Your Personal Family Banking System

Your Personal Family Banking System
Your Personal Family Banking System

Having a personal family banking system is easier than you think. It appears that individuals (turned families) have become accustomed to banks (or The Feds) telling them what to do with their money – how to save it, how to borrow it, and what to spend the borrowed money on. It’s no wonder why people believe the idea of a Family Bank is only reserved for the ultra-rich.

On the contrary, a personal family banking system is a concept that’s easy to implement and understand if you use Whole Life Insurance as your banking vehicle.

Your Personal Family Banking System and Whole Life Insurance

Many individuals, when they hear about life insurance, assume it has everything to do with a death benefit – which, that assumption is true, but it’s not the whole truth. The whole truth depends on what type of insurance you buy.

Term Insurance guarantees a death benefit. Actually, with term insurance, that’s what you pay for – just a death benefit. With Whole Life Insurance, not only do you get a death benefit, but it also comes with living benefits – like your personal family banking system.

How a Personal Family Banking System Operates with Life Insurance

Whole Life Insurance comes with an inherent Cash Value. The cash value is possible because mutually owned insurance companies are literally owned by the policy holders, not by those sharing ownership on the stock market.

This mutual ownership allows life insurance companies to use the death benefit reserves as collateral when a policy owner wants to borrow from the insurance company. Unlike fractional reserve lending which is authorized to lend out 90% of a depositor’s dollar and keep only 10%, life insurance companies lend out 100% of the policy owner’s dollar because the dollar coincides with the amount of death benefit on reserve.

This lending strategy ensures certainty and security. With life insurance, there is no such thing as “bank” insolvency or regulation laws suddenly changing. A mutually owned life insurance company is a private business with a private contract between themselves and policyowners.


Cash Value Insurance is a Foundational Asset

The Cash Value is what allows you to borrow against yourself (typically tax-free), earn an annual rate of return, and provide your family with a legacy. Cash value also allows you to build wealth – through your personal family banking system.

Instead of using a traditional bank to finance high-priced items, like a home, cars, or an education, your whole life policy can finance those big purchases. When you use your whole life policy as a “bank,” you are still earning interest on your original cash value.

If you’re ever investing your cash value into other performing assets and something goes awry, you are financially safe. You determine the terms of your policy loan. This concept is what makes whole life insurance a foundational asset. You can find ways to enhance your wealth without being at risk.

Your Personal Family Banking System can Begin Right Now

There is always time to readjust your finances and start putting your money into a Whole Life Policy. We at Paradigm Life work with hundreds of individuals from all ages and all economic backgrounds. The only thing that matters to us, is that you keep your mind open to the possibilities of wealth through your personal family banking system.

Read: Powerful Cash Management Strategies

Watch: Family Banking that Works

Listen: Planning Ahead for College Tuition