While becoming your own banker has its benefits, it is essential to consider potential risks, including:
- Insurance costs: Whole life insurance policies as with all insurance purchased has a cost for the insurance. Initially, there is a portion of your premium that is not available for use in the cash value. However, over time, the premiums become super-efficient as a dollar in premium provides over a dollar in cash value returned. This is a super charging factor in Private Banking Strategies®.
- Loan interest: You will be charged interest when you borrow against the policy’s cash value. If you don’t pay the interest on the policy loan, it will create a drag against the cash value. This is easily solved by making sure you pay the loans as would be the case in any traditional loan.
