Top Questions About Infinite Banking

Top Questions About Infinite Banking, Part 1

Are you considering Infinite Banking, but you aren’t sure yet if it’s a good fit for you, and you’d rather figure it out before investing time into a personal conversation with an advisor? Look, your concerns are absolutely valid!  But let’s let those questions propel you to action, not indecision. Today, we’re answering the top questions about Infinite Banking that we have heard.

Hopefully, we’ll cover the question on your mind.

So, if you’d love to clear up your doubts, find out exactly what to do about your concerns, and know what to do next, join us for the conversation below!

What is Infinite Banking?

Infinite Banking is a strategy of using a financial product in a way that accelerates growth. We use specially designed, high cash value life insurance with mutual companies that pays dividends. These policies grow with guaranteed interest, and non-guaranteed dividends (although dividends are highly anticipated and have a good track record of being paid). 

This means that you have access to cash that is growing, liquid, and will not drop in value. Infinite banking is often misunderstood, yet it’s a strategy that has been used for centuries by our country’s wealthiest people as a means to build and protect wealth.

If you have questions about Infinite Banking, we highly recommend checking out this post to get some of your top questions about infinite banking answered. 

Your Top Questions About Infinite Banking, Answered

1. What if I don’t like whole life insurance?

When this comes up in conversation, we often come back with the question, “Compared to what?” In reality, life insurance is hard to compare to other assets because it is fundamentally different from many assets. Rather than getting hung up on the product itself, we encourage you to take a different route.

When we meet with people, one of the first things we ask them to consider is the purpose of their money. If you’re looking for growth, availability, investment capital, etc—those are purposes. 

When you can define what you want to do with your money, then you can determine the best products to use. Despite what you’ve been told, insurance may be the ideal asset for the goals you want to accomplish. It may not. However, you cannot judge it simply based on whether you like it—you have to see it as a means to an end. 

2. What if I don’t need insurance?

We hear this question often, for many reasons. Some people view insurance as something to protect their children. Others view insurance as unnecessary because they have enough money to “self-insure.” 

We think the better question to ask is, “Do you want everything that comes with insurance?” Insurance companies will never sell you more insurance than you “need,” so we prefer to look at the benefits. Beyond the living benefits, insurance protects your estate and can help ease unexpected costs (including loss of income). Insurance helps your money go further and your assets last longer.

3. Can’t I get better returns in the stock market?

Let’s start with this: life insurance is not an investment. When we compare insurance to investments, we’re setting it up for failure. We prefer to look at cash value insurance as an alternative to savings accounts. Investments have risk involved, and therefore the potential for different returns. Savings, on the other hand, provide certainty and liquidity. Your cash value is the money you will access in emergencies and opportunities. In fact, you can even use your cash value to make investments. 

Insurance is a long-term strategy for wealth building (and asset protection). And Infinite Banking is a both/and strategy—you can invest AND save, and you can often yield better results in the long-term with both. 

4. Will I lose access to some of my cash at the beginning?

In the short-term, it’s true that your cash value will have a lower value than the premiums you pay into your policy. However, in the long-term, your cash value will surpass your premiums paid after a certain period. 

It’s difficult for many people to deal with this initial drop in liquidity. However, this discrepancy between your cash value and your premiums in the beginning pays the cost of insurance. This protects the contractual guarantee that the insurance company will pay a death benefit when you pass on. This trade-off protects the strength of your insurance policy, so that you can reap the long-term benefits. 

5. I already have a policy; is it a good one?

Top Questions About Infinite Banking 1

While a policy you have may not be optimized, having any whole life insurance policy is often more beneficial than no policy. If you were to start over, you’ve lost the years of progress you’ve made by paying into this policy. 

If you’re unsure of the design of your policy, you have options beyond surrendering or selling your policy. 1035 Exchanges are one way to convert a life insurance policy that you feel isn’t working. The other solution may be to fund a new policy that achieves your goals while keeping your old policy—so you can benefit from the cash value you’ve already accumulated and build more optimal cash value moving forward. 

6. I’ve heard many people talk about the “ideal” policy design—how do I know if I have that?

Policy design ultimately depends on what you want out of your policy. Some policies can be designed for better long-term performance, while others provide more early cash value to access. Some policies are designed for greater guaranteed death benefit over cash value. 

Depending on where you are in life, you’ll have different goals for your policy design. It’s important to speak with a professional about what you’re looking for. There is no one-size-fits-all policy design. 

7. Am I overpaying for insurance?

This, like the question before, takes a sensitive consideration of what you want out of your policy. However, we recommend looking at the big picture—often, people sacrifice better long-term performance because of a high premium in the first few years. Know what you can afford and know what you want—and be willing to look at the long-term.

Often, with Infinite Banking, you want to pay as much as possible. That’s because you’ll optimize your cash value and build more wealth and liquidity as you go. The only way you can truly overpay for your insurance is if you “MEC” your policy, or pay beyond what the IRS has set as a limit. (To learn more about MECs, and the changes made in the last few months, read our article on the 7702 Plan.)

The Reason for Infinite Banking

The best time to start a policy was yesterday. The second best time is today. The longer you can fund a policy, the more you can benefit from compound interest (not to mention lower premiums). After all, you can’t guarantee your future health or insurability. If you’re on the fence, we hope this discussion will help you see the real, applicable benefits of infinite banking beyond insurance. 

Book A Strategy Call

Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  

Book an Introductory Call with our team today, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster.

That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to to learn more.

Rachel Marshall

Rachel Marshall is a devoted wife and nurturing mother to three wonderful children. Rachel is a speaker, coach, and the author of Seven Generations Legacy™, passionate about helping enterprising families unlock their true potential and live into the multi-generational legacy they are destined for. After a near-death experience, she developed a deep understanding of the significance of recognizing and embracing one's unique legacy As Co-Founder and Chief Financial Educator of The Money Advantage, Rachel Marshall is renowned for her ability to make money simple, fun, and doable. She empowers her clients to build sustainable multi-generational wealth and create a legacy that extends far beyond mere financial success. Rachel's expertise lies in helping wealth creators remove the fear of money ruining their children, give instructions for stewarding family money, teach financial stewardship and create perpetual wealth through family banking, and save time coordinating family finances. Rachel co-hosts The Money Advantage podcast, a highly popular show that delves into business and personal finance, including how to effectively manage finances, protect wealth, and generate sustainable cash flow. Rachel's engaging teaching style and practical advice have made her a trusted source of financial wisdom for her listeners.
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