Private Financing: Using Whole Life Cash Value for Personal Banking

A sophisticated strategy used by financially savvy individuals is leveraging a fully funded Whole Life policy to act as a source of private financing, sometimes referred to as “Bank on Yourself” or “Infinite Banking.” This strategy centers on maximizing and utilizing the policy’s cash value.

The Concept: Becoming Your Own Banker

The core idea is to treat the policy’s cash value as a private bank. Instead of borrowing from a commercial bank for major purchases (like a car or business capital), you take a tax-free policy loan against your cash value.

• Cash Value Continues to Grow: The cash value collateralizing the loan often continues to earn its guaranteed interest and potential dividends, offsetting the loan interest.
• Control: You set your own repayment schedule and terms, providing unmatched liquidity and control over your capital.

The Requirement for Success

This strategy is highly dependent on maximizing the cash value early on, typically through the aggressive use of the **Paid-Up Additions (PUA) Rider**, and maintaining strict discipline regarding loan repayment to ensure the policy remains solvent and the death benefit is preserved.

Disclaimer: This content is for informational purposes only and is not financial or legal advice. This is an advanced strategy requiring expert guidance and a long-term commitment. Consult a certified financial professional specializing in this concept.