Top 10 Pros and Cons of Infinite Banking Using Life Insurance – I&E

By Taaza Facts

Published on:

Top 10 Pros and Cons of Infinite Banking Using Life Insurance – I&E


In this comprehensive guide of the infinite banking concept, we share our experience and insights into how to apply for and design an effective Infinite Banking policy, weighing its pros and cons, and exploring real-world applications in areas like real estate investments and debt relief. We also share our 70 plus years of combined experience in selecting the best Infinite Banking companies, as we lay the educational groundwork for you to be your own banker using life insurance.

 Infinite Banking Concept Comprehensive Guide

Table of Contents

  1. Key Takeaways
  2. What is the Infinite Banking Concept?
  3. How to Qualify for Infinite Banking
  4. How to Structure an Infinite Banking Whole Life Policy
  5. Comparing Infinite Banking with Traditional Bank Savings
  6. Pros of the Infinite Banking Concept
  7. Cons of the Infinite Banking Concept
  8. Infinite Banking Examples
  9. 10 Steps to Set Up Infinite Banking
  10. Best Infinite Banking Companies
  11. Conclusion & Next Steps

1. Key Takeaways

  • Coined by Nelson Nash, the Infinite Banking Concept involves using a whole life insurance policy designed for high cash value as your personal banking system to get out of debt and buy assets, all in a tax favored vehicle.
  • An infinite banking whole life insurance policy is from a mutual insurance company, structured with a paid-up additions rider to maximize cash value growth.
  • A unique benefit is that when you borrow against the policy’s cash value to purchase investment opportunities, you are still earning compound interest on your entire cash value account balance, while earning a return on your investment opportunity, making your dollars work for you in two places at once.
  • Pros include non-correlation with the stock market, improved cash flow and liquidity, personal family financing, tax advantages, creditor protection, financial leverage, and privacy.
  • Cons include potential cost prohibitions, mandatory annual payments, creditor protection variances, the need for discipline, and qualification requirements.
  • Steps to start infinite banking and become your own banker include gaining education, setting financial goals, consulting with a professional, choosing the right policy, funding the policy, using it to finance purchases, and repeating the process.

2. What is the Infinite Banking Concept?

The Infinite Banking Concept, coined by Nelson Nash in his book Becoming Your Own Banker: Unlock the Infinite Banking Concept, involves using a high cash value whole life insurance policy as a personal banking system, rather than a traditional bank savings account. The infinite banking whole life insurance policy is designed to maximize cash value growth versus traditional whole life which focuses on securing a large initial death benefit.

This book [Becoming Your Own Banker] demonstrates that your need for finance, during your lifetime, is much greater than your need for protection. – N. Nash

The Infinite Banking Concept has taken on a lot of other names, such as cash flow banking, private family banking, bank on yourself, perpetual wealth strategy, becoming your own bank, circle of wealth, and perpetual wealth system but they all refer to the same idea of being your own banker.

The primary benefit of using whole life insurance for infinite banking is it provides a contractual asset with guaranteed tax deferred growth and tax free access to your money, that you can pass your finances through, acting as a wealth building conduit, rather than using a typical bank savings account or money market account where your gains are taxed, the interest rate is not guaranteed, and you cannot use your cash as collateral.

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