How Much Does IBC Cost? A Realistic Breakdown

“How much does IBC cost?” is the most common question new people ask. It’s also the wrong question — because it starts from the wrong frame.

When a store owner stocks inventory, they don’t call it a “cost.” They call it capitalization. They’re putting money into the system so the system can generate returns. The inventory sits on shelves, gets sold, produces revenue, and the owner restocks. The money flows through a cycle that creates value.

IBC works the same way. The premium isn’t an expense you pay and forget about. It’s capital you’re depositing into your private banking system — capital that grows, that you can borrow against, that earns dividends, and that ultimately transfers to your family tax-free.

Ryan Griggs puts it directly: “The problem is the problem. The solution is the premium.” You don’t solve the economic problem of your life — the interest you pay to others, the capital you don’t control — by avoiding the premium. The premium is the solution.

Typical Premium Ranges

There’s no one-size-fits-all answer. IBC policies are custom-designed based on your age, health, income, and financial goals. That said, here are realistic ranges:

• Entry level: $300–$500/month ($3,600–$6,000/year)
• Mid-range: $500–$2,000/month ($6,000–$24,000/year)
• Higher capitalization: $2,000–$5,000+/month ($24,000–$60,000+/year)

The “right” amount depends on what you can commit to consistently over time. IBC is a long-term strategy — it works best when premiums are steady and sustainable. Starting smaller and increasing later is better than overcommitting and struggling to maintain the policy.

How the Premium Is Structured

This is where IBC policy design differs dramatically from traditional whole life. A standard whole life sale maximizes the base premium (and the agent’s commission). An IBC-designed policy flips the ratio:

• ~40% Base Premium — This is the foundation. It covers the death benefit, the guaranteed cash value growth, and the insurance company’s costs. This is also where agent commission is calculated.
• ~60% Paid-Up Additions (PUA) — This is the accelerator. PUA dollars buy small chunks of fully paid-up insurance that immediately create cash value. PUAs carry minimal agent compensation and maximum cash efficiency.

The PUA component is what makes IBC work. It’s the engine that builds accessible cash value quickly. Without it, you’d have a traditional whole life policy — fine, but not optimized for banking.

The exact split varies by design, but the principle is consistent: maximize PUA, minimize base, stay under the MEC limit. The Modified Endowment Contract (MEC) line is a legal boundary — cross it, and you lose the tax advantages. A properly trained practitioner designs the policy to ride as close to that line as possible without crossing it.

The First 5 Years: Building the Foundation

This is where most people get discouraged — and it’s where understanding the concept makes all the difference.

In the early years of an IBC policy, your cash value will be less than your total premiums paid. This is normal. This is expected. This is how the product works.

Think of it like building a house. In year one, you’ve got a foundation and framing. It doesn’t look like a house yet. You can’t live in it. But without that phase, you’d never have a house at all.

Here’s what’s happening during those first years:

• The insurance company is covering the cost of establishing your policy
• Your base premium is building the guaranteed foundation
• Your PUA dollars are creating immediate cash value (often 90–95 cents of accessible value per dollar contributed)
• Dividends are beginning to compound
• Your death benefit is growing

By year 3–4, your cash value typically reaches 70–85% of total premiums paid. By year 5–7, most properly designed policies cross the break-even point — your cash value equals or exceeds total premiums. From that point forward, the system accelerates.

Year 5 and Beyond: The Acceleration Phase

This is where IBC becomes powerful. After the foundation is built:

• Cash value exceeds total premiums paid and the gap widens every year
• Dividends compound on an ever-growing base
• Policy loans become increasingly useful as your available capital grows
• The death benefit continues climbing — especially with PUA contributions
• The velocity of money kicks in: you borrow, deploy, repay, and repeat

By year 10–15, many policyholders have cash value that significantly exceeds their total contributions. By year 20–30, the multiple can be substantial. And because the growth is tax-free, the effective after-tax return is higher than the nominal rate suggests.

The system doesn’t just grow — it compounds. And it compounds uninterrupted, even when you take policy loans. This is the feature no other financial vehicle replicates.

What You’re Actually “Buying”

When you pay a premium into an IBC-designed policy, you’re not paying for just life insurance. You’re capitalizing a system that provides:

1. A private banking system — capital you control, access on your terms, and deploy as you see fit
2. Guaranteed growth — cash value increases every year, contractually guaranteed, regardless of markets
3. Tax advantages — tax-deferred growth, tax-free access via loans, tax-free death benefit transfer
4. A death benefit — the ultimate self-completion mechanism and wealth transfer tool
5. Creditor protection — in many states, cash value is protected from creditors and lawsuits
6. Uninterrupted compounding — your money works in two places at once when you take policy loans

No other single financial tool delivers all six simultaneously.

Compared to What?

Here’s the question that reframes everything: what does your current banking relationship cost you?

Add up every dollar of interest you’ve paid — or will pay — over your lifetime:

• Mortgage interest: On a $350,000 home at 6.5% for 30 years, you’ll pay roughly $446,000 in interest alone — more than the house itself
• Car loans: The average American buys 8–12 cars in a lifetime. At $500/month for 5 years per car, that’s $30,000+ in interest per vehicle
• Student loans: The average borrower pays $26,000+ in interest over the life of their loans
• Credit cards: At 20%+ APR, revolving balances drain wealth faster than almost anything else
• Business financing: Equipment loans, lines of credit, SBA loans — all with interest flowing to someone else

Over a lifetime, the average American pays hundreds of thousands of dollars in interest to commercial banks and lenders. That money is gone. It built someone else’s banking system.

IBC says: what if you captured that interest for yourself? What if, instead of making car payments to Toyota Financial, you made them to your own policy — and the interest stayed in your system, compounding for your benefit and your family’s benefit?

The “cost” of IBC isn’t the premium. The cost is what you’re already paying to commercial banks — and that cost is invisible only because you’ve never added it up.

Getting Started

The first step isn’t buying a policy. It’s understanding the concept. Read Becoming Your Own Banker by Nelson Nash. Explore the resources on this site. Learn how the banking function works before you worry about premium amounts.

When you’re ready to design a policy, work with a practitioner who understands IBC specifically — not just any insurance agent. The design matters enormously. A policy built for maximum death benefit (traditional sale) and a policy built for maximum cash efficiency (IBC design) look completely different, even if they’re issued by the same company.

The premium isn’t a cost. It’s the price of admission to a system that works for you — guaranteed, tax-advantaged, and under your control — for the rest of your life.

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This article is for educational purposes only. IBC Academy does not sell financial products or provide financial advice.