Whole life insurance for real estate investors? What a terrible idea.
Real estate investors sometimes consider whole life insurance or some form of it to borrow against the policy and use for investing.
this is sometimes called infinite banking, IUL, MPI, etc.
You lock yourself into high monthly premiums to do this with expensive penalties if you try to cancel, or surrender the policy.
there are high fees and commissions to purchase it.
It’s impossible to calculate how much you’ll make because they make it purposely confusing. You’ll never see the numbers laid out in black and white. red flag.
they try to convince that the cash value of the policy you are borrowing against is growing at a fast rate and it’s tax free, but in reality it grows far slower than index funds like the s&p500 grow over time, even if you factor in taxes,, you still come out way ahead with index funds.
these whole life policy gurus try to claim that it’s a secret of the rich,that the government hopes we don’t understand, but really the filthy rich only use whole life policies because they are fine with a small but safe return.
It is a foolish investment, or tool, for anyone else.
What say you?
