Your Family Bank (YFB) is a financial education approach designed with families in mind. Unlike traditional financial advisors who often focus on selling specific products, YFB offers a comprehensive personal financial literacy program. This program helps people take immediate control of their spending, debts, savings, and taxes. YFB supports individuals, families, and business owners in managing all aspects of their financial lives, helping them grow their personal economies.

YFB provides the essential financial education necessary in today’s world. Additionally, YFB teaches you how to incorporate the Infinite Banking Concept (IBC) to maximize your lifetime earnings.  Here’s what you can expect to achieve with Your Family Bank:

• Reduce the volume of interest you are paying to lenders.​
• Get out of debt in a fraction of the time as your current schedule.​
• Increase your cash flow.​
• Decrease your taxes.​
• Create savings for major life expenses.​
• Retire with tax-favored income.

The Infinite Banking Concept (IBC) was created by Nelson Nash in the 1980s as a way for individuals to take control of their financial future by becoming their own bankers. Nash, an expert in finance, was influenced by the Austrian school of economics, which emphasizes that the value of money and goods are not always the result of traditional economic structures like supply and demand.  Instead the value of money and goods varies based on each person’s unique financial situation and needs.  He believed that traditional banking systems, with their high-interest rates and rigid loan terms, often put people at a disadvantage and limited their control over their wealth.

The Infinite Banking Concept offers an alternative by using the cash value of a properly structured Whole Life insurance policy instead of traditional bank accounts. By overfunding the policy with custom riders, you can borrow against the continuously compounding cash value, allowing you to manage your money more effectively. This approach reduces reliance on traditional banks and puts you in control of your financial goals.

Whole life insurance plays a crucial role in the Infinite Banking Concept (IBC), but it’s important to understand that Infinite Banking itself is not the same as whole life insurance. Instead, the concept works best when you, as the banker, use a properly structured whole life insurance policy as your “bank.”

The idea of using whole life insurance to build wealth isn’t new. For generations, business moguls like John Rockefeller used whole life insurance policies to amass and pass on wealth that still benefits their descendants today. Large companies also invest millions in whole life insurance policies to fund business expenses and take advantage of favorable tax benefits. Even banks consider whole life insurance as Tier 1 assets, reflecting its importance and stability.

In fact, whole life insurance was once taught as a college course at the Wharton School of Business. The course focused on using the cash value of insurance policies for various financial needs, such as funding business expenses, entrepreneurial ventures, investments, getting out of debt, and purchasing real estate.

When Nelson Nash created the Infinite Banking Concept, he didn’t invent the idea of using policy loans as an alternative to traditional banking or as a way to build private family wealth. What he did was give this centuries-old strategy a new name and made it more accessible to his clients. At SDR Wealth Solutions, we refer to this approach as Your Family Bank, a modern take on using whole life insurance to secure financial freedom.

In the Infinite Banking Concept, whole life insurance is a key tool because of its cash surrender value, also known as cash value. The cash value represents the portion of your death benefit that the insurance company makes available to you while you’re still alive. If you were to cancel your policy, this is the amount the insurance company would typically pay out. However, as long as you are alive and your policy is intact, you can use the cash value for personal or business loans, with your policy serving as collateral.

Unlike term life insurance, which only provides financial support to your beneficiaries only after you pass away, whole life insurance covers you for your entire life and offers a multitude of benefits to you while you’re still living.

There are two types of whole life insurance: participating and non-participating. The main difference is that with participating policies, you can receive dividends based on the insurance company’s profits. Non-participating policies do not offer dividends.

If you use a participating whole life insurance policy for Infinite Banking, your cash value increases in three ways: when the insurance company pays dividends, when you pay your policy premiums, and through a guaranteed interest rate.

Essentially, your “bank” in Infinite Banking is made up of the premiums you pay (your money) plus the guaranteed interest and potential dividends (money from your insurance company). Instead of storing your savings in a traditional bank account with minimal returns, you save within your dividend-paying whole life insurance policy, where it grows tax-free with a higher rate of return.

One of the key benefits of using the Infinite Banking Concept with your whole life insurance policy is the ability to use your accumulated cash value through policy loans that are tax-free. When you borrow against your policy’s cash value, you’re not required to pay taxes on the interest and dividends you’ve earned.  The amount borrowed is still considered present in your policy and therefore continues earning you interest.

Another advantage is that you have complete control over how you repay your policy loans. As your own banker, you set the payment schedule that works best for you.  In all actuality, the life insurance company does not require you to repay the loan if you choose not to.  If any portion of the loan remains unpaid, it will simply be deducted from your death benefit.  However, it is recommended to always repay the policy loans to ensure the policy’s internal rate of return performs at its optimal level.

This flexibility, along with the fact that your cash value continues to grow even while you borrow against it, is what makes policy loans a powerful tool in the Infinite Banking Concept. By using policy loans instead of withdrawals, you ensure that your wealth keeps growing, and you essentially borrow from yourself, keeping the interest within your financial plan instead of paying it to a bank.

Infinite Banking is not a get-rich-quick scheme. It’s a method of gaining control over your finances by eliminating unnecessary money leaks in your personal economy. The goal is to grow your wealth and increase your assets over time by using the cash value of a whole life insurance policy as your own personal bank.  As such, the concept provides you many advantages.

Liquidity

One of the biggest advantages of Infinite Banking is the improved cash flow it offers. Unlike traditional banks where getting a loan can be a lengthy process, you can request a policy loan from your life insurance company, and the funds are made available quickly. Whole life insurance is an extremely liquid asset, making it valuable for emergency savings. Whether you face unexpected medical bills, job loss, or home repairs, policy loans provide peace of mind. You can even use your insurance policy to pay yourself an income during a sabbatical, return to school, or take time off work to care for loved ones.

At SDR Wealth Solutions, we recommend funding a whole life insurance policy as a savings vehicle before exploring other investment strategies, such as real estate or the stock market. This approach creates a strong foundation from which to build from.

Control

Dividend-paying whole life insurance is low-risk and offers you significant control over your finances, especially through tax advantages and asset protections.

Tax Advantages

Whole life insurance is ideal for Infinite Banking due to its favorable tax treatment. Policy loans and the growth of interest and dividends within your policy are tax-free. Additionally, the death benefit is tax-free for your beneficiary and often exempt from estate taxes.

Asset Protections

Whole life insurance policies offer certain asset protections because they are private contracts between you and your insurance company. These protections can vary by state but may include shielding assets from searches, seizures, judgments, and creditors. Plus, policy loans won’t impact your credit score.

Protection Against Volatility

Whole life insurance policies are non-correlated assets, meaning their value isn’t tied to the ups and downs of the market.  This stability makes them an excellent foundation for the Infinite Banking Concept. Unlike market-based investments, which can lose value in a downturn, the cash value in your whole life insurance policy remains stable and continues to grow. It offers a safe, moderate, guaranteed return, providing a buffer against market volatility.

Certainty

The rate of return on your whole life insurance policy is guaranteed, as are your death benefit and premiums. This certainty is another reason why whole life insurance is ideal for Infinite Banking. Unlike other assets, such as 401(k)s or IRAs, where taxes on remaining funds may be uncertain, the death benefit from a whole life policy is tax-free. Additionally, your premium remains the same throughout the life of the policy, making it easier to plan and achieve your financial goals.

Cash Flow

Many people use Infinite Banking for a tax-free retirement. Since policy loans from your whole life insurance policy aren’t taxed, you can fund your retirement without worrying about future tax rates. This method also reduces the risk of running out of money during retirement, a concern for many whose retirement funds are tied to market-based investments. Some people even choose to stop funding qualified plans like 401(k)s or IRAs and rely solely on Infinite Banking for retirement.

Legacy

Infinite Banking with whole life insurance is a proven strategy for building generational wealth. The death benefit is tax-free and generally not subject to estate taxes. For larger estates, Infinite Banking can be used within an Irrevocable Life Insurance Trust (ILIT), allowing even significant estates to benefit from tax advantages that enhance wealth transfer to future generations.

Infinite Banking is not a one-size-fits-all strategy. It’s flexible and customizable, making its effectiveness highly dependent on your specific financial goals. Here are several key aspects to consider when determining if Infinite Banking is the right fit for you:

Qualification

Since Infinite Banking relies on whole life insurance as its “bank,” there is a qualification process. Qualification depends on factors like your health and age. At SDR Wealth Solutions we partner with top mutual insurance companies to help match your with the best options for your situation. While it’s generally easier to qualify when you’re young and healthy, it’s possible to get insured even in retirement—you’re never “too old” to start with Infinite Banking.

Cost

Whole life insurance premiums are significantly higher than those for simple term life insurance, but that’s because you’re not just paying for insurance. You’re also building a savings account within your policy that you can access anytime while earning guaranteed interest and potential dividends.  Remember, the primary purpose of your whole life insurance policy in this strategy isn’t the death benefit, but the living benefits. The goal is to protect your income and shield your wealth from bank interest rates, market volatility, creditors, and taxes.

Discipline

Infinite Banking is a well-established method for growing and protecting wealth, but it’s not a mainstream approach. To succeed, we assist your in taking control of your financial future and provide you a clear roadmap of your goals and timelines.  But ultimately you need to be disciplined and engaged in managing your finances in order to maximize your growth.

In a word… Yes!

Infinite Banking is a proven strategy that has been used by families for generations to grow and protect wealth. By using dividend-paying whole life insurance as your own personal bank, you can effectively manage your finances and achieve long-term financial goals. However, like any financial tool, the success of Infinite Banking depends on how well you use it and whether you have clear goals in place.

For faster growth and maximum benefits, we structure your dividend-paying whole life insurance with a Paid-Up Additions Rider (PUAR). A PUAR allows you to “overfund” your policy beyond traditional policies. This capacity for overfunding rapidly increases your cash value and death benefit, enhancing the power of your personal bank.

The more cash value you build, the higher your interest and dividend payments from the insurance company. You can then reinvest those dividends to buy more Paid-Up Additions, further increasing your policy’s potential. By adding a PUAR to your whole life insurance, we set it up for maximum growth and benefits over your lifetime.

SDR Wealth Solutions specializes in providing you with the proper tools and education so as to take advantage of the benefits of Infinite Banking. In addition to structuring your policy correctly, we’ll make sure it’s personalized to fit your unique financial needs and goals. We take an active role in continuing to educate and provide guidance, even after your policy is in place.