Bank On Yourself Dividend Paying Life Insurance vs Savings Account

We received dozens of insightful entries for our “Bank On Yourself vs. savings account” contest.  They confirmed – once again – that we have a whole bunch of very smart subscribers!

The contest even inspired one reader to write a poem!

I’ve been studying these topics full time for nearly a decade now, and even I learned some new things.  So, whether you use the Bank On Yourself method or not, or you consider yourself to be an expert or a novice at understanding money and finances, you should read this!

You will undoubtedly learn some things you didn’t already know!

There were so many great contest entries, it was really tough for our team to single out only the five best entries, and the winners of the iPod Touch, gift certificate and more are listed below.

The contest question was:  How is dividend-paying whole life insurance different from a savings account, besides the death benefit?

Our readers gave a dozen or so distinct, key differences between the two, and I’ll summarize a number of them in a moment.

However, I think one really critical advantage of a dividend-paying whole life policy wasn’t mentioned…

Many retirees today can’t stomach the volatility or unpredictability of investing in stocks and other traditional investments and were counting on their interest income from CD’s, money markets and savings accounts.

Senior Worker - Coffee Server
Most Americans today have NO clue when or even if they’ll ever be able to retire!

Unfortunately, they made their plans based on assumptions, NOT guarantees.

Few retirees anticipated interest rates being around 1% for an extended period of time, which is the reality they’re facing today.  And the impact is catastrophic…

Let’s say you have $500,000 saved up, and your plan was to live off the interest when you’re retired, so you don’t have to draw down your savings.  And, like many people, you may have based your assumptions on being able to get an average of 5% interest per year.  That means you anticipated your savings throwing off $25,000 a year.

But “reality” didn’t live up to your best-laid plans.  Now you’re 70, and, at 1% annual interest, you’re only getting $5,000 a year, NOT the $25,000 you had planned on.

Senior Worker - Coffee Server Most Americans today have NO clue when or even if they’ll ever be able to retire!

Unfortunately, you’re faced with several choices, none of them very pleasant – give up any luxuries and probably some things you consider necessities, go back to work, and/or cash in some of your savings.

If you need to eat into your principal and you have to withdraw $20,000 to make up the difference, well, that’s $20,000 you’ll NEVER be able to earn a dime on again!

It wasn’t “supposed” to work out this way, but you never had any guarantees!  Just like you  have no guarantees when you’re investing your retirement savings in stocks, real estate and other traditional investments.

As a result, most Americans today have NO clue when or even if they’ll ever be able to retire!

Shockingly, the average family headed by a person between 60 and 70 years old has only 25% of the amount they’ll need for retirement saved up! (Source:  October 2011 AARP Bulletin)

So, how does a dividend-paying whole life policy solve this dire problem?

These policies provide you guaranteed, predictable annual increases that are the largest when you need it most – retirement!

If you use the Bank On Yourself method, then you knowright now – what your guaranteed annual increase will be when you’re 75.  And when you’re 80, 95, or 100 – or in ANY given year.

In addition, you KNOW that your guaranteed increase gets larger each year, which also gives you some protection from inflation.

And this critical difference between Bank On Yourself and EVERY other savings or investing product or strategy changes absolutely everything for you between now and the end of your life!

And that’s a big part of the reason so many of the contest entrants also expressed such gratitude for their Bank On Yourself plans.


Do you want to add guarantees and predictability to your financial plan? The Bank On Yourself method comes with more advantages and guarantees than any other method we know of. It’s an asset class that has never had a losing year in more than 160 years! If you haven’t already started to Bank On Yourself, today is the day to request your FREE Analysis and find out how to gain peace of mind and take back control of your financial future!

Many of the contest entries pointed out other key differences between dividend-paying whole life (“DPWL”) and a savings account, including…

  1. Savings accounts pay a variable (read:  unpredictable) interest rate.

    To keep it very simple, DPWL policies pay you a guaranteed annual cash value increase. PLUS, you have the potential to receive dividends.  Dividends aren’t guaranteed, but the Bank On Yourself Professionals only recommend companies that have paid dividends every single year for at least 100 years.

    DPWL dividends aren’t calculated like any other kind of dividends.  They are credited based on the death benefit of your policy.

    Key difference imageKey Concept:  The ONLY way you could receive just the guaranteed annual increase is if the insurance company stopped paying dividends now and never paid you a single dividend until the day you die.

  2. You can spend or invest the equity in your policy and the policy keeps growing as though you never touched a dime of it! With a savings account, when you withdraw funds, they no longer earn any interest.

    NOTE – only a handful of insurance companies offer policies with this feature, in addition to all the other features required to maximize the power of this concept – another reason to be sure to work with a Bank On Yourself Professional who knows which companies to use and can structure your policy to maximize the growth and minimize your taxes.

    To get a referral to one of only 200 financial representatives who have met the rigorous requirements to be a Professional, request your free Analysis now.

  3. You can borrow your equity in the policy without having to apply or qualify for it, and you can’t be turned down for a loan!  Plus, you can pay it back on your own schedule, not someone else’s.

    If you borrow from a savings bank using your account as collateral, you have to go through an approval process, and you must pay it back on a pre-arranged schedule.  You’ll be charged a penalty if you’re late making a payment.  Many banks will only allow you to borrow up to 50% of your account value, and they can seize your money to cover your loan in full, if you miss a payment.

  4. Financial Foundation
  5. You can immediately withdraw 100% of the money you put into a savings account.  As noted by one contest entrant, Dan Proskauer, “This is not true for dividend-paying whole life.  It’s a long-term commitment, and if you liquidate it early, you will lose capital.”  (Dan isn’t a financial representative, but he knows more about this than most experts do.  Dan shared his fascinating story on this blog, and I encourage you to check it out.)

    And that is what I’m referring to when I say that Bank On Yourself isn’t a “get-rich-quick” scheme.  It takes some patience and discipline.  But for those who have those traits, it pays a lifetime of rewards and provides you with more advantages and guarantees than any other financial product or strategy.

  6. Financial Foundation
  7. Interest you earn from a savings account is taxable at the federal and usually state level, too.

    It’s possible to access the growth in a DPWL policy with no taxes due, under current tax law.  This happens through the proper combination of dividend withdrawals and loans against your cash value.

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  9. Life insurance companies are far more regulated than savings banks.  Unlike banks, which can loan out every dollar ten times, life insurance companies can’t do that.  They are legally required to maintain sufficient reserves to pay future claims.

    Learn more about the multi-layer safety net for life insurance companies here.

  10. DPWL provides asset protection benefits for both your cash value and death benefit in many states.  (Check with a professional on the rules for your state.)

    And that sums up the biggest differences listed by subscribers between dividend-paying whole life and a savings account.

    You may also be interested in learning what the rate of return is on a properly designed Bank On Yourself-type policy.

    For these reasons – and many more – I know of no better place to park your money than in a properly designed Bank On Yourself-type policy.

Get Your FREE Report!

Get instant access to the FREE 18-page Special Report, The Ultimate Wealth-Building and Retirement Strategy, plus timely briefings and solutions to critical news and events that may impact your money and finances.

We respect your email privacy

And I’ll pay you $100,000 to prove me wrong!

That’s right!  My offer to pay $100K to the first person who can show they use a different strategy that can match or beat Bank On Yourself still stands – nearly three years after I first threw out the gauntlet!

Are you up to the Challenge?

Go ahead – I dare you to take the Challenge!

Are you up to the Challenge?

Bank On Yourself is the best sleep-through-the-night financial security blanket I’ve come across after researching over 450 different financial products and strategies over the past 20 years.

Don’t you owe it to yourself and your family to at least find out what your bottom-line numbers and results could be if you added Bank On Yourself to your financial plan?

Stop hoping and start knowing what your financial future will be!

It’s easy to find out when you request your FREE Analysis.  Please do it today, if you haven’t already!

And now for our contest winners…

Contest Winner

As I mentioned, there were so many terrific entries, it was hard to pick out only five winners.

Contest Winner

But here they are (all are being notified by email that they have won)…

  1. The iPod Touch winner is Michael S.  Michael brought out some of the advantages business owners can get by financing business purchases with Bank On Yourself.

    Michael also confessed to occasionally forgetting all the advantages he’s getting from his three policies (something other readers can relate to, I’m sure) and how reading this blog and reviewing his policy statements and information “reminds me of all the benefits to stay with the plan.”

  2. The $100 Gift Certificate winner is Craig Yenni, who was inspired to write this delightful poem!

Here are the three winners who will each receive their choice of a $25 Dining Gift Certificate or a personally autographed copy of my best-selling book:

  1. Rose Hillbrand, who made several helpful comments not only in this contest, but also on other blog posts over the last several years.

    Rose was an “early adopter” of the Bank On Yourself wealth-building method.   Her story – captured on video – is very moving.  Check it out here.

  2. Gentry Eddings, who pointed out the problems with the reserve requirements for banks and the pitfalls of FDIC insurance for banks.
  3. Kevin C. also wins for figuring out that he could search this website for comments I’ve made comparing DPWL to a savings account.  (I didn’t even remember saying the quote he found.  And I’ve now tweaked it in this blog post.  Thanks, Kevin!)

And thanks so much to everyone who participated!

Did you learn something new from this contest and post?  Let us know in the comments box below…


  1. I’ve been learning about BOY and definitely am interested and intrigued. I have a meeting for my analysis next week. I’m not great with numbers, so I’m trying to understand the following scenario:
    Say I go on a $2000 vacation. Isn’t it better for me to pay cash and enjoy it rather than borrow $2000 from my policy and then pay it back with interest? Borrowing $2000 for the vacation and paying it back is like spending $4000 plus interest for the vacation instead of $2000, isn’t it? Or am I not getting it???

    • Michael, don’t feel bad about not understanding this – it’s hard for lots of people.

      Rather than directly answering your question I’m going to answer it with a question: If you take $2,000 out of a savings account to pay for a vacation and you don’t pay it back, how will you every be able to pay for your NEXT vacation?

      Think about it, discuss it with your financial representative, and reread this blog post.

      Also, reading this article will help:


      • This is one of the points I don’t get. I currently have a BOY policy but also a savings account. Why pay the 5% interest on a loan when I can just pay cash as it accumulates. I guess with the monies I’m directing into the saving you’d recommend getting a second policy and I guess that’s true but my savings are sporatic. I save when I know I may need something, vacation, vehicle etc. So for me having both seems a way to avoid the BOY loans. Perhaps the dividends outweigh the interest loan although I can’t see how that’s possible. If I’m in err than as a current policy holder who believes in the product I’d certainly reconsider. I just haven’t seen having both a BOY and a savings account plan for bigger purchases recommended

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