Be Prepared for Windfalls

An inheritance. A strong harvest. The sale of land or equipment. A business bonus. Windfalls can come from many places, and they often arrive after years of work or planning. Without a plan, it’s easy for a large sum of money to disappear just as quickly as it arrived.

The Infinite Banking Concept encourages you to think about how unexpected capital could fit into your long-term financial system before the opportunity arises. Depending on your circumstances and the terms of an existing policy, you might use a windfall to repay policy loans, increase funding through paid-up additions, or establish additional properly structured life insurance coverage.

The goal isn’t simply to put every unexpected dollar into a life insurance policy. A windfall may have many competing uses—paying debt, strengthening cash reserves, investing, making a purchase, giving, or funding future goals. The important question is how each choice fits into the larger plan.

There are also limits and tax rules that can affect how much premium can be paid into a life insurance policy without changing its tax treatment. Any strategy involving a significant windfall should be carefully designed with the policy’s terms and applicable tax rules in mind.

The best time to decide what a windfall will do for your family is before it arrives.

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