Whole Life Banking

Controlling the banking function only makes sense with dividend-paying, cash value whole life insurance with a mutual company. It does not make sense with indexed universal life insurance, as many misinformed financial professionals incorrectly promote. Indexed universal life insurance is tied to the stock market and the stock market is tied to the fractional-reserve banking system operating under the Federal Reserve System of central banking. The Federal Reserve System regulates all commercial banks and is inherently a debt-based, inflationary system. Using indexed universal life insurance policies for banking defeats the entire point of controlling the banking function, which is to detach from the fractional reserve/federal reserve banking system which keeps most Americans in a cycle of perpetual debt and devalues our currency through inflationary policies. Unlike an IUL policy, dividend-paying whole life insurance provides guaranteed cash value growth, staying ahead of inflation...

The central bank of the US, the Federal Reserve (the Fed), is indirectly tied to the stock market through its influence over economic conditions, interest rates, and overall financial stability. While the Fed's purported primary mandate is to manage inflation, unemployment, and ensure the stability of the financial system, its actions have significant effects on the stock market. Here’s how the Fed is tied to the stock market. The Fed controls the federal funds rate, which is the interest rate at which banks lend to each other overnight. This rate serves as the foundation for other interest rates throughout the economy, including those for mortgages, business loans, and bonds. When the Federal reserve lowers interest rates, borrowing becomes cheaper, which encourages businesses to expand and consumers to spend. This often boosts corporate earnings of publicly traded companies, which can drive stock prices higher. Lower interest rates also make bonds and savings accounts less attrac...

To see in plain language how the federal government views the tax treatment of your properly designed whole life banking policy, read the first paragraph on page 27 of the Government Accountability Office (GAO) report on the tax treatment of life insurance: “If a policyholder borrows the inside buildup from his or her life insurance policy, the amount borrowed is considered a transfer of capital, not a realization of income, and, therefore, is not subject to taxation. This reasoning is in accord with tax policy on other types of loans, such as consumer loans or home mortgages. These loans are merely transfers of capital or savings from one person to another through a financial intermediary. The ability to borrow against a life insurance policy means that the interest income that is supposed to be building up to fund death benefits can instead be a source of untaxed current income. If the loans are not repaid, the inside buildup will never be taxed; death benefits will simply be reduced...

A  Modified Endowment Contract (MEC)  is a type of life insurance policy that has exceeded certain premium limits set by the IRS, causing it to lose some of the tax advantages typically associated with life insurance. To understand this fully, it’s helpful to refer to  Internal Revenue Code (IRC) Section 7702 , which outlines the tax treatment of life insurance policies. A Modified Endowment Contract is created when a life insurance policy fails the  7-pay test  established by the IRS. This test determines whether the policy is “overfunded” by evaluating if the cumulative premiums paid during the first seven years exceed the amount required to pay up the policy over seven years. If the premiums exceed this limit, the policy becomes a MEC. Once a policy becomes a MEC, it is no longer treated like a traditional life insurance policy for tax purposes. The primary consequence is that distributions (withdrawals, loans, etc.) from the cash value of the policy are taxe...

The difference between direct recognition and non-direct recognition mutual life insurance companies is in how they handle the dividends on a whole life insurance policy when the policyholder takes out a loan against the policy’s cash value. 1. Direct Recognition: In this case, the insurance company adjusts the dividends on the portion of the cash value that has been used as collateral for a policy loan. This means the company recognizes that a loan has been taken out and may reduce the dividend payout on the borrowed portion of the cash value. However, some direct recognition companies may offer a higher crediting rate on the cash value that is not being borrowed against, potentially offsetting the impact. • Key Point: Dividends are directly impacted by the policy loan, with possible reductions or adjustments based on the outstanding loan amount. 2. Non-Direct Recognition: These companies do not adjust the dividends when a policy loan is taken out. The policyholder continues to receiv...

Scenario 1: Bob Settling His Bank Loans After Death - Business Value: Bob owns a business valued at $1 million. - Bank Loan Amount: Bob borrows $50,000 annually to fund some or all of his personal, lifestyle consumption, using his business as collateral for a bank loan. - His business may or may not continue to increase in value while the loan is outstanding, increasing or decreasing his borrowing potential at the end of each repayment period. - Tax-Free: Since the bank loan is not considered income, Bob doesn’t pay taxes on the $50,000 he borrows each year. - No Immediate Repayment: Bob isn’t required to repay the loan while alive, allowing him to maintain tax-free cash flow from his business. After Bob’s Death: - Loan Settlement: Upon Bob's death, the total outstanding loans, say $500,000 (from 10 years of borrowing $50,000 annually), must be repaid. - Liquidation of Business: To settle the bank loans, the bank will liquidate part of Bob's business. If Bob’s business is val...

Initially, the 401(k) was designed as a supplement to traditional pension plans, but it later became a primary retirement savings vehicle. Ted Benna created the 401(k). He was a benefits consultant who, in 1980, used a provision in the U.S. tax code (Section 401(k)) to create the first employer-sponsored retirement savings plan. The purported goal was to offer employees a tax-advantaged way to save for retirement while also reducing taxable income, which appealed to both employees and employers. However, tax deferred means taxed later, meaning most people are in a higher tax bracket when they retire, potentially increasing their tax liabilities at retirement age. Withdrawing money from a 401(k) can incur taxes and a 10% early withdrawal penalty if you’re under age 59½. To mitigate these costs in order to fund a whole life insurance policy for banking, consider these strategies: Strategies: 1. Direct Rollover to an IRA: Roll over the 401(k) funds into an IRA without tax penalties. You ...

The United States of America is the 25th freest nation in the world. Capital refers to assets or resources (goods) that are used to produce other goods and services. It is anything that can enhance the productivity of labor and help generate more value over time. Capital is essential for growth, whether it’s a tool, a piece of equipment, or even money used to invest in resources. Capital goods are the actual tools or equipment such as nets for fishing or dams for corralling fish. They directly assist in the production of consumer goods. Combining a net and a dam to catch fish is an example of improving production efficiency through capital accumulation because it involves using multiple forms of capital (the net and the dam) in tandem to increase the overall productivity of labor. Each tool—used separately—enhances the fish-catching process, but when used together, they complement each other and create a more efficient system. This combination of tools illustrates how capital accumulat...

In many ways the US is a corporatocracy, a system where corporations dominate government policy, and central banking plays a key role in supporting it. Central banks, such as the Federal Reserve, enable massive government borrowing and spending by creating money and buying government debt. This allows for policies that favor large corporations, especially in defense, finance, and other sectors tied to government contracts. 1. Wealth Concentration: Central banks create money, inflating assets that benefit the wealthy and large corporations, widening the income gap. 2. Corporate Dominance: Large corporations access cheap credit from central banks, allowing them to grow and suppress smaller businesses. 3. Influence on Government: Central banks support policies that favor corporate bailouts and deregulation, making governments more responsive to corporate interests. 4. Misuse of Resources: Central bank money enables high government spending on defense contractors and large firms, diver...

The central banking system, a system that functions under the fiat money model like the Federal Reserve, is tied to the military-industrial complex through its ability to create money, fund wars, and support large-scale government spending. 1. Unlimited Money Supply: With a central bank able to print or digitally create as much money as necessary, governments can finance wars without immediately raising taxes or cutting other spending. This allows politicians to fund military operations and defense contracts without facing immediate backlash from voters who would otherwise feel the burden directly through taxation. The Federal Reserve, for instance, can finance large-scale military budgets by purchasing government debt (Treasury bonds), which expands the money supply. 2. Debt Financing of War: Central banks enable governments to borrow money, often through the sale of government bonds, to finance wars. The U.S. government, for instance, has often turned to the Federal Reserve and globa...