The Infinite Banking Concept

What is the Infinite Banking Concept?

The Infinite Banking Concept (or IBC) is the process by which one becomes their own banker, as taught by the late Nelson Nash. In his definitive book on the subject, Becoming Your Own Banker, Nash explains how whole life insurance policies uniquely function as dividend paying assets through accrued equity; And the many creative ways one can utilize this liquid cash value, such as:

  • Creating one’s own tax free lending system to finance large purchases (i.e. a car or a home), independently of commercial banks and lenders

  • Generating personal wealth (as with stocks or cryptocurrencies, but without volatility and with the added utility of protection for one’s beneficiaries)

  • Using these practices for business financing

How the Infinite Banking Concept Works

As Nash famously taught, the equity, or cash value(s) specific to whole life insurance policies serve as collateral for all policy loans. So long as premiums are current, the policyholder simply calls the insurance company and requests a loan against their equity. The insurer on the phone won’t ask what the loan will be used for, what the income of the borrower (i.e. policyholder) is, what other assets the person might have to serve as collateral, or in what timeframe the person intends to pay back the loan. The checks for these loans are often sent out as soon as the next business day.

In contrast to term life insurance products, which cover only the beneficiaries of the policyholder in the event of their death, whole life insurance covers an individual’s entire life. When structured properly, whole life policies generate a unique income stream that increases the equity in the policy over time.

In today’s world, one driven by convenience of consumption, too many take for granted our nation’s purest founding principles: freedom and justice. Most people never stop to consider how the products of their bank fit in with these virtues. So, we pose the simple question, “Do you feel liberated or justified by operating within the constraints of commercial lines of credit?”