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The 770 Account: Everything You Need to Know!

There is a great deal of hype surrounding the 770 account as a retirement and investment alternative. However, as with any investment, there is often a lack of clarity that comes with much of the information surrounding the 770 account.

In this guide, we want to go through exactly what a 770 account is, what it does, how it works, and help put down the facts about the 770 account that matter–so that you can make an informed decision about your own retirement and investment future.

This guide is a no-hype, to the point guide. We want to look at the facts surrounding the 770 account, but first, let’s answer the question, “Exactly what is a 770 account?”

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The Term Rider and Infinite Banking – Whole Life Insurance

One of the most important pieces to an Infinite Banking policy is the term rider. This small, very misunderstood, part of the policy can make a massive difference in the overall policy growth, as well as the agent commissions that come with buying any life insurance policy.

Let’s explore the term rider, what it is, how it works inside a policy, and how it affects agent commissions, to see just how this small insurance rider can make such a big difference in the outcome of an Infinite Banking, or cash value whole life insurance, policy.

The Term Rider – Infinite Banking

Infinite Banking, when done properly, utilizes a high cash value, whole life insurance policy in order to accomplish the goals that we want it to: safety, liquidity, and growth. But even though whole life insurance is the vehicle, it isn’t as simple as buying a whole life insurance policy and hoping for the best–this would be insanity and definitely wouldn’t work.

On the one side of the equation is whole life insurance–expensive and slow growing at first. The other side of the coin is the cash value–which is limited by the MEC (modified endowment contract). The MEC says that, for every dollar of cash value we have, we have to have a certain amount of insurance to keep the policy tax-free.

This is where the term rider comes into play.

The term rider is just that, it’s an add-on product that gives us term insurance on top of our whole life insurance.

In an Infinite Banking scenario, the term rider gives us more insurance, which in turn gives us more room. The term rider raises the ceiling on this MEC line, so that we can put more money into the cash value right away and buy less whole life insurance.

By doing this, our policy has more cash value in year one, money we can borrow and use right away. And we will find that it has a certain amount of added growth and benefit long-term. This is what makes the term rider so effective for an Infinite Banking policy, it literally buys us more cash value while keeping the policies tax advantages.

This is because term insurance is much cheaper than whole life insurance. And we don’t buy the term insurance forever, we just add the rider for a few years, usually around seven years, and after that, the growth of the whole life insurance gets to the point where the term insurance is no longer needed. This may sound a bit confusing, but the point is, term is cheaper than whole, and we want cash value growth first and foremost–not insurance. The term rider gives us the cash value availability and growth we want.

The Term Rider and Agent Commissions

Agents need to make money, and you need to grow your money. There is a delicate balance here that must be realized in order for each party to get what they want. In most cases, those who buy Infinite Banking policies are unaware of this fact–which some agents may take advantage of. Keep in mind, not all Infinite Banking policies use a term rider, so just because there is no term rider on your policy doesn’t mean the agent is trying to hurt you–more on this later.

An agent makes the bulk of their commission, in most companies and in most cases, off of the whole life insurance purchased within the policy.

The term rider pays pennies on the dollar to the agent, it offers them basically no monetary benefit.

When you purchase a whole life policy, the agent will make commission off of the “base” of that policy–or the whole life insurance in this case. For someone who spends 100,000 dollars on pure whole life insurance, the agent will make a commission off of that 100,000 dollars–a percentage anywhere from 40-100 percent depending on the agent’s contract with that life insurance company.

And this is in year one.

After year one, most agents make a very small percentages for a few more years.

This is how most whole life policies are structured for commission.

So the agent make the majority of their money in year one, and that’s it.

Some agents have higher contracts than others, which can make a difference in that agent’s earnings. Keep that in mind when talking to (or confronting) your agent, he or she may not be making the kind of money you think.

Now let’s add in the term rider. A term rider drives down the “base,” or the amount whole life insurance, that is being purchased. By purchasing cheap term insurance for a period of time, we are able to put more money into the cash value that would have normally gone into whole life insurance.

For the agent, the “base” whole life insurance will be much lower. The term insurance is replacing the expensive whole life insurance. This means they make a percentage off of a much smaller amount (the whole life insurance).

The agent is god over the policy in many ways, and they are often left to their own conscience, which can be manipulated by their own monetary struggles, to decide how much they make and how much cash value you get.

By understanding how a term rider works, often you can have a conversation with your agent that will create understanding and a fair outcome for both parties. Agents should be allowed to make money–remember, most agents make their money in the first year and that’s it.

The reduced fees and commissions come over the lifetime of an Infinite Banking policy, and an argument can be made that those fees and commissions are much lower over the lifetime of the policy than would be paid to a broker–say in a mutual fund–making a fee every year.

When a Term Rider Does NOT Apply

Although a term rider applies in most cases, there are some companies, or policy types, that do not require a term rider–or may call them by different names.

Certain companies have high cash value policies that are designed for upfront cash value availability–sometimes as high as 70-90 percent. They may not take term riders, they may call them a different name, or the term rider may be a very small option–not as much of an impact as in a regular whole life policy.

Ask your agent about the term rider, and the policy type, when considering an Infinite Banking policy.

Making the Decision

By educating yourself, and understanding what you are getting, you can help ensure you are getting the best Infinite Banking policy for you. The Infinite Banking Concept is an amazing source of security and strength long-term, however, policies setup sloppy or in err can make a major difference in the long-term outcome of that life insurance policy.

The term rider is just one piece of the puzzle, but it can make the biggest difference in the overall performance of your life insurance policy. Always read your policy before making any long-term decisions regarding whole life insurance as an investment.

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Should I Use a Fee Only Financial Advisor?

If you’re currently considering using an advisor to help invest some of your money, you may be wondering whether you should opt for a fee-based advisor. The past decade has seen a serious increase in the amount of fee-charging investment services—largely due to how lucrative the business strategy is for advisors and money management teams.

Fee-based advisory services have become the norm, and while this is good for advisors, you should make sure to do your own research prior to investing.

The fee-based financial industry has ballooned from almost non-existent to an industry worth over $2.8 billion. For this reason, the majority of money management advisors you’ll come across will be fee-based. We’ve compiled a list of the top three problems you may face if you opt to work with a fee-based advisor.

Let’s take a look at some of the real facts behind fee-based advisors.

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3 Exceptionally Useful Tools to Make and Follow a Budget


Budgeting isn’t the most engaging topic in finance, but it’s crucial if you want to take back control of your money. An individual’s income is often blamed for a lack of financial freedom, but what many Americans don’t realize is that budgeting can drastically change your financial status regardless of income level. The money is in the details — did you know that you can save more than $100,000 throughout your lifetime by simply bringing a packed lunch to work everyday. Subtleties like this can be taken advantage of through proper budgeting.

Over the past few years several comprehensive budgeting tools have emerged on the market. This article will outline three of the most popular budgeting tools available to help provide you with some stepping stones to creating the perfect budget today! 

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Save Money, Live Better – 6 Tips to Saving More Money

Many want to save money, live better lives, and be all around more comfortable. However, americans have become increasingly bad at saving their income. With 62% of American households have less than $1000 in savings, we are in a savings crisis in this country. But saving money is one of the best ways to achieve financial freedom. By having large cash reserves, you allow yourself the opportunity to reduce costs in your everyday life. In addition, you have the ability to make investments or take advantage of opportunities as they arise. In this article we will outline various easy ways that you can save money for the future.

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The Truth about the Infinite Banking Scam

In the investment community, whole life insurance as an investment, sometimes called an Infinite Banking scam, gets thrown under the bus before it’s even understood.

The reason for this often comes from quotes and other misinformation spread by Dave Ramsey and other radio entertainers. And, as can be expected, many of these who preach “buy term and invest the difference” are sponsored by term insurance companies. Think they have some personal motivations for telling you to buy term life? I’ll let you decide that.

The reality is this, all investments have benefit otherwise they wouldn’t be around anymore. Some investments take more risk. Some grow faster, some slower. Understanding an investment, the pros and the cons, and weighing it out against all your other options is the only real way to get to the very bottom. Let’s look at the Infinite Banking scam and see if the underlying investment, whole life insurance, has any real merit.

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