Too old for Infinite Banking

Too Old For Infinite Banking with Whole Life Insurance?

Do you want to use whole life insurance to store cash, build an emergency/opportunity fund, and create a legacy, but you wish you’d learned about this concept when you were younger? Do you feel like you’re too old for the Infinite Banking Concept (IBC)?

Fortunately, it might not be too late for you to get started. In this episode, we’re going talk about how life insurance works when you start a policy later in life, and how you can make the most of it. So if you want to see if Privatized Banking can still work to build cash value and accelerate time and money freedom, even if you’re starting a policy as a senior, tune in below!

Where The Infinite Banking Concept Fits In The Bigger Picture

Privatized Banking

The Infinite Banking Concept is just one step in the greater Cash Flow System.

While it’s nestled into Stage 2, Protection, it also improves everything else around it.  Infinite Banking helps you keep more of the money you make in Stage 1, amplify your cash-flowing asset strategy in Stage 3, and accelerate your Time and Money Freedom.

How Old is Too Old for Infinite Banking?

Many people assume that because Privatized Banking takes time, that after a certain age it’s no longer a viable strategy for them. In reality, there’s more time than you’d think. Your results, after a certain age, will depend more on what you’re hoping to accomplish than anything.

Most people look at life insurance and think of term insurance, the simplest insurance, and have preconceived notions. It’s insurance that is pure cost. And based on experiences with term insurance, people are hesitant to pursue insurance strategies later in life. However, whole life insurance can work for you even if you start in your senior years.

Whether you’re hoping to bridge income, leave a legacy, or round out your estate plan—it’s likely not too late. You can be in your 70s and start your first policy. In reality, most insurance companies will take policies until age 80. So clearly, they believe that it’s valuable enough for someone in their 70s.

Ultimately, this is possible because of the careful actuarial planning of life insurance companies, which allows them to insure people up to that point.

The Impact of Privatized Banking Later in Life

One of the biggest concerns we hear is that the cash value won’t be as large. While it’s true that your break-even point may be later, the trajectory will be more or less the same. The opportunity cost lost in your cash value may only be a few hundred dollars. The amount of cash value is proportionate to the way the policy is designed, and the premiums paid because of that design. The most significant loss is the face value of your death benefit. What would be a $2 million death benefit for a 30-year old is going to be about $1 million for a 50-year-old. For a 70-year-old, it may be closer to $500,000. However, that half a million will have a better impact on your legacy planning than nothing.

The reason the death benefit will decrease the older you are when you start a policy is that the cost of insuring you goes up. Insurance companies know that they’ll have to pay a claim on everyone they provide whole life insurance to; however, they use very careful mortality calculations to do so. The likelihood they’ll pay a claim on a 30-year-old is minuscule. So the costs of insurance are more likely to be covered. Someone in their 70s is likelier to have a claim paid sooner, which means the company has a smaller window to cover the costs of insurance. So the same premium will buy less death benefit.

How Can You Use Privatized Banking Now?

Although whole life insurance itself may be available to you, Privatized banking strategies do take time. Does that mean if you’re in your 60s or 70s that it’s no longer available to you?

Fortunately, you’re probably not too old for Infinite Banking. We have several real-world examples of people who have started policies in their 70s and have used them to implement wealth strategies. Here are some ideas of what you can do with your insurance.

Transfer of IRA

With a new policy, one woman in her 70s decided to transfer her IRA into a whole life policy. She wanted to leave a legacy for her children and saw the advantages of paying taxes today, to transfer a tax-free inheritance.

Additionally, she has no interest in real estate or starting a business, but she does take an annual trip to South America. Usually, she pays for this trip by saving a few hundred dollars a month. So instead, she’s decided to borrow against the policy, and use the money she saves to pay down the loan.

She believed at one time that she may be too old for Infinite Banking strategies, yet she’s found practical ways to implement these strategies.

Family Banking

Another person used their cash value to buy a rental property for their children to live in. They charged reasonable rent so their children could have housing, while they worked on their credit scores and saved money. They then took the cash flow from the property to pay the policy loan back.

Another way to use the family banking strategy is to take the cash value, loan to your children to buy cars, and have the children pay you back.

If you don’t think your children will pay you back, consider this. Your children are likely your beneficiaries. So they’ll get the same amount whether they pay you back or not. The death benefit will be reduced by any outstanding loans when paid out. By repaying the life insurance loans now, your children increase their payout at a later date. Keep in mind that you can also set up the repayments to be processed straight from their bank accounts.

Privatized Banking As Income

Another key component of Privatized Banking is the ability to supplement your retirement income. Not only can it be an additional stream to pull from, but it also makes all of your assets perform better. Here are a few examples.

Social Security and Pension Maximization

Social security is taxed at a maximum of 85%–which means that only 85% of your social security income is subject to taxes. If your other income is below $44k, you can lower the portion of your social security income that is taxed. And if you can reduce your income below $32,000 you won’t have to pay any taxes on social security income. And many people will say, but how do I live on that?

Too old for Infinite Banking

That’s where Roth IRA and whole life insurance dividends come in. The use of these assets will allow you to pull interest and dividends, or even take policy loans to supplement your income. And the reason you don’t pay taxes is that you already paid the taxes on that money before your contributions or premiums. So you can slash taxes paid on your Social Security and stay in a lower tax bracket, all while drawing a significant income. It’s in the tax code, making it a legal tax strategy.

You can also use whole life insurance for pension maximization.

Volatility Buffer

Whole life insurance can also act as a buffer against any market volatility. With this strategy, you can increase the longevity of your investments by years if you’re drawing income from an investment portfolio. The idea originated with Wade Pfau. The strategy is to draw your income from your life insurance when the market is down. It’s hard to recover from a down year when you have to take money out of your investments, and it can quickly bleed you dry. The ability to instead draw income from another account allows it to bounce back.

Permission to Spend

Another reason whole life insurance can be beneficial to you in retirement is the “permission to spend” idea. That is, if you want to leave a legacy and still want to use your other assets, whole life insurance acts as a permission slip. The knowledge that you’ll have a death benefit to leave to your heirs can give you the peace of mind to use your existing assets—reverse mortgages, SPIAs, and other income-producing strategies won’t leave your heirs without.

Accelerated Death Benefit Rider

Towards the end of your life, you can use the accelerated death benefit to pay for unknown expenses. This is a good last resort, and safety net, that can give you tremendous peace of mind. If you have the accelerated death benefit rider, the insurance company will give you access to your death benefit if diagnosed with a terminal illness. This benefit can be used for medical expenses and, in reality, anything you wish.

However, life insurance is an asset that you’ll want to keep for as long as possible, so we don’t recommend using whole life insurance as your primary income. You can best utilize your policy as a support asset, one that provides you with peace of mind.

Not Too Old for Infinite Banking

If you’re in your senior years and you think you’ve missed the opportunity to start your privatized bank, you’re probably not too old for Infinite Banking. You have more time than you think. This asset provides you with liquidity, certainty, and the promise that you won’t outlive your money.

If you’re wondering how whole life insurance fits into your personal economy, we’d love to help. We exist to help you do the most with your money, so you can build time and money freedom.

Book A Strategy Call

Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  

We spend a lot of time and attention educating and sharing the benefits of Privatized Banking, so it can come across like we’re the whole life insurance people. However, when it comes to working with clients directly, we don’t start with products. 

Family Banking is the middle of the process, not the start, not the end, and not the complete picture. Helping you think differently about your money starts with your individual financial picture and goals. 

Book an Introductory Call with our team today, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster.

That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth  … plus boosts your investment returns, and guarantees a legacy, go to to learn more.

Rachel Marshall

Rachel Marshall is a devoted wife and nurturing mother to three wonderful children. Rachel is a speaker, coach, and the author of Seven Generations Legacy™, passionate about helping enterprising families unlock their true potential and live into the multi-generational legacy they are destined for. After a near-death experience, she developed a deep understanding of the significance of recognizing and embracing one's unique legacy As Co-Founder and Chief Financial Educator of The Money Advantage, Rachel Marshall is renowned for her ability to make money simple, fun, and doable. She empowers her clients to build sustainable multi-generational wealth and create a legacy that extends far beyond mere financial success. Rachel's expertise lies in helping wealth creators remove the fear of money ruining their children, give instructions for stewarding family money, teach financial stewardship and create perpetual wealth through family banking, and save time coordinating family finances. Rachel co-hosts The Money Advantage podcast, a highly popular show that delves into business and personal finance, including how to effectively manage finances, protect wealth, and generate sustainable cash flow. Rachel's engaging teaching style and practical advice have made her a trusted source of financial wisdom for her listeners.
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