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IBC in Real Life: When "Life Happens"



I had the most amazing meeting with a client this morning.


It didn’t start out that way. The first thing she said was, “I am SO frustrated.” The bills were piling up from two emergency surgeries her husband had in the past six months, and the loss of work because of it. The one glimmer of hope was an unexpected check from their health insurance company to help reimburse some of the cost of the surgeries.

 

“In the past,” she stated, “I would have put that check straight into the bank and started paying off debt, because I HATE debt. But since I met you, now I’m thinking differently. Wouldn’t it be smarter to fund our policy first and then pay off the debt? That’s why I wanted to meet with you today.”

 

Over the next hour and a diet Coke, we went through her options, including what would make the most financial sense, while also factoring in what brought the most peace of mind. Keep in mind, these are not irresponsible people. She was feeling such shame over having to take a bank loan with a high interest rate to pay for things that just fall under the category of “life happens.” Besides her husband’s surgeries, a drought had forced them to sell off their cattle herd, and her daughter had to have knee surgery from a basketball injury. It was all piling up and it seemed insurmountable.

 

However, and I love the "howevers", since they had capitalized their policy during the first two years they had it, she actually had a more options than she realized. We worked out a plan where she could continue to max fund her policy first, and then take out a policy loan to pay off the debt. I asked her how she would feel about having such a large balance on a policy loan. “Well,” she reasoned, “we are going to owe it somewhere. I’d rather have it against our policy than owed to the bank.” And she wonders why she’s one of my favorite clients. She gets it. She’s going to max fund her policy first with the reimbursement from the health insurance company, move her debt from “outside debt” to “inside debt,” and get on an aggressive plan to pay the policy loan back. The best thing is, once the loan is paid back, the growth of the policy looks the same as if she had never touched it. As icing on the cake, she’s trading a 9% loan interest rate at the bank for 5.7% at the life insurance company.

 

She thanked me over and over, and I could visibly see the relief on her face. “I feel SOOO much better. This is very doable. Thank you.”

 

That’s what makes it all worth it to me. It’s about so much more than having money. It’s about having options. It’s about having freedom. WHERE you store your money matters, and the control and peace of mind that the Infinite Banking Concept brings can’t be found on a policy illustration.

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