Unlocking Financial Freedom: The Infinite Banking Concept for Self-Employed Individuals

The Infinite Banking Concept for Self-Employed Individuals

It’s been a wild ride of economic uncertainties in the past few years. And if you are self-employed and trying to create wealth or protect your financial future, you are no doubt asking the same question as everyone else: “What Are Some Ways I Do That?” Enter Sue and Dave, a married couple in their mid-40s, who found a unique solution to secure their financial future while maintaining their cherished lifestyle. Their journey into the world of Infinite Banking is a testament to the power of strategic financial planning.

Lifestyle Business

Sue and Dave are the proud owners of a small “lifestyle” business. Their business, which centers around healthy living, generates an annual income of approximately $350,000. While this income allows them to lead the lifestyle they enjoy, they have no intention of expanding their business significantly. Sue is a dietician, and Dave is a health coach, together they empower people to adopt healthy eating habits, live well, and integrate fitness into their busy lives. It’s a perfect blend of work they are passionate about and quality time spent with their two young children.

One of the most significant financial commitments for Sue and Dave was their $250,000 mortgage. Instead of opting for traditional mortgage insurance, they took a unique approach by securing life insurance policies worth $300,000 on each other. This innovative move not only offered them a level of security but also demonstrated their forward-thinking approach to finance.

The Core Strategy of Infinite Banking

The core of their financial strategy lies in the concept of Infinite Banking. In essence, Infinite Banking involves utilizing a specially designed whole life insurance policy to create a personal banking system. This concept revolves around maximizing the cash value of your life insurance policy, allowing it to serve as a financial tool for loans, investments, and wealth accumulation. Sue and Dave’s journey into Infinite Banking is a testament to its versatility and potential to transform financial futures.

What sets Sue and Dave apart from the traditional banking system is the way they structured their life insurance policy paid for by their business. They opted for a Participating Dividend Paying Whole Life Insurance policy with paid-up additions (PUA). This way, their death benefit will continually increase as the years go by which, as it turns out, has several advantages.

Firstly, the business assumes the responsibility for paying the insurance premiums using lower-taxed corporate dollars. As a small business, this insurance expense also allows them to offset the HST (Harmonized Sales Tax) they collect. This strategic maneuver results in tangible savings and a reduction in the overall financial burden on their business.

Moreover, the premiums they pay into their life insurance policy are not lost expenses but serve to build equity. Over time, the cash value within the policy grows, making it a smart financial move for the couple. It essentially acts as a dual-purpose savings and investment vehicle.

Flexibility Is Key

The beauty of the Infinite Banking concept lies in its flexibility. Sue and Dave can leverage their life insurance policy in various ways. If they or their business ever require a loan, they can borrow it from the Long Term Life Insurance Policy. This means that, instead of turning to traditional banks or financial institutions, they can access their policy’s accumulated cash value. Importantly, they can set their own repayment terms, providing them with a level of financial autonomy that is often unattainable through conventional loans.

As their business flourishes and their income increases, they can effortlessly repay the loan. This way, they control their interest and build a financial future that aligns with their long-term goals. It’s a testament to how Sue and Dave have taken control of their financial destiny and harnessed the power of Infinite Banking.

What’s Your CIRP Strategy?

When the time comes, Sue & Dave have the option of turning this policy into a Corporate Insured Retirement Program (CIRP). This will supplement their retirement income where the cash value is used as collateral for a line of credit for a third-party bank loan. The borrowed funds are generally received tax-free by the corporation and the outstanding loan is not repaid until death. At this point in the life of the policy, the cash value is growing at its highest and fastest. All whole-life policies are contractually guaranteed to meet this benefit: the cash value must match the death benefit at age 100. So always increasing the death benefit using paid-up additions (PUA), forces the hand of the insurance company to increase the cash value more which must ‘race’ to catch up to the death benefit during this decreasing window of time left.

This way their cash value continues to grow uninterrupted inside the policy and thus, is an increasing base to draw from.  This puts this strategy in contrast with retirement funds that require recipients to withdraw their cash, such as with an RRSP which might be something to consider.

Long Term Security

Sue and Dave’s story illustrates the power of the Infinite Banking concept for self-employed individuals seeking to build personal equity while allowing their businesses to pay for it. It represents a financial strategy that is not only innovative but also deeply rooted in practicality and long-term security. By merging personal and business financial interests, they’ve discovered a way to enhance their present lifestyle while safeguarding their family’s future.

The journey into the world of Infinite Banking is a financial adventure that challenges the conventional norms of banking and insurance. As self-employed individuals, Sue and Dave have unveiled a path to financial freedom, and their story serves as a beacon of inspiration for others looking to embark on a similar journey. Infinite Banking isn’t just a concept; it’s a financial transformation that has the potential to reshape your financial future and bring prosperity to your doorstep.

In a world marked by economic uncertainties, the story of Sue and Dave demonstrates that self-employed individuals can take control of their financial destinies. With innovative strategies like Infinite Banking, they can navigate the turbulent economic waters with confidence and create a future brimming with financial security and prosperity. So, if you’re asking yourself, “What Are Some Ways I Do That?” consider following in the footsteps of Sue and Dave, and explore the world of Infinite Banking as a pathway to financial freedom and a brighter future.

Keep In Mind…

Tax rules and regulations surrounding CIRPs and corporate-owned life insurance can be intricate and subject to change. Therefore, it is strongly advised that you consult with both a qualified tax and financial advisor who specializes in corporate and insurance-related tax planning.

Your Next Steps…

Discover this eye-opening video about “Unlocking the Path to Financial Prosperity.” Gain insights from two experts in the realm of the Infinite Banking Concept® (IBC®) as they delve into significant reductions in reliance on traditional banking.

Get instant access to our latest eReport, “Mastering Inflation: A Handbook for Canadians,” simply by downloading it now.

Contact one of our local Authorized IBC® Practitioner experts in your area by clicking here to schedule an obligation-free consultation.

Picture of Will Moran

Will Moran

Will has published numerous articles as well as two books on Infinite Banking and taking back control of the money you are giving away to everybody else. His most recent book is Think Like a Banker.

> All Articles

FREE eReport


In this timely and comprehensive eReport, you will learn about the devastating effects of a 5.2% inflation rate and how you can overcome its negative effects.

FREE eReport