An Introduction to the Infinite Banking Life Insurance Concept

by Ben T. McFie

The Infinite Banking Concept (IBC) or infinite banking life insurance is outlined in the book Becoming Your Own Banker by R. Nelson Nash. My introduction to infinite banking life insurance was on a family vacation to San Diego, California in 2005. I was only 12 years old when my Dad was reading the book Becoming Your Own Banker, and he was so excited about what he was reading that he was having me and my older brother, who was 14 at that time, sit and listen to excerpts from the book as he read.

To be honest, I would have rather been on the beach than sat in the condo listening to Dad read a financial book to us, but at the same time, I was excited because I saw that Dad was excited. My Dad is a Doctor of Chiropractic. At that time, he owned a chiropractic clinic in Oregon. He was in practice long before I was born.

But it was on that vacation, and specifically the message in that book, Becoming Your Own Banker, that changed the course of our family’s life forever. Here’s an introduction to the Infinite Banking Concept and how McFie Insurance (formerly Life Benefits) got started.

An Introduction to Infinite Banking Life Insurance

The founder of the Infinite Banking Concept, R. Nelson Nash, served in the United States Air Force, worked as a forestry consultant and later became a life insurance agent and a real estate investor. To get money for his real estate investments prior to the 1980s, Mr. Nash was accustomed to paying 9.5% on the money he borrowed. But in the early 1980s, interest rates on the money he owed jumped to 23%! In his book he wrote, “There I stood owing $500,000 under those circumstances.”

According to Mr. Nash, “The basic idea revealed in the Infinite Banking Concept was born over a period of many, many months at 3:00 to 4:00 am in the kneeling position praying ‘Lord please, show me a way out of this financial nightmare that I have created for myself.’” He writes, “The answer came back about like a baseball bat across the eyes…You can get to money during these awful times, at 5% to 8% from three different life insurance companies through policies that you own. The only thing that limits how much you can get to is the same thing they tell you at the bank when you ask them how big of a check you can write – how much have you put in?’”

But exactly what is infinite banking life insurance? The Infinite Banking Concept is basically the idea that by funding one or more properly designed dividend-paying Whole Life insurance policy(ies), you will have guaranteed access to cash that you can leverage for anything you choose.

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Now, back to the beach condo where I had an introduction to IBC

When we got home from vacation, Dad quickly dug out the term life insurance policies he owned to see if they were convertible to Whole Life Insurance.  Unfortunately, they weren’t. But he met with someone who designed a dividend-paying Whole Life insurance policy like Mr. Nash described in his book.

A Chiropractor teaching financial wellness

Soon, Dad was on the phone telling family and friends about the Infinite Banking Concept. During the week, in his clinic, he would also tell his patients about the book and share the concept with them too. A few months later, he decided to get his life insurance producer’s license, so he could design, sell, and service Whole Life insurance policies.

Over the next few years, Dad provided education about the Infinite Banking Concept to so many people that he retired from chiropractic and sold his clinic so that he could spend more time teaching about infinite banking life insurance. But it wasn’t just Dad’s business. Mom was working alongside him, and even as teenagers, we started helping however we could.

If you’ve researched very much about the Infinite Banking Concept, there’s a good chance you know my Dad as Dr. Tom McFie. You may have even read one of his books or seen one of his video presentations on YouTube. In fact, if you don’t already have it, you can get his most popular book, Prescription for Wealth, as a free digital download. The forward to Prescription for Wealth was written by Mr. Nash himself.

The Infinite Banking Concept in Danger

As the Infinite Banking Concept caught on, more and more people began to want dividend-paying Whole Life insurance policies. Life insurance agents around the country began to take note. Some agents loved the idea, some agents loved the thought of using the idea as a sales system to sell more life insurance. This created a problem. To design a good policy that works well for the Infinite Banking Concept, you have to minimize the base insurance in the policy and increase the paid-up insurance rider. It’s not hard to do, but commissions are paid directly in relation to how much base insurance is in the policy. So, cutting down the base policy also cuts an agent’s commission.

Some agents are willing to cut their commission to design a good policy for the customer, but many agents are not. Unfortunately, many life insurance agents told their customers that they were writing an “Infinite Banking Policy” but ended up writing them a bad Whole Life insurance policy, or even worse, some type of Universal Life insurance policy, whether it was a Variable Universal Life insurance policy or an Indexed Universal Life insurance policy.

The Infinite Banking Concept started to get a bad name, in fact, a very popular Google search used to be, “Is the infinite banking concept a scam?” Many people were getting a bad taste in their mouths about the Infinite Banking Concept because they were getting bad policies.

Another threat to the concept came because some life insurance agents started calling life insurance policies “banks”. This language caught the attention of some state regulators and restrictions ensued.

The Concept Today

Things have changed over the last several years. The IBC is still around, and it still works. Mr. Nash’s son-in-law, David Stearns, still runs the company Infinite Banking Concepts, which among other things, sells the book Becoming Your Own Banker. Before Mr. Nash died, an institution for certifying agents was formed by Nelson Nash, David Stearns, and two other men, Carlos Lara, a consultant from Tennessee, and Robert P. Murphy, a senior economist at the Independent Energy Institute.

The institution, now called the Nelson Nash Institute, was formed after the Infinite Banking Concept was facing serious danger from the life insurance profession. Will the institution protect the brand by defining what the Infinite Banking Concept is and certifying Infinite Banking Practitioners? Time will tell. You can read my Dad’s thoughts on that here.

What Makes Infinite Banking Infinite

IBC is often dubbed “infinite” due to its flexible and multifaceted approach to personal finance management, particularly through the use of whole life insurance policies. This concept leverages the cash value component of whole life insurance policies as a personal banking system. Here’s  examples to illustrate the infinite nature of this concept, starting with how a normal bank operates using your money:

1. Bank Uses a Depositor’s Money in Infinite Ways: Traditional banks use depositors’ money to make loans, invest, and engage in various financial activities to generate profit. Similarly, in the IBC, individuals use the cash value of their life insurance policies like a bank uses depositors’ funds. They can borrow against the cash value for various purposes, essentially using their policy in numerous ways, much like a bank.
2. Policy Loans for Any Purpose: As mentioned, policy loans can be used for virtually anything, from buying cars to financing business equipment. This flexibility is a cornerstone of the IBC, allowing policyholders to access their capital without the restrictions often imposed by traditional lending institutions. This access to funds, for any reason, without having to qualify for a loan in the traditional sense, is what makes the concept seem “infinite” in its utility.
3. Financing Business Ventures and Responsibilities: Using policy loans to finance business liabilities, insurance, employee benefits, or even to inject capital into partnerships, joint ventures, or as an employer, showcases the versatility and infinite potential of the IBC. Businesses require a myriad of financial products and services, and the ability to use the IBC for these purposes underlines the concept’s adaptability to various financial needs.
4. Death Benefit Reimbursement: The death benefit aspect adds another layer to the IBC’s infinite nature. Not only does the policy serve as a financial tool during the policyholder’s life, but it also provides a financial legacy upon their death. This can be seen as an infinite loop of financial utility, from the policyholder’s active use of the policy’s cash value to the ultimate payout of the death benefit to beneficiaries.
5. Life Insurance on People We Lend Money: By purchasing life insurance on key individuals within a business or investment venture, the IBC can further secure financial operations. This strategy protects against the loss of crucial personnel or partners, ensuring that the financial foundation built through the IBC remains solid, even in the face of unexpected events.
6. Creating Financial Ecosystems: The concept can extend to creating financial ecosystems within communities, businesses, or groups where policies are interconnected, providing financial support and stability to the entire network. This could be through partnerships, joint ventures, or employer-employee relationships.

The “infinite” aspect of the Infinite Banking Concept is not about limitless funds but rather about the limitless ways in which the policyholder can utilize the policy’s financial mechanisms to serve various personal, business, and legacy-building purposes. The concept encourages individuals to think creatively and strategically about their financial planning, leveraging the unique features of whole life insurance to meet an expansive range of financial needs and goals.

Other Names for a Similar Idea

Today, there are many different programs with different names that share the same root idea of using a good dividend-paying Whole Life insurance policy to build a source of guaranteed available capital that you can manage and use for whatever you choose. Here is a list, by no means exhaustive, of other similar programs that utilize the root idea of the IBC:

• Bank on Yourself
• The Perpetual Wealth Code
• The Perpetual Wealth System
• Privatized Banking
• Private Family Banking
• Private Family Financing
• Prosperity Economics
• Wealth Beyond Wall Street
• Your Family Bank
• Your Financing System
• Infinite Banking Life Insurance

At the end of the day, you will find that any of these programs are only as good as the people behind them…whether it’s the person inventing it, marketing it, or teaching it.

How to Use the IBC Today

Individuals and businesses can benefit from infinite banking life insurance. Dividend-paying Whole Life insurance is readily available and can be designed to maximize cash value and minimize the death benefit, just like Mr. Nash described in his book Becoming Your Own Banker. The challenge is finding the right agent who is willing to design a good policy, teach you how to use it correctly, and remain available to help you with your policy.

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1. Make sure that you understand the different types of insurance, so you don’t get bamboozled into buying a bad life insurance policy. There is a video on YouTube called How Life Insurance Works to help guide you. 
2. Learn How to Read a Life Insurance Illustration so that you can tell if an agent is showing you a good life insurance policy.

The internet is your friend, and your enemy, because the right and the wrong, the good and the bad, the true and the false, and everything else in between is right in your face. As always, use discernment and heed this advice from Abraham Lincoln.

If you are interested in infinite banking life insurance and are in the market to get a good policy, I’m biased, but I recommend our family’s company, McFie Insurance. Not only have we specialized in setting up good policies for use with the Infinite Banking Concept for over 16 years, but we also own and use the same type of policies personally. If you like our educational materials and are comfortable with our recommendations, please consider working with us. You can schedule a free strategy session with us to get started.

If you already have policies, or you are currently working with another agent, you can get what is called an independent insurance review. An independent insurance review is where another life insurance professional looks over your policy, or illustration, and provides you with a report. Depending on where you get your insurance review, the review may be free or you may have to pay. Either way getting a second opinion can be invaluable. Our family’s company, McFie Insurance, offers an independent insurance review free of charge. Contact us today if you’re interested in making sure your policy is well-designed and working for you in the right ways.

Keeping the Infinite Banking Concept Alive

Whole Life insurance is still the premier financial asset. It provides guaranteed growth, options, certainty, liquidity, and tax benefits…all with zero market risk. It limits tax risk, hedges against inflation, and lets you pass on wealth tax-free when you die.

Whether the Infinite Banking Concept continues to exist as a brand or not, our family keeps Mr. Nash’s idea alive. It’s a brilliant idea. It helps people keep more of the money they make, grow their wealth, and have financial peace of mind. 

We teach individuals, business owners, and families, in all 50 states, how to use dividend-paying Whole Life insurance to create exponential wealth. I don’t see that changing anytime soon.

Whether you’re interested in learning more about infinite banking life insurance or looking to start using the concept with your own policy, contact us to schedule a free strategy session.

Ben T. McFie

There's a lot of confusion around finance; there's so much to know and it's frustrating when you don't know enough to make the best financial decisions. I like to bring clarity to financial matters so people can make good financial decisions that will help them live wealthier more fulfilling lives.