Unlocking Wealth: Can You Use Life Insurance As a Bank?

Ever wished you could be your own banker, in complete control of your finances?

If you use your whole life insurance policy correctly, you can completely transform your finances. 

Don’t worry; you’re not becoming a real banker. You’re just learning how to use your money like one. Say goodbye to traditional constraints and hello to financial freedom!

This method can help you seize opportunities, create wealth for the future, and experience the financial independence you desire. 

And it’s called Lifestyle Banking. 

In this article, we’ll explain precisely what Lifestyle Banking is and what you can achieve if you use it correctly.  

Table of Contents

    What Is Lifestyle Banking?

    Lifestyle Banking, also known as cash flow banking or the infinite banking concept, is an empowering financial strategy that enables you to control your financial future. 

    By utilizing a specially designed whole life insurance policy, you can become your own bank and seize the opportunity cost of your hard-earned dollars. 

    With the security and financial planning that whole life insurance provides, you can use the policy as your own personal bank and earn interest. 

    This approach allows you to access policy loans, grow cash flow through dividends, and unlock a world of financial possibilities. 

    The way it works is pretty simple. 

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    How Does Lifestyle Banking Work?

    You need to follow a few steps to manage your finances with Lifestyle Banking. 

    Step 1: Start a Whole Life Policy 

    Begin by getting a whole life insurance policy, preferably from a mutual insurance company, for yourself or someone close to you. This policy serves as the foundation of your own bank.

    It must be a permanent life insurance policy, like a universal life insurance or whole life insurance policy, because they have the needed cash value! It won’t work with term life insurance because term life insurance only offers a death benefit.

    Step 2: Customize Your Policy 

    Ensure that your whole life policy includes essential features such as a Paid-Up Additions (PUA) rider. These riders can turbocharge your life insurance plan and provide additional benefits.

    Also, make sure you’re getting a dividend-paying policy. Such a policy means that the mutual life insurance company will pay you dividends every once in a while, which will help you grow your money even more.

    Step 3: Properly Fund Your Policy 

    Contribute as much in life insurance premiums as the IRS allows to maximize cash value growth. Overfund your policy, as most of the extra insurance premiums go directly into your cash value, increasing your equity.

    Pay enough for life insurance coverage, so you get that policy’s death benefit, but add extra money to build the cash value component – something you’ll need for cash value loans.

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    Step 4: Utilize Policy Loans 

    Once your policy has accumulated sufficient cash value, you can borrow against it using policy loans. These loans provide access to capital for various purposes, including financing investments, business expenses, college tuition, or family vacations. 

    The best part is that your cash value grows compounded as your policy collateralizes the loan.

    Step 5: Repay the Loan 

    You have the flexibility to repay the cash value loan on your terms. You can make principal and loan interest payments, interest-only payments, or even delay repayment until you can make a lump sum payment. 

    The loan repayment directly benefits your policy’s growth and can increase your death benefit and cash flow.

    Step 6: Rinse and Repeat! 

    Keep repeating these steps for your entire life to grow wealth and genuinely own your lifestyle! This perpetual wealth strategy is based on cash flow. If the money doesn’t move, it won’t grow.

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    What Can You Achieve When You Use Life Insurance as a Bank?

    You might be thinking, why would I bother with this method if banks can do it for me? Isn’t it enough to just get a death benefit?

    Our answer? Because, in this case, you’re the one in control. 

    And when you control your own money, you have way more opportunities. 

    Here’s what you can achieve when you use whole life insurance policies in your favor. 

    Create a Personal Banking System

    Using whole life insurance to start your own bank puts the power in your hands. 

    Instead of relying solely on traditional banks, you can take out loans from the cash value of your whole life insurance policy. 

    You don’t have to spend money on extra fees that banks give you; you get to own the money you worked for. 

    Control Your Money

    And also, you get to be in control. 

    When you want to take out a loan from traditional financial institutions, you typically have to go through a lengthy process where you have to explain to bankers what you will use the money for. And they set up the repayment rules.

    But you’re in control when you use whole life insurance as your own bank. You get to decide how big your loan is and determine the interest rates and payments. The life insurance company and your insurance agent are just there to help you build your policy and make sure everything is working alright.

    This sounds like a dream come true, but remember that you must be disciplined to make this system work. 

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    Finance Your Lifestyle

    Most importantly, when you use whole life insurance as your own bank, you get to finance your lifestyle and build wealth off of it. 

    What could you possibly use this method for? 

    Here are some examples. 

    Finance Your Business

    Policy loans offer a hassle-free alternative to traditional lenders when it comes to financing your business. 

    By utilizing the cash value of your whole life insurance policies, you can fund your business endeavors, such as purchasing inventory, acquiring equipment, or covering operational costs. 

    Whole life insurance gives you greater control over your business finances and eliminates many of the complexities and requirements associated with traditional loans.

    Invest in Real Estate

    If you’ve ever considered dipping your toes into real estate investment, policy loans can be a valuable tool for financing your ventures. 

    Instead of relying solely on external funding sources, you can leverage the cash value of your whole life insurance policy to finance your investment properties. Whether you’re making down payments, covering renovation expenses, or even acquiring additional properties, policy loans provide you with a private funding source. 

    It’s like having a dedicated financial resource that supports your real estate aspirations and allows you to take advantage of investment opportunities.

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    Education Expenses

    Education is one of the best investments you can make, and policy loans can help make it more accessible. 

    If you or your loved ones are pursuing higher education, policy loans can provide the financial means to cover the costs of tuition fees, textbooks, accommodation, or other educational expenses. 

    By leveraging the cash value in your whole life insurance policy, you can ensure that you or your family members have access to quality education without the burden of excessive student loans. It’s a smart way to invest in knowledge and pave the way for a brighter future.

    Pay Off Your Debt

    Dealing with multiple high-interest debts can be overwhelming and hinder your financial progress. However, a policy loan can come to your rescue. 

    By utilizing a policy loan, you can consolidate your debts and build wealth off them, such as credit card balances or personal loans, into a single loan with potentially lower interest rates and more manageable repayment terms. 

    This approach simplifies your debt obligations, allowing you to streamline your repayments and make significant progress toward becoming debt-free. It’s a step towards achieving financial freedom and regaining control over your economic well-being.

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    Go on a Vacation

    Everyone deserves a well-deserved break and the opportunity to create lasting memories through travel. Policy loans can make those dream vacations a reality. 

    Whether you’re planning a luxurious getaway or an adventurous backpacking trip, you can use a policy loan to cover travel expenses, accommodation, and other related costs. By leveraging the cash value of your whole life insurance policy, you can enjoy your vacation without disrupting your long-term financial plans. 

    It’s an opportunity to rejuvenate, explore new horizons, and create experiences that will stay with you forever.

    Finance Your Car

    Financing a car with policy loans through Lifestyle Banking offers a unique opportunity to leverage the cash value in your whole life insurance policy to fund your vehicle purchase.

    By taking out a policy loan, you can access the capital you need while keeping the cash value of your whole life insurance policies intact. This approach allows you to benefit from potential tax advantages, competitive interest rates, and the flexibility to customize your repayment terms within the policy’s guidelines.

    Financing a car with whole life insurance policy loans can be a convenient and cost-effective alternative to traditional auto loans, empowering you to maintain control over your finances and build wealth simultaneously.

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    Emergency Expenses

    Life throws unexpected challenges our way, some of which come with a hefty price tag. 

    A policy loan can be a reliable safety net in times of unforeseen medical bills, emergency repairs, or other urgent financial needs. 

    It provides quick access to the policy’s cash value when needed, allowing you to navigate these unexpected expenses with ease and peace of mind.

    Pay Your Bills

    You can even use policy loans to pay for your living expenses and make money while doing so!

    Paying our bills is something that most of us take for granted – it’s just paying bills; how could you ever make money off of it? 

    You only need to take out a loan that will cover your bills for the next couple of months, pay interest that works for you, and watch it grow at a compounded guaranteed rate! 

    You’ll have more money in your life insurance policy than you started with. 


    Opportunity knocks, and you want to take advantage of potentially lucrative investments. Whether it’s a promising stock, a new business venture, or a once-in-a-lifetime investment opportunity, policy loans give you the means to seize the moment. 

    By utilizing a policy loan, you can access the cash value to invest in stocks, bonds, mutual funds, or other investment vehicles that align with your financial goals. 

    It’s a way to leverage the cash value in your whole life insurance policy and participate in wealth-building opportunities that can generate long-term financial growth.

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    Enjoy Tax Advantages

    One of the advantages of whole life insurance policies is their tax benefits. 

    The cash value growth within the policy typically grows on a tax-deferred basis. This means you won’t owe taxes on the growth as long as it remains within the policy. 

    Additionally, policy loans are often income tax-free, providing an added advantage compared to taxable loans from traditional banks. 

    You can maximize the use of the full cash value without unnecessary tax burdens, allowing you to keep more of your hard-earned money working for you.

    Protect Your Assets

    It isn’t all about financing your lifestyle. Using a whole life insurance policy to build wealth can also help you protect your assets. 

    First, taking this step will help you diversify your portfolio. A well-diversified portfolio is the best thing you can do to protect your money in the future. Don’t put all of your eggs in one basket! 

    Unlike stocks, bonds, and similar traditional assets, the cash value within a whole life insurance policy remains stable even during economic downturns. 

    Also, In most states, the funds in the cash value of your whole life insurance policy are protected from creditors, so that’s another thing you won’t have to worry about. 

    Build Generational Wealth

    Building generational wealth with Lifestyle Banking is a powerful strategy that allows you to create a lasting financial legacy for your family and future generations. 

    Planning for the future is crucial, and policy loans can play a vital role in estate planning. 

    They can help equalize inheritances, create liquidity for estate taxes, or provide financial support to your heirs while preserving the overall value of your estate. 

    If you structure your policy to maximize cash value growth, you can accumulate a significant pool of assets that can be passed down to your heirs. Also, if you structure it properly, you can transfer the wealth to the next generation without them having to pay taxes. 

    It’s a strategic way to ensure that your legacy is protected and passed on according to your wishes.

    how to use life insurance as a bank - a graph showing how wealth builds with time

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    You Can Start Lifestyle Banking Right Now – Watch Our Masterclass!

    Policy loans offer many opportunities to leverage the cash value in your whole life insurance policy and achieve your financial goals. By utilizing these loans strategically, you can unlock various benefits and possibilities.

    With policy loans, you can finance your lifestyle, fuel your entrepreneurial dreams by funding your business endeavors, and venture into the world of real estate with your own private funding source.

    You can also invest in education without the burden of student loans, simplify your debt obligations by consolidating high-interest debts, and make your dream vacation a reality.

    Do you want to know more about how to utilize life insurance to become your own bank? 

    If you’re eager to learn more about leveraging policy loans to achieve your financial goals, we invite you to take the next step.