Why Use Whole Life Insurance for Infinite Banking?


Let me start by saying there are two types of people who buy life insurance: Those who need it, and those who use it.

Those who need life insurance may view it as a annoying monthly expense but recognize that it is needed to protect their family from financial hardship if they die prematurely. It gives them, and their loved ones, peace of mind knowing that their monthly expenses will be taken care of. This type of life insurance is aptly named Term Insurance since it will eventually terminate – almost always before the owner dies.

Those who use life insurance also need it for family protection, however, they understand that nothing works better for creating, enhancing, controlling, and preserving wealth. They understand that no other product can do what life insurance can do when structured properly. This type of life insurance is appropriately named Dividend Paying Whole Life Insurance. It will not terminate before you do… unless you terminate it. But why would you when there are so many living benefits?

When structured properly, these living benefits include:

  • Competitive Returns
  • Tax Advantaged Growth
  • Allows for High Contributions
  • Policy Loans
  • Uninterrupted Growth
  • Unstructured Loan Repayments
  • Collateral Opportunities
  • Safe
  • No-Loss Provision
  • Creditor Protection
  • Liquidity, Use and Control
  • Assignment as an Insured Retirement Program
  • Ever-Increasing Tax-Free Permanent Death Benefit

What Would You Bet On: 1% or 100%?

Insurance industry studies have shown that the probability of filing a death benefit claim under a term insurance policy is unlikely. One study placed the percentage as low as 1% of policies paying a benefit.

Would you rather pay money for something that pays out 1% of the time, or pay money for something that pays out 100% of the time?

Renting vs Owning?

Owning term insurance is like renting a house.

  • You pay the landlord rent every month for a month’s worth of living space
  • You may do this for many years, but while you are never building wealth for yourself, you are building wealth for the landlord who is putting your payments toward the equity he or she has in it
  • You have no collateral

Owning whole life insurance is like buying a house. With each payment you are gaining equity in the property. Instead of paying rent every month where you will never see that money again, you are taking money from one pocket and putting it into another pocket.

  • You own a living space (you have a death benefit) for the rest of your life which you wanted
  • Your monthly payment is building an ever-growing asset for you… not for the landlord (your cash value is building daily)
  • You can use the equity in your house as collateral (you can borrow against the cash value for financing) to buy a second property or make an investment or a purchase. Both your house and your cash value will keep increasing in value while using it for these purposes, even though you are using the money for something else

How to USE Dividend Paying Whole Life Insurance for Infinite Banking

  1. Take a policy loan against your cash value
  2. Use that money for something else
  3. Set it up where you pay all the principal back so you can use it again!

Please note:

  • All the interest goes to the insurance company
  • All the principal goes to you, AND they pay you a dividend

So, you have received the benefits of what you’ve used that money for now (it will be paid off when you die if you don’t pay it off beforehand).

  • So, you’ve moved from a middleclass mindset, ‘I drained my account for a purchase’,
  • And you’ve moved to a wealth-class mindset, ‘How can I make that purchase AND get all my money back?’

You have made the switch from giving up your money to NOT giving up your money for anything, ever!

That’s what banks do, and what we can do. When we don’t it feels like we are stealing from ourselves.


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.

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