Infinite Banking, Explained

Infinite banking uses permanent life insurance, usually whole life, as a personal credit line. After enough cash value builds, policyholders can borrow against it.
Supporters add extra money to boost cash value growth, then use policy loans for major expenses instead of banks, savings, or traditional underwriting.
Potential benefits include tax-advantaged cash value growth, tax-free policy loans, guaranteed whole life returns, and flexible repayment timing once enough value accumulates.
Key trade-offs: whole life can cost far more than term, cash value often builds slowly, overfunding strains budgets, and unpaid loans can reduce benefits.
For many households, term coverage, retirement investing, and an emergency fund may come first; policyholders should also consult independent insurance and tax professionals.