Self-banking
Finance your life.
Pay yourself back.
Every car, renovation and opportunity you finance sends interest to someone else. Self-banking builds a pool of cash value you control, so the money you borrow keeps working for you.
How it works
Six steps, on repeat
The concept was popularized by R. Nelson Nash, a forester-turned-insurance agent who developed it in the high-interest-rate 1980s.
- 1
Fund
Fund a dividend-paying whole life policy designed for high early cash value: base + paid-up additions + term, under the MEC limit.
- 2
Build
Cash value grows on a guaranteed schedule, plus any dividends.
- 3
Borrow
Need money? Take a policy loan. No credit check, no application, no questions about why.
- 4
Keep compounding
Your full cash value can keep earning guaranteed interest and dividends while it backs the loan.
- 5
Repay
Pay the loan back on your schedule, ideally at the rate a bank would have charged you.
- 6
Repeat
Your borrowing capacity is restored. Use it again for the next car, property or opportunity.
Hypothetical calculator
Buy a car three ways.
Paying cash stops that money from growing. Financing sends interest to a lender. A policy loan lets your collateral keep earning while you pay interest to the insurer. Adjust the assumptions to see the difference.
Pay cash
—growth you give up by yearBank financing
—interest paid to the lenderPolicy loan
—loan interest minus what your collateral kept earning during the loanHypothetical and simplified for education only; not a projection of any policy. Assumes level annual payments, that cash value collateral continues earning the assumed rate, and ignores taxes, policy charges, dividend changes and direct/non-direct recognition differences. Policy loans accrue interest and reduce cash value and death benefit until repaid. Actual results depend on policy design and carrier.
What people use it for
Your money, your rules
- Cars and equipment
- Real estate down payments and bridge financing
- Business working capital and inventory
- College costs
- Paying off high-interest debt
- An opportunity fund that's ready when you are
The honest version
What self-banking is, and isn't
It is
- A way to keep control of your money's flow
- Liquidity without credit checks or approvals
- Collateral that can keep compounding
- A guaranteed asset outside the stock market
It isn't
- A bank account or FDIC-insured
- Free money: loans accrue interest
- Fast: it takes years and consistent funding
- For short-term cash you can't commit long term
Self-banking questions
Is infinite banking legit?
The mechanics are real: you build cash value in a permanent policy and borrow against it instead of borrowing from a bank, while your cash value can keep earning. It isn't a bank, it isn't free money, and it takes years and consistent funding to work well.
How long before I can use my policy for self-banking?
With a high early cash value design, meaningful cash value can be available in the first few years; robust borrowing capacity usually takes longer. We show the year-by-year guaranteed and non-guaranteed values before you start.
Do I have to pay the loan back?
There's no fixed repayment schedule, but unpaid loans and interest reduce the death benefit and, if they grow too large, can cause a lapse and a tax bill. Self-banking works best when you repay on a schedule you set.
Can I use IUL for self-banking?
Yes, but whole life is the classic engine because of its guaranteed values and predictable loans. IUL can work with careful loan management.
Your next step
See your numbers before you decide anything.
A free, no-pressure strategy session. We'll design IUL and whole life options from top-rated carriers side by side, and show you the guaranteed column too.