This is where wealth multiplication and access to capital occur, inspired by Nelson Nash's Infinite Banking Concept.
- Mechanism: Uses a specially structured, dividend-paying whole life insurance policy.
- Policy Ownership: The Spendthrift Trust owns the insurance policy and all other significant assets.
- Cash Flow: Business income and other asset revenues flow through the Disregarded LLC (owned by the 508).
- Funding the Policy: Money is legally moved from the LLC/508 structure into the insurance policy (owned by the Trust).
- Growth: Cash value within the policy grows tax-free and is contractually protected by the insurance company.
- Accessing Capital: You borrow against the policy's cash value (policy loans). This is a loan from the insurance company, using your cash value as collateral.
- The borrowed money can fund businesses, investments, marketing, real estate acquisitions ā anything you choose.
- Crucially, your full cash value continues to earn dividends and interest as if it were never touched (uninterrupted compounding).
Background: Infinite Banking (or Privatized Banking) involves using a whole life insurance policy as your personal "bank." You capitalize it, then borrow against its cash value. Because policy loans don't disrupt the underlying cash value's growth, your money works in two places at once.