Are you utilizing the most effective financial tools to achieve financial freedom, flexibility, and independence? You no longer need to be at the mercy of the banks and external lenders, and instead can build a “family bank” that you can borrow from. You can leverage a properly structured whole life insurance policy to create your own personal banking system through the Infinite Banking Concept.
Your choice of policy type is a critical first decision. Many people mistakenly select term life insurance or non-participating whole life policies. Infinite Banking requires a participating whole life policy from a mutual insurance company, as these provide dividends and cash value growth.
Next, you need to personalize your plan to harness your cash value to get favorable loans to pay down debt or make large purchases. This plan needs to be structured so you can use this borrowing power while your cash continues to compound daily in your account.
Keep reading to learn how to structure a whole life policy for Infinite Banking. We’ll share insider tips to help you maximize your policy’s growth potential over the long term and use the cash value to fund your life today.
Key Components of a Whole Life Policy for Infinite Banking
How do you use whole life insurance for Infinite Banking? Here are three features and considerations that help you use your policy as a powerful financial tool for your family.
Death Benefit vs. Cash Value
Your participating whole life insurance policy contains two key features that are used as a core financial tool for Infinite Banking: A death benefit for your loved ones and a cash value for you.
The guaranteed death benefit is payable to your loved ones. It helps provide financial security for your family during their time of grief. This benefit is locked in and can never decrease or be canceled unless you stop paying your premiums. The amount they receive is dependent on the annual premiums you pay and can be increased by purchasing Paid-Up Additions (PUAs).
Your account also builds a cash value, which you can borrow against during your lifetime. This cash value starts small with slow growth. As you continue paying your insurance premiums, your cash value compounds daily. This cash value can be leveraged to pay off debts, fund your life, or make large purchases. You can hasten this growth by purchasing PUAs.
The Infinite Banking Concept is predicated on using the cash value of your policy to achieve financial freedom. Maximizing the growth and use of your policy’s cash value will enable the financial freedom you’ve been looking for.
Paid-Up Additions (PUAs)
You can increase your policy’s death benefit and cash value by infusing cash into your plan in installments. These are known as Paid-Up Additions (PUAs). Unlike base premium payments, these directly and immediately increase your death benefit and cash value. They don’t require ongoing payments once purchased.
These infusions expedite the compounding effect as PUAs earn dividends that can be used to purchase more PUAs, accelerating cash value growth over time. PUAs can be added within certain limits defined by your insurer and policy structure. Your advisor will help you optimize this based on your goals and allowable contributions
Dividends and Interest
Dividends can be used as a powerful tool in Infinite Banking. Participating whole life insurance policies include a non-guaranteed annual dividend, which is a share of the company’s profits. As a policyholder, you’re a part-owner of the insurance company and entitled to a share of the profits.
Every year, your life insurance company calculates its profits, and a portion of these profits is distributed to policyholders through dividends. Dividends are not guaranteed and are contingent upon the company’s profitability, though most reputable mutual companies have a strong track record of paying them consistently.
You can choose to take these dividends in cash, apply them to pay your premiums, or use them to purchase PUAs to increase your cash value and death benefit.
How to Structure Your Whole Life Policy for Maximum Cash Value
Using whole life insurance for banking requires using a properly structured whole life policy for cash value. To maximize this cash value, here are four top considerations:
Reducing the Death Benefit
One strategy many Infinite Banking clients employ is reducing their policy’s death benefit in the early years of the policy. This maximizes cash value because it lowers the cost of insurance. In this situation, less of your premium is required for the insurance cost, allowing more to be allocated to the policy’s cash value.
You can always increase your death benefit later through PUAs or other riders. This strategy of reducing the death benefit in early years increases your liquidity and financial control early in the policy.
Maximizing Paid-Up Additions
PUAs are one of the most effective ways to unlock exponential, compounding growth of your policy, while minimizing insurance costs and fees. Each PUA acts like a mini, fully-paid life insurance policy added to your base policy. This immediately increases your cash value and death benefit. The key is that your PUA grows your cash value daily and helps you earn higher dividends.
Structuring a policy with PUAs early on accelerates cash value growth and increases the death benefit simultaneously. This creates a compounding effect: each PUA earns dividends, which can then be used to purchase more PUAs, further boosting cash value and death benefit over time.
Ascendant Financial Advisors stress the long-term impact of PUAs: “Clients enjoy uninterrupted compounding, enhanced liquidity for opportunities or emergencies, and a growing financial legacy for their beneficiaries. It’s a strategy that builds wealth efficiently while maintaining flexibility.”
Optimizing Policy Loans
Your whole life insurance plan can be a valuable tool for accessing funds to pay off debts or cover any expenses you may need. Those who use whole life insurance for their infinite banking strategy can use their policy’s cash value as collateral for loans. This allows you to lower interest rates and offer more favorable and flexible payment terms.
You’re not required to make regular payments unless you choose to. Interest from missed payments is added to your principal.
When you optimize your policy loans by using the cash value of your life insurance policy, you benefit from:
- No additional credit checks
- No income verification
- Quicker access to funds (often within a couple of days)
- Flexible payment terms
While the loan options are more flexible, our advisors still recommend exercising financial discipline:
“Mismanaging policy loans and failing to repay them can reduce the death benefit and hinder long-term growth. Stick to a disciplined repayment plan to keep the system effective.”
Considerations for Premiums
In participating whole life insurance plans, you have some flexibility in your premiums. Your premium is linked to how quickly your cash value will compound, as well as the guaranteed value of your death benefit. Determining the optimal premium involves striking a balance between what you can comfortably afford and your financial goals.
This balance is essential to get right at the start to ensure your policy remains sustainable in the long term (in other words, sustainable to continue paying the premiums for the life of your policy). The best approach is to work with a knowledgeable financial advisor who specializes in insurance and Infinite Banking. These Infinite Banking advisors can help you structure your whole life policy to mix your base premium (your foundation) and PUAs (to accelerate cash growth and increase the death benefit).
Be cautious not to overfund your policy. Low premiums can limit cash value growth and borrowing capacity. An Authorized Infinite Banking Practitioner can help you structure your premiums so they’re affordable, align with your financial goals, and maximize cash value accumulation.
Here’s an example of how we helped our client, Dave, fund his whole life insurance policy: Over the first seven years, Dave and his family used policy loans to finance major purchases, including a new SUV, and to pay their mortgage balance early. They redirected their mortgage payments back into their policy to accelerate their financial independence.
Dave’s family created a self-sustaining system that now provides liquidity, flexibility, and uninterrupted growth. This approach not only eliminated reliance on traditional banks but also gave them the freedom to pursue their goals on their terms.
Ready to take control of your financial future?
Speak with an Ascendant Financial Advisor today and start building a strategy that protects your legacy.
The Benefits of Structuring a Whole Life Policy for Infinite Banking
Getting an off-the-shelf life insurance policy works for many people, unless you’re planning to use Infinite Banking. A properly structured insurance plan enables you to have the greatest flexibility in your finances, while providing a guaranteed death benefit for your loved ones.
Here are the top 3 benefits of structuring your whole life insurance policy in this way:
Flexibility and Control
A primary goal of Infinite Banking is control over your finances by harnessing the borrowing power of your policy’s cash value. Not all life insurance policies provide these benefits, so you must choose one that does and that includes the flexibility you need.
You can use your life insurance benefits to:
Flexibility is key. As our Ascendant Advisors caution, “policies without flexible premium structures can strain cash flow during financial challenges. Ensure your policy allows for adjustments to maintain its benefits over time.”
Wealth Accumulation
Participating plans support building wealth with whole life insurance. A portion of your premium payments gets added to the pool of funds and compounds daily to increase in value. Re-depositing your earned dividends into your plan through PUAs further accelerates your compounding cash value and death benefit. Regardless of whether you borrow against your cash value or not, the full value continues to grow tax-deferred for the life of your policy, as long as you continue making your premium payments.
Protection for Future Generations
Another benefit of Infinite Banking and whole life insurance policies is their ability to build generational wealth. In this strategy, your money remains within the family, creating a whole life policy for banking. This family banking system allows you and your family to finance major expenses and recapture interest that would otherwise go to an external lender. In addition, your death benefit is passed to your heirs tax-free.
Infinite Banking helps you create a legacy of financial independence for future generations. Many financially successful families have used similar long-term, multi-generational strategies to preserve wealth and pass on financial systems, not just assets.
Learn more about how to build generational wealth for your family by reading Don’t Spread the Wealth.
Then, the best way to get started is to work with an Ascendant Financial advisor who can help you tailor your whole life insurance plan to maximize long-term, generational wealth.
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.
How to Get Started with Structuring a Whole Life Policy for Infinite Banking
An out-of-the-box life insurance policy won’t help you maximize the benefits of Infinite Banking. You need to ensure that you obtain a dividend-paying, participating whole life insurance plan with the proper structure to provide the necessary flexibility.
Here’s how to get started:
Throughout this whole process, the goal is to personalize this plan as much as possible. That’s how you can make it work for you and your family. This personalized approach ensures the policy becomes a powerful financial tool, not just an insurance product.
To start personalizing your whole life insurance plan for Infinite Banking, book a consultation with an Ascendant Financial advisor.
Building Wealth For Today And The Future
Your whole life insurance policy can be more valuable than providing a guaranteed death benefit for your beneficiaries. With a properly structured policy, you can build a growing cash value that you can use as collateral for loans. It offers more flexible repayment options, and the cash value will continue to grow in your plan. Your whole life insurance policy is the core financial tool in achieving economic independence through the Infinite Banking Concept.
Ascendant’s advisors have the knowledge and experience to be your guide into the world of Infinite Banking and help you with setting up a whole life policy. With us on your side, you get:
Do you want to gain control over your money, build a rock-solid financial foundation, and create a system that works for you, not the banks? You can achieve financial independence on your terms.
If you’re ready to dive deeper into how this works, we recommend our on-demand Infinite Banking training. It’s packed with actionable insights on Infinite Banking and how to structure policies effectively.
Then, talk with Ascendant Financial to get help personalizing your whole life insurance policy to meet your financial needs and goals.
Frequently Asked Questions
How to properly structure a whole life insurance policy?
The best way to structure a whole life insurance policy is to evaluate your current financial needs and projected future needs. Based on these details, you can personalize your policy with the flexibility and growth potential you need to meet your financial goals, provide a tax-free death benefit for your loved ones, and build generational wealth for your family.
What is the infinite banking policy structure?
Infinite Banking uses a participating, dividend-paying whole life insurance policy as a core financial tool. As the cash value of your policy grows, you can use it as collateral to get loans. The loans offer more flexible payment terms and interest rates than those you get with banks or other traditional lenders.
What is the cash value of a $100,000 whole life policy?
The cash value of a $100,000 whole life policy will vary depending on several factors. The cash value starts small and, through compounding growth, increases in value over time. Your cash value will be based on the structure of your plan, your premium payments, the duration of your coverage, and the insurance company you use. For help understanding the cash value of your policy, consult your financial advisor.
Book a Call with an Advisor at Ascendant Financial
Contact Ascendant Financial today to review all of your financial options.
Popular Posts
- How to Structure a Whole Life Policy for Infinite Banking
Are you utilizing the most effective financial tools to achieve financial freedom, flexibility, and independence? You no longer need to be at the mercy of… Read more: How to Structure a Whole Life Policy for Infinite Banking - Velocity Banking vs Infinite Banking: Which Wealth Strategy Wins?Banking is no longer dominated by the banks. People around the world are discovering how to use alternative banking strategies and concepts to regain control… Read more: Velocity Banking vs Infinite Banking: Which Wealth Strategy Wins?
Share This Post
Categories & Tags
