If you want to be your own banker using an IUL policy, you MUST maximum fund your IUL policy, there’s no getting around it, whereas if you use Dividend Paying Whole Life Insurance for infinite banking, maximum funding is NOT necessary because, the returns with dividend paying whole life insurance are not based on market returns and the calculations for whole life insurance are NOT fixed.
Furthermore, most IUL policies require you to leave your money in the IUL policy for at least 5 years, whereas there are a growing number of Dividend Paying Whole Life Insurance companies, that allow you to BORROW, money from the insurance company using your policy as collateral within 30 days.
The IUL in the longterm IF you max fund the policy all the way through, should do better than the Dividend Paying Whole Life Insurance, but that does not equate to IUL’s being better vehicles for Infinite Banking, because infinite banking revolves around POLICY LOANS, and because IUL’s are basically PERMENENT Term Life Insurance policies.
The cost of insurance in an IUL, will eventually start to eat away at your returns, whereas, this is where Whole Life Insurance polices shine brightest, as the longer you have them the more you can expect your cost of insurance to COME DOWN, meaning even if yourun into financial problems as you get older, you can still restructure your whole life policy whereas, if you were not maximum funding your IUL policy, your older years are when you might get nervous your policy might lapse.
In regards to life insurance, if you have the means, you should ALWAYS pick permanent life insurance over term insurance, because if God forbid you get sick or get into any accident, NO insurance company is going to want to ensure you, however if you have either Universal or Whole Life Insurance, at the very least you don’t have to worry about being cancelled as long as you pay your premiums, and if you have a large permanent insurance policy, it can be used as leverage to potentially find people who can help you pay your premiums, as you can make them a beneficiary if they can help pay your premiums.
Yes, I changed the topic a little bit, here, but it’s because, I believe people should be more focused on using Life Insurance for leverage, instead merely using it to be your own banker.