Are you ready to take the first step toward financial control and independence? Canadians from across the country are learning how the Infinite Banking Concept can reduce their reliance on the banks and volatile market conditions while they build their own family banking system. Ascendant Financial has been committed to helping people achieve financial freedom through Infinite Banking since 2008.
Infinite Banking puts you in control of your money, but only if you understand how to use it and structure your tools for your success. Below, we introduce you to the Infinite Banking system and its primary tool: a participating, dividend-paying whole life insurance policy. We’ll also provide a balanced view of the pros and cons of Infinite Banking so you can make an informed decision about whether it’s right for you.
What Is the Infinite Banking Concept?
The Infinite Banking Concept (sometimes called an IBC strategy) is a financial mindset that empowers you to take control of your banking by using a properly designed, participating whole life insurance policy. Your policy builds a cash value that grows uninterrupted, even while you borrow against it to finance life’s needs.
You can use your growing cash value as collateral for a policy loan to pay off debt, fund investments, or make major purchases. Unlike traditional bank loans, borrowing against your whole life policy often affords you a more favourable interest rate and flexible repayment terms.
How Does Infinite Banking Work?
Every dollar you earn flows through a system. With Infinite Banking as your personalized wealth strategy, you become your own bank and have greater ownership and control over your money. You decide when to access funds, how to use them, and who profits from the interest.
First, you need a participating Whole Life Insurance Policy. Your dividend-paying policy should be structured to allow for the ability to purchase additional Paid-Up Additions (PUAs) with cash or dividends so you can take advantage of compounding growth of your policy cash value.
Your policy’s cash value won’t grow much in the first few years of your policy, and more of your premium goes into paying for your policy. In subsequent years, and with additional additions or increases in premiums, your cash value grows and will compound faster. You can borrow against this cash value to fund your life’s expenses or repay debts, while the full value continues to compound, uninterrupted, within your plan.
The goal of Infinite Banking is to create a self-sustaining financial system where you are in control. You control your funds during your lifetime, and the policy provides a powerful financial death benefit to your loved ones. They can use this death benefit to settle your estate, pay for expenses, or fund their own whole life insurance policy to use Infinite Banking in their lifetime. This is how Infinite Banking can create generational wealth for your family.
Learn more about how Infinite Banking works to help you achieve your financial goals and security.
Who Is Infinite Banking For?
Infinite Banking works best for individuals who are committed to long-term financial strategies. It’s especially common for:
- Families seeking long-term wealth
- Business owners who want a succession plan
- Investors tired of market volatility
- Anyone who wants liquidity and control over their money.
The biggest thing to consider when deciding if Infinite Banking is the right choice for you is whether you can afford to pay your premiums over the long term. Infinite Banking works best as a long-term financial strategy, so ensure you’re ready and able to commit to this system. Here’s an Infinite Banking example:
Meet one of Ascendant Financial’s clients, John. At 48 years old, John earned a solid income but was burdened with $200,000 in consumer debt. His goal was clear: he wanted to eliminate that debt without sacrificing his cash flow or taking on additional risk.
Through Infinite Banking, his Ascendant Financial Advisor set up a customized, properly designed whole life policy, and John began redirecting his payments into his own system.
In just 44 months, he paid off all $200,000 of debt while simultaneously building a growing asset in his policy. By the end, he had a monthly cash flow of $3,451, which he used to repay his policy loans in just 18 months. The best part? His money continued to grow uninterrupted inside the policy, and he gained complete control over his financial future.
Common Infinite Banking Misconceptions
Infinite Banking remains a relatively unknown financial system for many Canadians. As such, there are plenty of misconceptions out there. Here are the top three misconceptions the advisors at Ascendant Financial see:
- Some think it’s a tax loophole or some kind of tax-free magic trick. It’s not. While it can help you manage taxes more efficiently, it’s not designed to avoid taxes; it’s about creating control over your money through a participating dividend-paying whole life insurance policy, which existed long before tax codes were even a thing.
- Some people think that Infinite Banking is just life insurance. It’s not. The policy is the tool, but the concept is all about the process. Infinite Banking is how you use that tool to recapture interest and take control of your cash flow.
- People believe it’s a one-size-fits-all solution. It’s not that either. Infinite Banking is highly personalized, tailored to your goals, cash flow, and financial situation. It’s not a cookie-cutter approach.
- Premiums are just another expense. In fact, it’s more like a deposit into your personal banking system, where it experiences predictable, compounding growth.
Ready to take control of your financial future?
Speak with an Ascendant Financial Advisor today and start building a strategy that protects your legacy.
Pros of Infinite Banking
There are many benefits when you dedicate yourself to Infinite Banking and use it to its fullest potential.
Financial Control & Liquidity
The most apparent benefit of Infinite Banking is the financial control it provides. You’re building your own financial system without the reliance on banks or lenders and their inflexible rates and terms. The cash value of your participating life insurance plan builds over time, regardless of whether you borrow against its value or not.
In Infinite Banking, you can access up to the current amount of your cash value for a loan for any reason. This gives you control and liquidity of this important asset.
Tax-Advantaged Growth
Your policy benefits grow tax-free, over the life of your policy. You benefit from:
- Tax-Free Cash Value Growth: The cash value of your policy compounds daily, tax-deferred. As long as your policy remains active and your premiums are paid, your earned growth won’t trigger a taxable event. If your policy lapses, the cash value may be subject to taxes if it’s beyond certain thresholds. Your tax or financial advisor can calculate these amounts based on your policy.
- Tax-Free Access to Funds: Using the cash value isn’t like withdrawing from a savings account. You’re actually using the cash value as collateral for a loan. As such, the loan proceeds are not considered taxable income.
- Tax-Free Death Benefit: Your beneficiaries receive a death benefit through your policy upon your passing. This is available to them tax-free.
These tax advantages make Infinite Banking a powerful tool for building and preserving wealth.
Legacy and Estate Planning
A participating whole life insurance policy is an effective way to pass your wealth to future generations, while avoiding probate and delays. Other estate planning, such as other inheritances and real estate, may be subject to probate and delays, often costing your loved one money and time.
Your death benefit is typically paid within a few weeks after your insurance company receives the required death certificate and claim form. Also, unlike real estate, your life insurance death benefit is guaranteed and paid out tax-free, making it a reliable way to protect your family’s financial future.
Access to Capital Without Credit Checks
The lengthy approval process and credit checks associated with applying for some loans can cause delays and major headaches. When you borrow against the cash value of your life insurance policy, there are no additional credit checks or approvals needed. This gets you access to your capital much faster than traditional banking avenues.
Predictable Growth (Dividends and Guarantees)
Real estate values ebb and flow. Investment value is also not guaranteed as traditional investments are typically tied to variable interest rates, market volatility, and other uncontrollable factors.
However, the cash value and death benefit of your participating whole life insurance policy are guaranteed. This provides predictable growth you can rely on to use as collateral for a loan in your lifetime and increases the death benefit your loved ones will receive after you’re gone.
You can influence the growth of this wealth by purchasing Paid-up Additions (PUAs) to help your wealth grow faster.
Take control of your financial future.
Schedule a consultation with Ascendant Financial and ensure your financial choices align with your long-term goals — before it’s too late.
Cons of Infinite Banking
As with any financial system, it’s important to weigh the pros with the cons. Before purchasing a participating whole life insurance plan for Infinite Banking, be aware of the following:
High Initial Premiums
Premiums for these policies are typically higher than those for other types of life insurance policies. Premiums can be structured with some flexibility, but they must be carefully designed to balance cash value growth and policy sustainability. The more you pay in premiums, the faster your policy value will grow.
Also, in the early years of your policy, a large percentage of your premiums go towards paying for the policy. This will require significant up-front funding, but there are strategies to ease the financial burden of high premiums. One common approach is to use your earned policy dividends to pay a portion of your premiums. You can also invest early in PUAs to take advantage of the greater compounding growth of your policy cash value.
Long-Term Commitment
Infinite Banking isn’t a short-term financial system. The benefits of this system take time to realize. This strategy can create generational wealth for your family if you stick with it for the long haul.
Misunderstood by Traditional Advisors
Traditional financial and estate planning advisors often don’t fully understand how to use a whole life policy as a personal banking system. Often, those who try don’t know enough to structure a whole life plan for Infinite Banking.
This is why we always recommend seeing financial advisors who specialize in Infinite Banking. Ascendant Advisors have helped thousands of people structure participating whole life insurance policies and use them with the Infinite Banking Concept. Our team was mentored by the late R. Nelson Nash, the visionary behind this financial lifestyle process, making us experts in this field.
Risk of Improper Policy Design
Not every life insurance policy can be used in Infinite Banking. You require a properly structured, dividend-paying, whole life insurance policy. Improper policy design and premium structure risk a reduced cash value and Infinite Banking benefits that take longer to realize.
Infinite Banking isn’t just about buying a whole life insurance policy—it’s about designing it correctly and using it as a financial tool. Without guidance, someone might overfund or underfund their policy, mismanage loans, or fail to align the strategy with their financial goals, which can lead to missed opportunities or even financial strain.
Read more about how to structure a whole life insurance policy for Infinite Banking.
Opportunity Cost (vs. Other Investments)
Paying premiums should be done for life to realize the full benefits and value growth of your policy. This means you’re committing to paying your premiums until your death, and possibly missing out on diverting this cash to higher-yield investment opportunities elsewhere. Some don’t like to tie their money (in premium payments) in the long term, and these are the people who struggle with Infinite Banking. While ongoing premiums are necessary, strategies like using dividends or policy loans can help reduce or offset premium payments over time.
Should You Use Infinite Banking?
How do you know if you’re ready to commit to Infinite Banking and take advantage of its benefits? Infinite Banking isn’t just something you do for a short time to pay off debts or make a large future purchase, then cancel your plan. To get the greatest benefit, you need to commit to keeping an active policy until your passing.
Are you ready for the commitment? Start by asking yourself these five questions:
- Do I value financial independence?
- Do I prefer predictable wealth growth over growth tied to the economy?
- Am I looking for guaranteed returns and a death benefit for my loved ones?
- Do I have debts or expenses, and am I looking for a more favourable loan?
- Am I ready to learn?
If you’ve answered yes to all the above, your next step is to learn more about Infinite Banking and how to use it to secure your family’s financial future. Start by viewing the resources section on our website, then watching our free info webinar.
How Ascendant Financial Makes It Work for You
Ascendant Financial is different from other financial institutions. We lead with education. We believe in empowering you with the knowledge and strategies you need to achieve your financial independence and secure generational wealth.
In addition to our financial coaching, we also offer policy design. We’ll help you find the right participating whole life insurance plan and structure premiums that will work towards your financial and life goals. Your goals and lifestyle are unique, and your policy should be tailored to you, not the other way around. “We’ll help you select the right participating whole life policy, and tailor it to your specific goals and budget.
Our team is compliant with all Canadian regulations and takes a client-first approach to our work. Becoming Your Own Banker requires understanding, commitment, and the right guidance. At Ascendant Financial, we give you the best tool to get the job done and provide our expertise and support to use it effectively. You’ll start your Infinite Banking journey with confidence.
Are You Ready For The Infinite Banking Lifestyle?
Infinite Banking is not about investments, nor is it a financial plan. It’s a lifestyle that helps you achieve your financial freedom from traditional lenders and banks, by Becoming Your Own Banker.
However, not everyone benefits from this system. In addition to higher premiums than other types of life insurance, some people are not ready to wait for the benefits, as it can take several years to earn a high enough cash value that can be used as collateral for loans. Some fall into the trap of working with a financial or insurance advisor who doesn’t fully understand how to structure a policy for Infinite Banking, and they’re left with a policy that doesn’t actually meet their needs.
Those who are committed to the Infinite Banking process over the long term often realize significant benefits from the policy’s compounding and guaranteed growth. You can borrow against this cash value during your lifetime while that value continues to grow uninterrupted. It also includes tax-free growth for your policy cash value and a death benefit for your loved ones.
Education is the first step. With expert guidance and education, Infinite Banking can be a powerful system to take control of your finances and keep your wealth in the family for generations to come.
To get started, watch our free, on-demand webinar, then contact a member of our team to get started.
Infinite Banking FAQ
What Are The Tax Advantages Of Infinite Banking?
Infinite Banking provides three tax-free advantages, as long as policies are properly maintained:
- A tax-free cash value that won’t trigger an income tax event
- Tax-free access to use your cash value as collateral for a loan
- A tax-free death benefit for your loved ones.
These tax advantages make Infinite Banking a powerful tool for building and preserving wealth.
How Much Money Do You Need For Infinite Banking?
To get started with Infinite Banking, you only need enough money to pay your annual premium. This amount can be customized for your budget and financial goals. Remember that larger premiums support faster growth of the cash value inside your policy.
Is Infinite Banking only for high-income individuals?
No, Infinite Banking is for anyone who can commit to premium payments for the long term. In many plans, you can customize your premium payments based on how much you can afford. You also have the option to purchase PUAs to add to your policy without changing your premiums.
Book a Call with an Advisor at Ascendant Financial
Contact Ascendant Financial today to review all of your financial options.
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