Infinite Banking – Scam or Serious Investment Option?

infinite banking scam

TIs the “Infinite Banking scam” really a scam, or does it make sense as an investment strategy?

Imagine if you could grow your money, without risk or tax, and access it any time.

It almost sounds too good to be true — which is exactly why critics who still cling to traditional investment strategies often call the Infinite Banking Concept (IBC) a scam.

Wait…so the Infinite Banking Concept isn’t a scam at all?

IBC is based on “banking” your money in a dividend-paying whole life insurance policy. Like all investments, IBC requires careful planning to yield maximum results.

It isn’t a “get rich quick” scheme – it’s a personal investment strategy designed to put you back in control of your own finances. It is structured to foster financial security and growth and minimize market loss.

Let’s look at a few ways IBC outperforms other investment methods:


Markets fluctuate and financial institutions flounder – which can put your hard-earned money at risk.

When you invest in a whole life insurance policy, your finances are immune from market swings. Whole life insurance policies have a guaranteed minimum growth – so no matter what’s happening on Wall Street, you can rest assured your finances are safe.

Growth (Tax-Free!)

Guaranteed minimum growth means you’ll always be gaining and never losing. In fact, according to a Mass Mutual study, between 1981 – 2008 a standard 10-pay policy grew annually at a rate of 6.52%. In some cases, policy modifications can boost this rate even higher.

Did you mention tax-free?

Yes, that’s right. When your money is invested in a whole life insurance policy, growth inside the policy is tax-free. For comparison, if your policy grows 6% annually tax-free, a taxable investment (like a 401k) would need to reach an annual growth rate of 7-9% to equate.


IBC is hinged on the idea that – as your own banker – you get to decide where your money goes.

The cash value of your whole life insurance secures liquidity, so you have the freedom to access your money any time.

Making IBC Work for You

Adopting an Infinite Banking strategy can help you take control of your financial portfolio.

However, like all investments, proactive steps can help ensure your life insurance policy is the best investment for you.

1. Consult a professional:

Whole life insurance policies are subject to Modified Endowment Contract (MEC) rules. For new investors, these can seem complex and daunting – and breaking these rules could make your policy taxable.

When starting out, work with a professional to understand MEC rules and design a whole life insurance policy that works for you.

2. Pay that professional – but not too much:

Commission fees for financial agents can be expensive.

Before contracting with an agent, ensure the commission fees are not so hefty they diminish the value of your Infinite Banking policy. Agents are often paid up-front which could be more cost-effective than a financial consultant for other market investments.

3. Be patient and prepared:

In some cases, it can take several years before your contributions are accessible for withdrawal.

Choose and modify a whole life insurance policy designed to yield a cash value quickly and then stabilize growth.

Build a short-term contingency plan into your Infinite Banking strategy to mitigate any loss due to unforeseen financial circumstances.

So is the Infinite Banking Concept really best for me?

If you plan to use IBC to get rich quick, you’ll likely be walking away from it in a few months calling it a scam too. However, when properly structured and managed, IBC can easily outperform other market or safe investments.

The Infinite Banking Concept will shift the paradigm about your personal finances to help you stop throwing your money away and safely grow your portfolio on your own terms.

Want to learn more about smart investment options? Setup a free consultation right here. Thanks! Dan Thompson — Wise Money Tools.

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