I am Financial Planner in Phoenix who does what banks do because they have all the money…

As a financial planner in Phoenix, I am often asked why I think insurance products are the best vehicles to use for financial planning. Well, here is a secret I doubt you will hear from another financial planner in Phoenix:

Banks, when it comes to investing their own money—don’t follow conventional wisdom and put their cash into mutual funds, stocks, hedge funds, term life insurance or risky real estate deals. Instead, they place a large portion of their vital reserves, known as Tier One Capital, into high cash value life insurance or permanent insurance. The same type we suggest you use in the How To Be Your Own Bank video.

Banks invest billions into high cash value life insurance. Surprisingly, for many banks life insurance is their largest asset class. Many banks have more invested in life insurance policies than they do in bank premises, fixed assets and all other real estate assets combined.

Here is an updated list of bank holdings in life insurance:

As you can see from above, Bank of America has $18.99 billion dollars invested in life insurance. Huntington Bank has over 40% of their Tier One capital in life insurance. So why doesn’t every financial planner in Phoenix tell you about this? They don’t know it either.

Banks buy cash-value life insurance to improve their income statement and strengthen
their balance sheet. With life insurance, banks enjoy tax-deferral (unlike taxable assets)
and receive income tax-free. You can too.

As investment stewards, life insurance companies are safer and more dependable than banks because they are not highly leveraged. And, as risk managers and fiduciaries, life companies have exemplary track records in preserving principal and managing money conservatively over long periods.

Finally, banks use life insurance is an economic power tool to design and fund executive pensions as well as other employee benefits such as life, health, disability and severance pay. This is an important strategy every financial planner in Phoenix should be talking about. You can learn more on the Tax FREE Investing section of this website.