Infinite Banking Concept Reviews – Legit or Scam?

Infinite BankingInfiniteBanking.org is a website run by Nelson Nash, who wants to educate you on “becoming your own banker” by using whole life insurance policies to finance your major purchases (house, car, etc.), rather than the traditional method of borrowing money from a bank which you then have to pay back with interest.

Whole life insurance policies are a combination of life insurance and forced savings policies – the “forced savings” part meaning that part of your premiums are invested and bring you a small return.  The specific attribute of whole life insurance policies that the Infinite Banking system is focusing on, however, is the fact that you can borrow money from this policy.

Infinite Banking claims that investing in a whole life insurance policy and then using it as a source to borrow money from rather than borrowing from a traditional bank will save you the money you pay in interest over the course of your life, which could obviously add up.

To be clear, Infinite Banking is not a system that claims to make you money, rather they say that their system will save you money. Also, they are  not advocating that whole life insurance is a superior policy to term life insurance in the terms of payouts after you pass – their theory is that it is more important to have access to the money you pay into life insurance while you’re alive, rather than to have a large sum paid out after you die.

Understanding the workings of a whole life insurance policy is difficult, and Infinite Banking and Nelson Nash credit this by saying you may have to read through their text Becoming Your Own Banker multiple times before you truly understand how to utilize their system. This seems fair, as a quick skim of financial articles discussing term life insurance policies versus whole life insurance policies has enough numbers, percentages, and sample scenarios to make your head spin.

While the Infinite Banking system doesn’t seem to be for the faint of heart, there are advocates out there who say people without a lot of credit card debt and who have 5-7 years to invest in their policy before borrowing money from it might be able to benefit from this program.


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Customer Responses, Reviews, or Complaints

Average Rating for " Infinite Banking Concept " is 0 out of 5 based on reviews.
  • I was introduced to this concept last week by a long term trusted friend who is now a consultant with Infinite Banking. I am 57, annual income of $349,000, debt of 2 mortgages totaling $650,000(3.125% and 4.5%), one commercial farm loan at 149,000(6%), 2 lines of credit at $160,000 (6%), and 2 car loans ($12,500 @ 1.9% & $34,000 @ 2.9%). I have no credit card debt. I have $850,000 in my IRA. From my research, this Infinite Banking is for younger persons, requiring 7-12 years prior to availability and nowhere in my reading can I find the source of the 4.5% guaranteed annual growth. I like the concept of having “my own bank”; however, with my debt picture and age is this wise?
  • The half-truths and misstatements from these sellers are enough to elevate the blood pressure of any fee-only financial planner. They use terms like “depositing cash into a life insurance policy” and “having control of your own banking system.” Amid all this unbelievable double-talk, they forget to mention one little detail. All that money that you “invest” in your whole life insurance policy is paid in the form of premiums. You aren’t paying it to yourself. You’re paying it to large life insurance companies—which, by the way, are an integral part of the financial system they blast. Let’s look at some actual numbers. You pay $12,500 a year in premiums for a $125,000 whole life insurance policy. In four years, after paying in a total of $50,000, you would have $46,110 dollars in your account. Yes, this is less than you put in, as the fees and premiums add up to be more than the growth rate. You can borrow up to 90% of the net value, or $41,500. You will pay the company 5% for borrowing your own money.
    • What crack head did you buy your whole life insurance plan from that gave you a 12,500$ a year premium for 125k coverage?!?!?! Jesus mother of askfjsfdfkasdf... You obviously did not do enough research into this subject to be able to talk about it. My premium is 100$ a month or 1,200$ a year for 20 years for a 220k coverage. By the time I pay off the premium in 20 years that's over 400k in coverage owned free and clear. I really want to know what company sold you a 12,500$ a year plan and why you were such a sucker to buy it without asking around. There is this thing called Due Diligence, you should do it.
    • The best advice is still to buy term and invest the rest. Any "infinite banking concept" should get better results than investing it yourself.
    • You are not borrowing your own money. Be an exceptional critic and really investigate the concept in detail. Fee only advisors are not as pure as the wind driven snow! The least expensive way to purchase a mutual fund is A shares. With break points and staying within a good fund family it can't be beat for costs. If you charge 1% per year for money invested in a bond fund returns 4% over 20 years, you are reducing the return by 25+% and that is if the fund is being managed for free. The fee only advisor is only worth 1% if he/she are actually doing real financial planning. Financial Planning is not picking or managing investments. It is much more complicated. Google; financial planner. The term is used much to often and inaccurately.
  • This is another Trump family scam. I don't know why people can't see that.
  • This is a very fair review. I am an authorized practitioner of IBC and searchable on the official website. Everything written in the main review is 100% true. I have been using it personally for many years and I've steered a number of my clients into the strategy as well. In 6 years time, I've received 0 calls from unhappy clients about their decision to capitalize an Infinite Banking style policy. Not every life insurance policy I write is suitable for IBC, as there are very few policy builds that actually are, but for that specific needs with clear expectations laid out up front, it's a big win for those who capitalize and use it properly.
  • I like the concept of using the cash value of what will eventually be tax free insurance proceeds to finance current financial requirements, but it begs a couple of questions. First of all I am suspicious of the cash value and enhanced value of the insurance. With today's low rates of return, how does it accumulate enough cash value to actually outstrip the paid-in value of the policy while at the same time is able to increase the overall value of the insurance proceeds? The concept sounds wonderful,(a little too good to be true) I just find it difficult to believe that it can produce the returns suggested. I would need a thorough education to validate this. The other question regards access. I gather than there would be some amount of cash value in the policy after the first year, which would then be available to borrow against. I also gather that it would take several years before there was enough value to be able to significantly borrow against it. Offsetting ones' mortgage would take quite a few years to be able to substitute an insurance loan for a large home owner's loan, unless I missed something. Norah
  • I was introduced to this recently and reading through the book by R.Nelson Nash I have some questions such as; How much money would I need to "Capitalize with being that I am 51 so that I can still retire at 65 with lets say 80,000 a year income? I can buy this against my son, and still be the owner so that my premiums will still be low. Is it still worth me running some money though this system? Again I think this is a great concept but 1) is it an option at this point for a financial benefit 2)I am in Real Estate and will my investment income be better spent in the Real Estate vehicles?
    • Dino, YES it is worth running money through this system!! When you purchase real estate, you either either finance (paying interest to a bank etc.) or you pay cash (surrendering the potential to earn interest on your cash). Either way this costs you money. Your cash value is earning dividends and is always accessible. It would be most profitable to purchase the real estate with funds loaned from your cash value, leveraging one investment with another. Your cash value will still compound interest/dividends as if the loan never happened. This allows the remaining funds to grow at an always accelerating rate. Example: you have $100,000 cash value that earns 5% dividends annually. 5% serves as a benchmark; you have found a real estate opportunity that will provide a 10% return-the cost is $90,000. Let's also say you can take a loan against your cash value at a 3% interest rate to the insurance company. It would be most advantageous to finance the purchase with money that earns 5% and can be repaid at 3%. Essentially you earned 2% to finance an investment that will pay you 10%-you just made a 12% return. From the proceeds of the real estate you should repay your loan to the insurance company to fully reimburse your cash value. This makes you eligible for round two; or tax free retirement. Now you win on two fronts. I hope this makes sense. I am an advisor, My number is (304)851-1888. Feel free to contact me if you wish to discuss this in further detail. Korey
  • I just met an insurance agent with infinite banking concept, as the illustration shows, 20k per year for 10 years, i will have about $200K to borrow with 4-6% interest rate. If i borrow the bank, i can borrow more with lower rate if using my house for colateral. What is good for infinite banking?
    • The money you borrow is from the Life Insurance Company. Your cash value still growths as if no loan was taken out. The 4-6% interest you mentioned grows tax free. All you have to do is call the Insurance Company for a loan no paper work or underwriting won't get turned down. You should pay the loan back but the terms are up to you. The principal goes back to available cash value and any interest over that of what is charged by the Life Insurance Company goes to available cash value as well. The equity in your home does not grow unless the price of your home rises in value it can also go the other way. The interest on your mortgage payment is gone for good to the bank. Your paying yourself back on a policy loan. The interest rate earned on the policy can be greater than the interest on the loan. You can always pay a higher interest rate to yourself.
  • I am not sure I totally agree with the statement that it works only for people without credit card debt. If structured correctly, it will help you retire your credit card debt a lot more cheaply and faster than trying to pay it down with the credit card company. This does not mean that you can continue to spend at the rate at which you accumulated the credit card debt, but given sufficient financial discipline, owing money on credit cards should not be a deterrent to at least investigate it as a way of paying it down with less interest in terms that are more favorable to you. Where I see a lot of benefit is that small business owners who are on a shoestring budget for growing their business can use their infinite banking policy instead of credit cards (which is what I did) to invest in their business. It is also a good place to put your retirement account funds (warning - PAY your taxes before putting your retirement funds into the policy) because retirement accounts place too many restrictions on how you can use the money.
  • This program works even for college students , I started my policy a year ago., and have used my cash value policy to go to school several times, any time I need cash I call up the insurance broker and borrow my cash, as long as I pay back the money I can alway rely on that money to be my stimulace package.
    • Doug: I guess you are too old to realize that younger generations rely on spell check, which doesn't make them uneducated. If I spent all my tuition money to learn spelling, I would be pretty pissed off. Stop being a cranky old hater.
    • Are you really going to college, Matthew? They didn't teach you how to spell "stimulus?" Get your money back from the damned college...you are wasting your time and money!!!
  • Let the "experts" try to shoot holes all day. Once you've grasped the concept and have actually implemented it, you could never appreciate it. My policy is going on 3 years and it's bailed me out many many times. In fact my credit score (as if I care) shot from 604 to 813 because I only use credit cards for living expenses for the points-back and always pay back. AND if I ever get in a pinch I never pay a penny of interest, I simply borrow from my Policy, pay my card, then pay my Policy loan back with the interest (my choice!) I WOULD have paid the credit card company. In the meantime the money I borrowed out is STILL earning interest as if I never borrowed out! So I'm not only recapturing interest I WOULD have paid, I get interest on borrowed money! How's that for turning the tables? I did it. I do it. It works.
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