Protection comes first
The underlying policy provides a death benefit and cash value under its contract terms.
Cash-value life insurance strategies
Infinite Banking
Understand the policy before building the strategy.
Explore how cash value and policy loans work, and whether the funding commitment fits your goals.
The short answer
What it is and why families consider it
Infinite banking is a strategy using cash-value life insurance and policy loans, commonly with participating whole life. It takes time and funding to build accessible cash value. Loans come from the insurer, accrue interest, and affect the policy. It is not a bank account or a guarantee of unlimited borrowing.
Funding matters
Premiums, policy design, expenses, and time determine how much value is available to borrow against.
Loans need management
Loan interest and outstanding balances affect available value and the benefit your beneficiaries receive.
How the strategy works
Build cash value. Review the loan provisions.
A participating whole life policy may include guaranteed values and non-guaranteed dividends. Cash value grows according to the contract; it does not equal every premium dollar paid. Dividends are not guaranteed.
Once sufficient loan value exists, the insurer may lend against the policy. Before borrowing, review the interest rate, repayment approach, and effects on benefits. A loan that grows beyond the policy’s ability to support it can put coverage at risk.
- A sustainable premium commitment
- Guaranteed and non-guaranteed illustrations
- Available loan value and loan interest
- Regular policy and loan reviews
Compare the approaches
Infinite banking and IUL are different conversations.
IUL is a type of permanent insurance with index-linked crediting and flexible funding provisions. Infinite banking is a strategy, commonly using participating whole life. Neither term alone tells you whether a particular policy fits your situation.
We help you compare the actual guarantees, costs, cash-value projections, loan terms, and long-term commitments. Loans and withdrawals can reduce benefits, and a lapse or surrender with an outstanding loan may have tax consequences.
Common questions
Answers before you apply
Coverage, pricing, and eligibility are determined by the carrier and the policy contract.
Can I borrow the full death benefit?
No. Borrowing is limited by the available loan value under the policy contract, not the full death benefit.
Are policy loans interest-free?
No. The insurer charges interest under the policy’s loan provisions. Unpaid interest can increase the outstanding balance.
Is all of my premium immediately available?
No. Expenses, policy design, and funding affect cash value. Review early-year surrender and loan values before applying.
Are dividends guaranteed?
No. Participating whole life dividends are non-guaranteed. Review guaranteed values separately from illustrated dividends.
How do I know whether it fits?
Start with your protection needs, funding capacity, liquidity needs, and timeline. Ask for an individualized illustration and review the contract’s loan provisions.
Personalized guidance