Hey all, I met this guy at a Chamber of Commerce deal. He works for a company that does financial planning, he says they specialize in "infinite banking". I'm having lunch with him next week about what his company does and the ideal user of this "investment" vehicle as he's calling it.

From what I gather, you take out a life insurance policy, pay into the policy "x" amount a month/year or whatever. After a certain amount of time your policy builds a surrender value. You are allowed to "borrow" against your surrender value at any time, and you pay the money back at a certain interest rate. (To yourself)

As you are paying into the life insurance policy, the insurance company gives you some % of interest that is 3-5% (according to the guy, but probably dependent on how much money you can contribute), and they give out dividends as well.

We deal w/ some companies that give out loans on their employees 401k loans that obviously have to be paid back, and those work out to be pretty good deals.

It seems like it's just a procedure to induce "forced savings".

There is very little on the concept available on the internet it seems but I've heard of doing this before except it was called "banking on yourself".

Has anyone else heard of people doing this and if so, is it worth it?

If you type infinite banking into google what is the second suggestion?

Yeah its scam, however I haven't seen anything saying it actually is a scam yet. I'm more than willing to question the person about it if I could find the downside in it. Which I'd guess would be that you don't have immediate access to the funds you pay in, or at least 100% of them.

That is because it really isn't a scam in the sense that MLM or full out fraud is. Basically it is a way to trick you into buying whole life insurance.

Curious what Ian has to say.

Ugh, stay away from financial planners.

yah its just whole life insurance. i got convinced to do it and cancelled in 3 months. waste of money but better than being illiquid for like 40 years