Infinite Banking — The Canadian Way
The Infinite Banking Concept (IBC) was developed by Nelson Nash, founder of the Nelson Nash Institute and author of Becoming Your Own Banker. His goal was to help individuals take greater control of their financial lives by reducing reliance on traditional banks. This strategy uses participating (dividend-paying) whole life insurance as a long-term savings and financing tool, allowing you to build cash value, earn dividends (when declared), and access your money when needed—all while keeping your wealth growing over time.
🚀 The Explosive Power of Your Personal Banking System
- 1. Keep your money safe
- 2. Keep your money liquid
- 3. Keep your money leverageable
- 4. Keep your money private
- 5. Protect your money from taxes
- 6. Protect your money from fees
- 7. Protect your money from inflation
- 8. Creditor Proof
- 9. Tax free retirement income
- 10. Generation Wealth Transfer
- 11. Not affected by Stock Market
- 12. Pre-approved policy loans/ No credit checks
- 13. Positive, competitive, guaranteed returns every year
When structured properly, the Infinite Banking Concept uses a participating whole life insurance policy in a way that’s similar to building equity in a home. Just like paying down a mortgage increases your home equity, this type of policy builds cash value over time—an asset you own and can access.
In Canada, a participating whole life policy provides permanent insurance while also growing this cash value. You can use that value as collateral to access funds, much like a HELOC on your home. The key difference is that when you access money this way, your policy’s cash value continues to grow as if it hasn’t been interrupted, because you’re borrowing against it—not withdrawing it.
Another advantage is simplicity and control. Unlike a traditional HELOC, accessing funds from your policy typically doesn’t require income checks or requalification. You can request access to your funds and receive them within days.
In addition, participating whole life policies from established Canadian insurers have a long history of paying dividends (which are not guaranteed but have been consistently paid for many decades). These dividends can be used to purchase paid-up additions, which help increase both your cash value and death benefit over time—accelerating the growth of your policy.
🇨🇦 The Canadian Advantage: Tax-Exempt Wealth Building
Saving for Education – Use a participating whole life policy as a complement to an RESP—not a replacement. While a Registered Education Savings Plan (RESP) remains one of the most effective ways to save for a child’s education in Canada, this strategy can enhance your overall plan by adding flexibility and long-term value. You can start a policy early in your child’s life, often at lower cost, to build guaranteed cash value over time. This provides an additional pool of funds that can be accessed when needed—whether for education or other future opportunities—while continuing to grow in a stable and predictable way.
Lifestyle Purchases – The equity in your Bank On Whole Life plan policy gives you flexibility and accessibility to a liquid cash reserve you can use while living to self-finance what you need when you need it. Our clients have used their Bank On Whole Life plans to pay for vehicles, new business equipment, vacations, home renovations and virtually just about anything else you can think of!
Securing Retirement – An Infinite banking structured plan accounts for an additional stream of retirement income when you stop working. Better yet, you’ll have peace of mind knowing exactly the minimum guaranteed value of your account on the day you except to tap into it. An RRSP is tax-deferred and subject to market fluctuations and volatility, and can’t provide you with the same guaranteed value of funds when you retire.
Legacy Planning – A Bank On Whole Life plan sets you up with the ability to earn annual dividends on top of guaranteed returns. These dividends can be used to purchase additional insurance which helps to accelerate the growth of both the cash value and death benefit of your policy—a great mechanism for building wealth and leaving a legacy for future generations.
Charitable Giving – If you make regular contributions to a charity, a Whole Life plan can strategically amplify the amount of your charitable gift and reduce your estate’s income tax without impacting your family’s inheritance.
The dividend paying whole life policy enables you to earn uninterrupted compound interest for the rest of your life and utilize your capital for other things. You can earn compound interest and buy your vehicles, and buy real estate, and trade stocks, and invest in private placements, and start a business, and engage in any profitable activity that you can dream of!
Your specially designed whole life policy can function as an asset and as a source of capital. Instead of being tied to bank loans (which you have to qualify for), you were your own source of financing. If credit dries up for everyone else, you can work all of the elements of the financing to your advantage. You were playing your own game. Delay Repaying, I personally intend to use my Master Account in this way
Why Haven't You Heard of This Before?
The wealthy and well-connected have known about these specially designed contracts and special life insurance companies for decades. Many prominent individuals and corporations have taken advantage of these strategies.
- Walt Disney used money from his contract to finance the opening of Disney World.
- J. C. Penney tapped into the massive reserves he had accumulated in his contract in order to keep his company afloat through the Great Depression.
- When Ray Kroc bought McDonald’s, he used his contract to pay his employees and create the successful Ronald McDonald marketing campaign.
- You might be surprised to know that every major bank uses this strategy to one degree or another. Bank of America holds roughly $19 billion of its assets in these types of contracts.