PBC Policy, funded with paid up additions, offers what can be described the ideal Personal Banking Concept vehicle that offers liquidity, ongoing compounding interest of your money, dividends and asset protection in many jurisdictions.
Your money in your policy is available to you for any reason and any time. It is your money and the company must allow you to use your money in the policy in the form of loans or withdrawals. You do not have to qualify in order to take out a loan.
B. Tax Benefits
Guaranteed Tax Free Death Benefit, Tax Free Living Benefits, Tax Deferred Growth, Tax Free Policy Loans and Tax Free Withdrawals (up to basis)
C. Compound Interest
Not only cash value earns interest, EVEN if you have an outstanding policy loan, your money earns continuous compound interest on gross cash value balance including Paid Up Additions deposits; this results in a highly efficient banking concept, as your money continuous to grow and grow as time goes by. For example, If you had PBC account balance of $10,000 earning continuous COMPOUND INTEREST at 4% guaranteed plus dividend; at the same time your $5,000 policy loan could be working for you earning 8% interest somewhere else, this concept is simply having your money working for you double time!
As part of the benefit of using a mutual company, your Personal Banking Policy receives dividends. Although not guaranteed, most mutual companies have paid dividends for over 100 years, including during the Great Depression and many stock market crashes.
E. Asset Protection
When designing as an asset protection or wealth transfer strategies, it is important to check with your local state laws because many states have protections in place protecting the cash in a life insurance policy from the reach of creditors.
F. Recapture Debt
This concept becomes powerful when used as a strategy to recapture debt costs being paid to banks and other third parties. As Nelson Nash recommends: to treat the policy like a business, in this case, you are the Owner of your PBC Account. it is essential that the policy loans be repaid (with interest/or at a minimum the interest must be paid) and it is advisable that premiums continue to be paid through the duration of the policy period (rather than allowing the cash value to pay the premiums).
In Nelson Nash’s example, if you operate a grocery store and then raid the shelves for your personal use, this will have a serious adverse affect on your business performance and the bottom profitability. Instead, as the business owner, you value your merchandise GREATER than others. Therefore, as a banker dealing with your own money, you VALUE your money GREATER than a banker.