Infinite Banking
What is Infinite Banking?
Infinite Banking, also known as Bank on Yourself, is a financial strategy that utilizes whole life insurance policies as a way to create a personal banking system.
Infinite Banking involves using a dividend-paying whole life insurance policy as a financial tool to accumulate cash value and leverage it for personal financing needs. It focuses on building a cash reserve within the policy, which can be accessed through policy loans to fund various expenses.
Who Is Eligible for Infinite Banking?
1
Eligible for anyone who meets the age and health requirements set by the insurance company can be eligible for a whole life insurance policy and participate in the Infinite Banking strategy. The specific eligibility criteria may vary between insurance providers.
2
In addition to meeting the age and health requirements, eligibility for a whole life insurance policy and participation in the Infinite Banking strategy may also depend on the applicant's financial standing and goals.
Features
Cash Value Accumulation
Whole life insurance policies used in Infinite Banking have a cash value component that grows over time. A portion of your premium payments is allocated towards this cash value, which earns interest and dividends.
Policy Loans
The cash value built within the policy can be accessed through policy loans. These loans allow you to borrow against the cash value without going through a traditional lender. The policy serves as collateral, and when set up right, the cash value continues to compound even when a policy loan is taken.
Tax Advantages
The cash value growth within the policy can generally be accessed without paying income tax, Policy loan proceeds are typically tax-free, as they are considered borrowed funds rather than income. The interest paid on policy loans can be tax deductible when used for investment purposes.
