re: Whole Life, Infinite Banking (IBC), Cash Flow

Technically, the death benefit never changes. But the payout on a death benefit is minus the loans taken against it.

There are 3 different options for UL policies. One option increases your death benefit in step with the cash value. So you buy a $1M policy. But the death benefit increases with each payment as your cash value increases. Does that sound familiar? In this scenario, if you borrow $150,000 cash value it reduces the death benefit from $1,150,000 down to $1M.

The other popular option is where the death benefit doesn't increase until the cash value almost touches the death benefit amount and then there is a small "corridor" of cushion that will always remain. With a loan, technically the death benefit never changes. It is still the original $1m. But a payout on the death benefit will be less the loan.

Any funds not loaned against will earn interest.
Any future payments should still add value to the cash value even with loans outstanding.
But the funds in the cash value with a loan against it will not accrue interest.