While the Bank on Yourself concept is widely popularized for its sheer ability to help users attain financial freedom, there still remains some controversies surrounding it. And the earlier you learn about these Bank on Yourself issues the better.
Fret not since we are here to help clear some of the doubts you might be having regarding this financial strategy. In this blog post, we exam some of the problems with Bank on Yourself that you should learn before using it to your advantage.
Merely because you maximize the paid-up additions and ensure the policy offers non-direct recognition loans, it is not to say that everything will turn out as expected. After all, there is a feature called ‘wash loans,’ that you should know about. Although it is still okay to have dividends paid on money you have taken out of the policy, you still have to pay interest on that loan.
With a wash loan, your loan interest is still the same as the dividend rate on the policy. In that perspective, it acts just like you withdrew the money from a bank account. You don’t have to make do with any interest charged on withdrawals.
Most People Pushing It Stand to Benefit
The biggest problem with Bank on Yourself is that most people talking about it stand to profit from it. They may be selling books, seminars, or online courses, but a good number of them are simply selling whole life insurance with the hope that they’ll earn fat commissions.
In fact, it is common to stumble across agents talking about Bank on Yourself as a feature of whole life who are not actually selling policies with the necessary features to do it. The issue is that those who understand the Bank on Yourself concept perfectly have a massive conflict of interest and generally inflate the benefits.
Understanding the different Bank on Yourself controversies is essential before you can finally use it to your advantage. Hopefully, this simple guide can serve as a good starting point before you decide to become your own banker.