You may want to talk to a financially advisor who actually knows about this kind of thing.

Red flags start going off for me when people start talking about free money. "Infinite Banking" couldn't sound more suspicious to me. And why is it in your name and not theirs?

the first article was originally published in the german edition of the epoch times, so those are some pretty big alarm bells ringing. hope you figure this out, comrade.

I have no answers but I understand why you are scared. This looks like a financial hack (in the computer sense) and often the people who try these tricks are in over their heads. Hopefully someone who knows more about these financial instruments can chime in.

from what i understand about how this works, you fund a certain type of life insurance policy that has a cash value component to it. once you've accumulated a certain amount of cash value in the policy, you are allowed to take out loans against the policy. however, you are still paying premiums on the insurance, and it is a loan that accrues interest. if you borrow too heavily, the policy can lapse. unpaid balances also reduce the death benefit from the policy. over funding too aggressively can also expose you to something called modified endowment contract status, which may cause the income from the loans to be taxable. none of this is financial advice, if you don't feel comfortable with your parents involving you in this, i would tell them that.

Without being an expert and this might only apply to my country and not yours:

Over here, banks are basically giving you no interest for deposits (it was supposed to be a temporary measure during the economic crisis years, but through collusion and corruption, they've managed to keep it going for nearly a decade now). So a lot of people do this kind of thing instead. It sounds shady as fuck to me, but but half the people I know have this insurance scheme going on.

From what I understand, it's something between betting on a stock and investing in an investment fund. But instead of a stock it's your death (or injury, depending on the policy). The insurer gives you a price. That's their bet that you are going to die or whatever. They also give you an end-date to the bet (maturation). If you live, you get the prize. If you don't, someone else gets the prize (I'm quite uncertain who that is; if it goes to someone you name, like regular life insurance, or if it goes to the insurer instead). Then you pay them money every month/term/year that is a certain proportion of the price. This money is filling up to the price you agreed beforehand.

The money that accumulates in the insurance fund technically belongs to both you and the insurer, but the insurer has the rights to use them in "financially responsible ways" to make more investments and accumulate interest, which is paid back into the fund (and from what I understand, the insurer is entitled to a part of this interest as payment for their services).

Unlike a regular investment fund, you are not allowed to pull back your money from this fund (or you are, but you have to pay a heavy penalty depending on how much is left for the insurance to mature), but you are allowed to borrow against the sum. When you borrow, you still have to pay back like a regular loan, but the money returns to the fund. The interest on the loan goes fully to the insurer though (or partly? not sure).

Every few years, when the insurance matures, you get to either renew the insurance (current or new terms) or pull back the money.

Here's where it gets shady: There might be limitations on how you use any loans you make, there might be a bunch of extortionate fees and penalties for being late in payment or taking loans, the lion's share of the interest being accumulated goes to the insurer, you and your family might lose the money if you die/injure yourself/get sick too early before maturation, and worst of all, the insurance fund has no guarantee. Meaning that money in the bank are usually guaranteed up to a certain amount (so if the bank goes belly-up, you still get back your money). But since this insurance fund is not guaranteed, if something happens and your money disappears (the insurance company declares bankruptcy, economic collapse, etc) it's just gone forever.

I'd suggest you go and talk to a financial expert about this (depending on the laws in your area, the insurer might actually be obliged to put you in contact with a financial expert out of their own pocket if you ask for it). Also make things clear with your parents. Is this their way of setting up something for you, or are they just using your name for their own financial purposes? Because if it's the latter, then you would probably be legally responsible if anything untoward happens. In either case, if you don't like this being done in your name, then you should tell them you are not going to be a part of it.

Talk to a financial advisor or something.

If it is an life insurance insurance policy they will have set things up so that they on average earn an average profit. If anyone could find a loophole to circumvent this and "win" then they would do so, not share tips about it online. At best it is some kind of loan against some kind of dividends on that loan. By nature the taker of a loan loses money unless they invest it in a venture with a higher rate of profit than the rent on capital (or at least circumvent an even larger loss equivalently).

If the matter is actually actually investing large amounts of money the answer is almost always index funds at some risk level with some proportion of the capital in international bond funds.

Not financial advice though but I would seek out an expert.