The Glossary of Money You Were Never Taught
Clear, plain-English definitions of every term behind the U Account and the Infinite Banking Concept — so you can think (and bank) like the wealthy.
compound interest
Interest calculated on both the initial principal AND all previously accumulated interest. The longer you wait, the faster your money grows.
true compound interest
Interest that continues to grow on your original principal even when you withdraw or use the money — a feature unique to the U Account.
pia
Primary Insurance Amount — the monthly Social Security benefit you'd receive if you claim at your full retirement age (67 for most people).
401k
An employer-sponsored retirement account where contributions are pre-tax. You pay taxes when you withdraw in retirement. Subject to Required Minimum Distributions (RMDs).
rmd
Required Minimum Distribution — the IRS forces you to withdraw a minimum amount from your 401k/IRA each year starting at age 73, whether you need it or not.
tax-free
No taxes owed on growth or withdrawals. The U Account provides tax-free income in retirement, unlike a 401k.
4% rule
A retirement guideline suggesting you can safely withdraw 4% of your nest egg per year without running out of money over 30 years.
death benefit
A lump-sum payment made to your beneficiaries when you pass away. The U Account's death benefit passes to your heirs tax-free.
dividend
A share of profits paid to policyholders by a mutual insurance company. U Account dividends are not guaranteed but have been paid consistently for over 100 years by top carriers.
waterfall method
The U Account's generational wealth strategy — your children repeat the process, their children repeat it again, creating multi-millions within one family lineage.
infinite banking
A concept of using a whole life insurance policy as your own private bank — borrowing against your cash value while it continues to compound uninterrupted.
whole life insurance
Permanent life insurance that provides coverage for your entire life and builds guaranteed cash value. When structured for Infinite Banking, it's designed to maximize cash value rather than death benefit.
term life insurance
Life insurance that covers you for a fixed period (e.g., 20 years) and builds no cash value. Pure protection with no wealth-building component.
cash value
The savings component of a whole life policy that grows tax-free over time. You can borrow against it, use it as collateral, or access it while the underlying policy keeps compounding.
overfunding
Contributing more than the minimum premium into a whole life policy (via Paid-Up Additions) to accelerate cash value growth — the engine behind Infinite Banking.
paid-up additions (pua)
Single-premium mini-policies added to a whole life contract that immediately increase both cash value and death benefit, accelerating compounding.
policy loan
A loan you take from the insurance company using your cash value as collateral. Your full cash value keeps earning guaranteed interest and dividends while you use the money.
mutual insurance company
An insurer owned by its policyholders, not Wall Street shareholders. Profits are returned to policyholders as dividends — the foundation of the Infinite Banking strategy.
non-direct recognition
A policy feature where the carrier continues to pay interest and dividends on your full cash value even when you've borrowed against it — so your money keeps compounding uninterrupted.
recapture
Reclaiming money you'd normally hand to a bank or finance company. With Infinite Banking, loan repayments go back into YOUR policy, not a lender's pocket.
liquidity
How quickly you can access your money without penalties. Cash value in a properly structured policy is accessible within days, with no credit check or qualification.
tax-deferred
Growth that isn't taxed until you withdraw it. Whole life cash value grows tax-deferred, and policy loans are generally tax-free.
living benefit
Access to your policy's value while you're alive — through loans, withdrawals, or accelerated benefits — as opposed to a death benefit paid after you pass.
mec
Modified Endowment Contract — a policy funded past IRS limits, which loses favorable tax treatment on loans. We design every policy to stay well below the MEC line.
guaranteed interest
The minimum interest rate a whole life contract credits to your cash value every year, set in the contract and backed by the carrier's reserves.
net worth
Everything you own minus everything you owe. The U Account is designed to expand net worth by converting interest payments you'd lose into wealth you keep.
opportunity cost
The return you give up when money sits idle or flows to someone else. Infinite Banking minimizes opportunity cost by keeping your capital working at all times.
velocity of money
How many times a single dollar circulates and earns for you. The U Account maximizes velocity by reusing the same dollar to earn interest, finance purchases, and compound.