Regardless of how you choose to call it, the Bank on Yourself strategy is widely relied upon by individuals who want to safeguard their financial freedom. While the proponents of this financial concept have full trust in it, there is also the issue of handling the numerous Bank on Yourself problems.
As a quick reminder, the Bank on Yourself makes use of a high cash value participating whole life insurance policy. The idea behind this strategy is that as this policy continues to accumulate cash value, then you can always access this money via loans without affecting the policy cash value growth, or any other assets.
But for things to work as you expect, you will first have to buy a participating whole life insurance policy. It should be a properly designed whole life insurance policy otherwise it won’t yield the expected results. The thing with whole-life policies is that they are able to accrue cash value over time.
To access this cash value, you will have to take out a loan against the cash value of your policy to use for whatever reason you desire. Keep in mind this loan is an interest-only loan and can be paid at whatever is comfortable and affordable to you. That’s where it gets the name ‘Bank on Yourself.’
However, you can never downplay the numerous Bank on Yourself problems accompanied with this financial strategy. Actually, it is not very logical to believe that you can do away with the control that banks and financial institutions have over you.
An important point to remember is that all the disadvantages of owning a participating whole life insurance are reflective of a policy owner’s misunderstanding, ignorance, or lack of guidance regarding the rules and regulations surrounding the ownership of participating whole life insurance.
Before taking advantage of the Bank on Yourself financial strategy, it pays off to always understand the pros and cons. And looking into the numerous Bank on Yourself problems Can serve as a good starting point before you finally take the next step of action.