveraging her participating whole life insurance policy. On top of this, Hannah realizes that if something were to happen to her, she would leave $254,700, tax free, to her family, which would be a 14.1% return on all the premiums she has paid into her policy.

When Mandy studied Hannah’s case, she realized how superior this method of getting out of debt was compared to what her parents had gone through, multiple times, to ride themselves of credit card and non-performing debt. She is grateful her parents encouraged her to be debt free, regardless of what it might cost her, but Mandy is glad she doesn’t have to compromise between being debt free and having $0.00 to show for it. There is a better way and Mandy is ready to start her own participating whole life policy, like the ones McFie Insurance designs and sells, so she can leverage it to eliminate her credit card debt AND generate more for herself and her family without having to forgo, pinch and scrimp as she remembers her parents doing.