How Infinite Banking Works

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Infinite Banking revolves around the cash value component of a whole life insurance policy. 

Here’s a step-by-step overview of how it works:

Purchase a dividend-paying whole life insurance policy: To begin practicing Infinite Banking, you’ll first need to purchase a whole life insurance policy from a reputable, financially strong mutual insurance company. It’s crucial to choose a policy with a focus on building cash value quickly.

Pay premiums and build cash value: As you pay premiums, the cash value of your policy will grow. Part of your premium goes towards the death benefit, while the rest is allocated to the cash value, which grows tax-deferred. Over time, your cash value will accumulate, becoming a significant financial resource.

Borrow against the cash value: Once you’ve built up enough cash value, you can start borrowing against it in the form of policy loans. These loans are typically tax-free and do not require credit checks, as you’re essentially borrowing from yourself. The interest rates on policy loans are generally lower than traditional loans, and you have the flexibility to set your repayment terms.

Repay the loan: As you repay the policy loan, you’re essentially “paying yourself back” with interest. This replenishes the cash value of your policy, allowing you to continue borrowing against it in the future.

Repeat the process: The Infinite Banking Concept is a cycle of borrowing and repaying policy loans, using the cash value of your whole life insurance policy as a personal financing tool. As long as you continue to manage your policy effectively, you can use this strategy to finance various expenses and investments throughout your life.

Real Estate

Infinite Banking with a whole life policy can be an effective way to finance the purchase of real estate while potentially taking advantage of arbitrage opportunities. 

Here’s an example of how you could use your whole life policy to buy real estate:

Establish a dividend-paying whole life policy with a mutual insurance company. Ensure the policy is structured to optimize cash value growth, which may involve selecting a high early cash value rider or opting for a paid-up additions rider. Pay premiums consistently to build up the cash value over time.

Once you have accumulated a significant cash value in your policy, identify a real estate investment opportunity, such as a rental property or a fix-and-flip project.

Take a policy loan from your whole life insurance policy for the amount needed to purchase the property. This loan will be secured by the cash value in your policy, and you can access the funds without incurring taxes or penalties.

Use the policy loan to finance the purchase of the real estate property. Since you’re “borrowing” from your policy, you’ll be paying interest on the loan. However, this interest goes back into your policy, and you retain control over the repayment schedule.

Rent out the property or complete the necessary renovations and sell it for a profit. Use the rental income or sale proceeds to repay the policy loan, including the interest.

Arbitrage opportunities may arise in this process when the investment returns from the real estate property are higher than the policy loan interest rate. 

For example, if the policy loan interest rate is 5%, and the net returns on your real estate investment are 8%, you have effectively earned a 3% arbitrage on your investment. This additional profit can be used to further grow your wealth or repay the policy loan faster.

As you repay the policy loan, the cash value in your whole life policy is replenished, allowing you to repeat the process for future real estate investments.

By using Infinite Banking to finance real estate investments, you can effectively become your own banker, maintain control over your funds, and potentially benefit from arbitrage opportunities when the returns on your investment exceed the policy loan interest rate. 

This strategy allows you to leverage the cash value of your whole life policy while still enjoying the policy’s guarantees, tax advantages, and potential dividend payments.


Business owners can use the Infinite Banking concept with a dividend-paying whole life insurance policy to grow their business by leveraging the cash value for various financial needs. 

Here are some ways business owners can use Infinite Banking for business growth:

Financing business expansion: Business owners can take policy loans from their whole life insurance policy to finance expansion projects, such as purchasing new equipment, acquiring additional office space, or opening new locations. This approach offers more flexibility and control over repayment terms compared to traditional bank loans.

Funding working capital needs: Businesses often have short-term working capital needs, such as paying for inventory, payroll, or unexpected expenses. By accessing the cash value in their whole life policy through policy loans, business owners can cover these needs without relying on high-interest credit lines or loans.

Business opportunities: Infinite Banking allows business owners to take advantage of investment opportunities when they arise. By using policy loans to fund new ventures, acquisitions, or joint ventures, business owners can grow their business without sacrificing control or incurring additional debt.

Providing key person insurance: Whole life insurance policies can be used to insure key employees or partners, protecting the business in the event of their untimely death. The policy’s death benefit can provide a financial cushion to help the business transition and recruit a suitable replacement.

Buy-sell agreements: Business owners can use whole life insurance policies to fund buy-sell agreements, ensuring that the business can continue operating smoothly in the event of a partner’s death or departure. The policy’s death benefit can be used to buy out the deceased partner’s share, providing liquidity and stability for the business.

Employee benefits and retention: Offering whole life insurance policies as part of a comprehensive employee benefits package can help attract and retain top talent. Business owners can also implement split-dollar or executive bonus arrangements, which use whole life insurance policies to provide additional benefits to key employees.

Tax advantages: Whole life insurance policies offer tax-deferred growth of cash value, tax-free policy loans, and tax-free death benefits. These tax advantages can help business owners manage their cash flow more effectively and maximize the funds available for business growth.

By using the Infinite Banking concept, business owners can leverage the cash value of their whole life insurance policies to access capital, provide financial stability, and support business growth. This strategy offers a high degree of flexibility and control, allowing business owners to make financial decisions based on their unique needs and circumstances.

Business owners can use infinite banking for cash flow management in several ways:

Build a cash reserve: By consistently paying premiums on a whole life insurance policy, business owners can accumulate cash value that serves as a tax-advantaged cash reserve. This can be accessed for various business needs, such as financing investments, managing unexpected expenses, or covering operational costs during lean periods.

Access tax-free loans: Policyholders can borrow against the cash value of their life insurance policies tax-free, providing an additional source of capital for the business. The policy loans can be used to finance business expansion, purchase equipment, or meet any other cash flow needs. Borrowing against the policy allows business owners to avoid the lengthy and sometimes difficult process of applying for traditional bank loans.

Repay loans at a flexible pace: Infinite banking allows business owners to repay policy loans on their own terms, without a fixed schedule or pre-determined interest rates. This flexibility can be advantageous for managing cash flow, as businesses can repay loans when it is most convenient and financially feasible.

Maintain control over capital: Since infinite banking utilizes the cash value within life insurance policies, business owners maintain control over their capital. This reduces reliance on traditional lenders and enables entrepreneurs to make financial decisions in the best interests of their businesses.

Protect business assets: Whole life insurance policies not only provide a financial tool for cash flow management but also offer death benefits. These benefits can be used to support the business in the event of the owner’s passing, ensuring continuity and financial stability.

Tax advantages: The cash value growth within whole life insurance policies is tax-deferred, meaning that it accumulates without incurring taxes until it is withdrawn. Additionally, policy loans are generally tax-free as long as the policy remains in force.

Family Banking

Infinite Banking can also be used to create a “family bank” that allows you to build wealth within your family, provide financial support to family members, and pass on a financial legacy to future generations. 

Here’s a step-by-step guide on how to establish a family bank using the Infinite Banking concept:

Establish a dividend-paying whole life insurance policy: Work with a knowledgeable financial professional to set up a whole life insurance policy with a mutual insurance company. Ensure the policy is structured to optimize cash value growth by selecting riders such as a high early cash value rider or a paid-up additions rider. Pay premiums consistently to build up the cash value in your policy.

Teach family members about Infinite Banking: Educate your family members about the concept of Infinite Banking and the benefits of using whole life insurance policies as a financial management tool. Encourage open communication and provide resources to help them understand the benefits and potential applications of the family bank.

Set guidelines for accessing the family bank: Create clear guidelines and expectations for how family members can access the funds within the family bank. Establish criteria for borrowing, such as providing a business plan, demonstrating financial responsibility, or outlining the purpose of the loan.

Use policy loans to support family members: When a family member needs financial assistance or wants to invest in an opportunity, you can take a policy loan from the whole life insurance policy’s cash value. This loan can be used to help finance education, business ventures, real estate investments, or other personal needs.

Repay the policy loans: Encourage family members to repay the policy loans, including interest, over a predetermined time frame. This repayment helps replenish the cash value in your policy, ensuring that funds are available for future family members to access.

Expand the family bank with additional policies: As your family grows, consider establishing additional whole life insurance policies on family members, including spouses, children, and grandchildren. This approach allows you to expand the family bank, build wealth across generations, and provide financial support to multiple family members.

Pass on a financial legacy: Whole life insurance policies not only serve as a foundation for the family bank but also provide a death benefit that can be passed on to your beneficiaries tax-free. This benefit ensures that your family’s financial legacy continues and provides financial support to future generations.

By using Infinite Banking to create a family bank, you can leverage the cash value of whole life insurance policies to provide financial support to your family members, foster a sense of financial responsibility, and pass on a financial legacy to future generations. This approach offers flexibility, control, and long-term financial stability for your family.

There are so many strategies where you can utilize Infinite Banking for, real estate, business and family banking are only three of them!

You can download the full report “Unlocking Your Infinite Banking Questions” here.

You can watch all of our educational videos on Infinite Banking here.

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The concept of infinite banking revolves around using a dividend-paying whole life insurance policy as a personal “bank.” This method allows individuals to borrow against