Is Infinite Banking a Scam? [Debunking Dave Ramsey's Bad Advice] #infinitebanking #beyourownbank

At no time in Dave Ramsey’s video titled “Why Infinite Banking is a SCAM” does Dave ever touch upon infinite banking. Instead, Dave takes issue with whole life insurance, and more to the point, he takes issue with his “strawman” whole life insurance, which does not resemble a properly designed dividend paying whole life insurance policy used with infinite banking.

Point #1: Are whole life insurance dividends simply a return of premium?
No, instead, they are comprised of a return of premium, including an investment component, a mortality component, and they are tax-free. The life insurance company is not sitting on your premiums and simply returning them to you at the end of the year. Rather, the insurance company is investing your premiums and making a profit. And once you earn the dividend, it is locked in – you can never lose it, and it will continue to grow via compound interest over your lifetime.

Point #2: Financial Advisors vs Insurance Advisors
Dave makes it seem that you have to be either one or the other but in truth, many financial advisors understand the value of cash value life insurance and annuities and recommend insurance products for long term wealth planning and estate planning. Beware of so called advisers who only recommend assets tied to the stock market.

Point #3: Stock Market vs Infinite Banking
A whole life policy designed to practice infinite banking is a non-correlated asset that does not have the highs and lows of the stock market. In addition, you get a death benefit paid income tax free to your beneficiary. See the example at 16:30. How much financial peace do people have who have to stay fully invested in retirement or risk running out of money? Since Dave preaches financial peace, you would think having a guaranteed asset uncorrelated to the stock market would be something he would encourage rather than attack.

Point #4: Life Insurance Policy Loans
Dave claims that when you take a policy loan you are borrowing your own money. The truth is, you are borrowing money from the insurance company using your cash value as collateral. The benefit to the policyholder is that there is no lost opportunity because the cash value in their policy is still earning interest at a compounded rate, which is why cash value life insurance is such a great compound interest account. You can also use the loan to purchase cash flowing assets, so you are making money in your account and in the cash flowing asset.

Point #5: Whole Life Insurance Social Proof
Dave states that Infinite Banking “is old school whole life done poorly.” Of course, Dave never even addresses infinite banking, so apparently Dave is clueless as to how ridiculous this statement is.
But more to the point, infinite banking uses a properly designed whole life policy that maximizes cash value growth, which is anything but your typical “old school” version of whole life, that was primarily designed for the death benefit and not high cash value growth.

Further, whole life insurance is purchased and used by many top entrepreneurs and business owners, banks, corporations, politicians, etc. These are people and organizations that are financially wise. One has to wonder why Dave is seemingly unaware of this, or does he have a vested interest in remaining ignorant?

Point #6: Cash Value
Dave claims that your cash value is just sitting there and when you die, your cash values “all die with you.” The truth is, your cash value in an infinite banking policy is always growing, it is liquid, you can borrow against it or withdraw it, and as your cash value grows, so does your death benefit. So, when Dave says that when you die your beneficiary only receives the face value, the truth is your death benefit grows over time, so your beneficiary gets an increasing death benefit. See example at 25:15.

0:00 Intro
3:00 What is infinite banking?
4:38 Dave’s blanket advice
7:00 Dave’s uninformed reaction
8:17 Infinite banking plan goals
9:20 How to design an infinite banking policy
10:21 Point #1 – Dividends
15:15 Point #2 – Financial Advisers
16:00 Point #3 – Stock market vs Infinite banking (let’s look at the numbers)
21:16 Point #4 – Policy Loans
22:30 Point #5 – Social Proof
24:13 Point #6 – Cash Value (does it die with you?)
25:15 Real Example
28:16 Infinite Banking benefits
33:34 Conclusion

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DISCLAIMER: All content in this video is for educational purposes only and is not to be interpreted as personal financial advice. Always do your own due diligence.