Infinite banking with structured whole life policy?

You aren’t missing anything. Infinite banking was invented by a guy who sold whole life policies. It’s not that it’s a scam as much as it is just a poor return on investment.

The chunk of extra cash / borrowing scheme seems easy enough... but what about the actual cost of the life insurance itself? Whole life is very expensive.

And if you put too much cash in too fast, it becomes a MEC and then you have other problems.

As far as repeating the cycle... Insurance companies do look at how much total life insurance you have, and I've seen some companies refuse to issue policies because they think you have enough. Because they realize the policy is being used for something other than life insurance.

Whole life insurance is a 1% tool to create additional tax-deferral... it's not a tool to get you to the 1%.

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chunking down a very low interest mortgage literally makes no sense right now.

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some use it to pay off NOO rentals with higher rates. can also be used to pay off private loans with even higher rates. It is used on CC's also. many ways to use it.

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Nobody has nothing change over that kind of time frame,

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the life happens scenarios are covered under VB. the key point is you still have access to that liquid capital in your HELOC whereas you do not with principal you send in to mortgage company. This is why you can pause the strategy when "life happens". it all depends what your goals and strategies and situations are.

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A lot times they suggest not saving/investing anything, literally just throw all your money into the loan. Makes no sense.

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i would not stop investing but they make that statement because at the same time you are paying down something with it, you are keeping a huge sum of the HELOC available by dumping into it, while keeping that actual interest owed down because less is used. it is used as a slush fund for everything. It is not for everybody obviously but can be very effective if u want to pay things off fast with higher rates or even similar rates and have a big slush fund u can access anytime for whatever. whereas u cannot tell bank ok i want my extra principal back now. i need it!

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some use it to pay off NOO rentals with higher rates. can also be used to pay off private loans with even higher rates. It is used on CC's also. many ways to use it.

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I get paying off high interest debt (Although rental property debt is certainly not high or it shouldnt be), but they all always boil down to "how to pay off your house in 5-7 years" stuff, which again, makes no sense when interest rates are even lower than inflation right now. Then of course really leveraging yourself into the rental properties. I will say how do they expect someone who is already bad with debt (carries cc balances) to use this method to chunk it down? No way people are really doing that who struggle with cc debt.

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the life happens scenarios are covered under VB. the key point is you still have access to that liquid capital in your HELOC whereas you do not with principal you send in to mortgage company. This is why you can pause the strategy when "life happens". it all depends what your goals and strategies and situations are.

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I'm not advocating you should be chunking down your mortgage with every available penny, just saying if you're really wanting to go down that path to some degree, theres no reason to really pay more interest just in another place to pay off your house faster. There are better ways of doing that, like, well, just invest your money, and make money on your money, rather than constantly trying to pay off a higher interest rate loan to chunk down your low interest rate mortgage. Anyone doing strategies like this though should have a backup where say they lose their job and out of work for a while, arent putting themselves in a losable situation to begin with when life happens.

I just hate how these are always presented like nothing DOES ever happen, "just do this for 5-6-7 years and voila!". Constantly take a big draw from HELOC and pay it off in 5-6 months then take another, rinse repeat. That's never going to go that way for pretty much anyone over the course of 5-6-7 years because, well, life. Then on top of that i always love how static they keep things like "$1500/mo living expenses", I mean come on.

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i would not stop investing but they make that statement because at the same time you are paying down something with it, you are keeping a huge sum of the HELOC available by dumping into it, while keeping that actual interest owed down because less is used. it is used as a slush fund for everything.

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Every one i've seen so far says to stop saving/investing and thats the first immediate throw off I have from it all. Especially if you're younger in 20s/30s thats the best time to invest and it seems like every time i see something on velocity banking it's stop investing/saving and put your entire paycheck to the HELOC. One of the dumbest things someone can do at that age because of how much that money will grow invested over time.

There's just better way to do these things right now than velocity banking/infinite banking. IT's probably why a lot of the velocity banking videos have stopped in the last year or two seems like because mortgages are now 2-3%. Not 5-6-7% which is the examples almost always used i see. I definitely see it as a viable technique more so when mortgage rates are higher, but right now? I mean, just no way am I leveraging more higher interest debt to pay off a sub 3% loan faster.

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People who are under the poverty line are not good candidates for whole life insurance.

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I disagree. I dont want to derail a thread. But you are welcome to list your reasoning.

The interest rate on borrowed money will always be higher than the guaranteed rate on the policy. If you're going to do this, and I stress a big IF, you want to do it with a company that pays guaranteed interest plus has a strong dividend history. You also want a policy that's non-direct recognition...

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You invest in a whole life policy

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There’s your first mistake, thinking a whole life insurance policy is an investment.

Whole life policies large enough to “create wealth” are only going to make sense for the super wealthy, not the everyday average American. And “wealth” is used very loosely there. Can it be “successful”? Eh, somewhat but you’ll need a whole lot of cash to make it really work. The best use of a huge whole life policy would really be to preserve tax-free wealth over actually creating wealth.


I sell life insurance for a living and every agent has his or her own opinion on life insurance. Here’s mine: most everyone who works for a living needs a minimum of one million dollars of coverage. 95% of that should be in term coverage, purchased as soon as possible and lasting until retirement age. The other 5% should be in a participating whole life policy with an initial face amount of $50,000 and the dividend option set to purchase additional insurance with the dividend each year. This way you’re covered for income replacement u til you retire and you have a growing whole life policy purchased as soon as possible that will be there to pay for your funeral assuming you die after retirement. Funeral costs are skyrocketing and in 30 years I could see the average cost of a funeral easily being $50,000.

There’s also an argument to be made for self-insuring after retirement.

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Can it be “successful”? Eh, somewhat but you’ll need a whole lot of cash to make it really work

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So if I wanted to park say 250k of already taxed cash there could I? And would they take it? And could I set it up so they pay me 4% interest that compounds? And then could I borrow against it?

I take out a million dollar policy and put down a 250k deposit into said policy.

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So if I wanted to park say 250k of already taxed cash there could I? And would they take it? And could I set it up so they pay me 4% interest that compounds? And then could I borrow against it?

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Yes, yes, and potentially (depending on the company) but the 4% could change over time.

You could buy a single premium whole life policy for $250,000 and the death benefit may be slightly more, say around $260k-$270k. So if you die right away, it’s worth more to your family tax-free. Your policy, depending on the company, could potentially pay 4% on the dividends that build inside the policy but the cash value will not be $250k and would be significantly lower than that. The dividends earning interest in the policy are paid out, with the interest, upon death in addition to the death benefit but the cash value is not paid out upon death.
As with all life insurance, the easiest way to “profit” from this scenario would be to die right away .

This only makes sense if you have a chunk of cash that you KNOW you’re never going to touch and want to leave it to kids or grandkids. Then put that chunk of cash into a single premium whole life policy with the kids or grandkids listed as beneficiary so they get a tax-free inheritance.