You are interested in becoming your own banker using whole life insurance, but you don’t know where to start. Choosing the best whole life company for infinite banking is important. We have our opinions. Listed below are our top 5 infinite banking companies.
Do you ever feel like your bank is holding you hostage? With traditional banks, you deal with their fees and pitiful interest rates. But what if there was a better way? What if you could create your own bank using a whole life insurance policy? By properly designing the policy for cash value growth, you can use the cash equity in your policy to borrow against for future purchases. You can basically say goodbye to banks and use your whole life policy to finance your life.
There is a proven approach to personalized banking known as the “Infinite Banking Concept,” which allows individuals to become their own bank. Economist Nelson Nash developed this approach and provides people with the ability to access their money at any time by borrowing from themselves and then repaying back into the account. Using this method gives you much more flexibility than traditional banking options.
How do we determine the best company for Infinite Banking?
If you are considering the Infinite Banking concept so that you can finance major purchases with your own money, check out the following recommended guidelines to get your bank up and running:
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- A mutual insurance company that offers dividends and has a great reputation for paying dividends on whole life insurance policies.
- One with very high ratings from all of the national rating companies.
- One that offers policies that are “non-direct recognition” so that your dividends will not be impacted by policy loans.
- One that allows you to receive dividends as paid-up additions, which creates additional “mini-policies” that will also earn interest and dividends. Doing so helps your bank receive funding sooner.
- One where you can purchase a whole life policy with a 10-pay periodic premium so that your cash value account will grow quickly enough for you to borrow funds as soon as possible.
- One that offers a “cash value” rider to your policy so that your designated beneficiaries will receive the death benefit PLUS the cash value of your life insurance policy.
Our Top 5 Insurance Companies for Infinite Banking
Now that you understand the Infinite Banking concept, it’s time to choose a whole life insurance company that will be best suited to meet your expectations in the future. Here are our top five go-to participating whole life companies:
Mutual Trust for Infinite Banking
| Criteria | Result |
| Mutual or Stock Company? | Mutual |
| Dividend Payment Performance | Level or increased since 1909 |
| Loan Interest Rates | 4% |
| Financial Stability | A.M. Best: A (Excellent) |
| Product Flexibility | Multiple periodic payment plans |
| Direct or Non-Direct Recognition | Direct Recognition |
| Rider Availability | 10 riders to choose from |
Mutual Trust offers a variety of whole life policies tailored to specific needs in the insurance market. We value their ability to customize policies to use with infinite banking. Mutual Trust Horizon Value and Horizon Guarantee are premier choices for those seeking permanent coverage with a focus on cash value accumulation, offering guaranteed level premiums and a non-forfeiture benefit option. Mutual Trust’s whole life insurance policies cater to those looking for high early cash value growth.
Business uses may include Buy/sell funding, key person protection, split-dollar arrangements, executive bonus programs, and deferred compensation.
Mass Mutual for Infinite Banking
| Criteria | Result |
| Mutual or Stock Company? | Mutual |
| Dividend Payment Performance | 6% currently – 15 yr average of 7.14% |
| Loan Interest Rates | 5% to 8% |
| Financial Stability | A.M. Best A++ (Superior) |
| Product Flexibility | 10, 20, age 65, and 100 pay |
| Direct or Non-Direct Recognition | Direct and Non-Direct Recognition |
| Rider Availability | 6 optional riders to choose from |
MassMutual is one of the highest-rated life insurance companies in the United States. Its strong financial position and high customer satisfaction ratings indicate that it is positioned to continue to be a leader in the life insurance industry. MassMutual is highly regarded for its whole life insurance policies, thanks to robust financial stability, the potential for higher dividends than most of its competitors, and strong customer satisfaction. The company offers a variety of whole life options. Mass Mutual whole life policies can be designed to accommodate different financial goals and coverage needs. Infinite banking requires policies to be designed for high early cash value.
National Life for Infinite Banking
| Criteria | Result |
| Mutual or Stock Company? | Mutual |
| Dividend Payment Performance | 5% |
| Loan Interest Rates | Calculated at the time of the loan |
| Financial Stability | A.M. Best A+ (Superior) |
| Product Flexibility | Whole Life, IUL and Term |
| Rider Availability | 10 optional riders to choose from |
National Life offers TotalSecure whole life that allows additional premiums to pay up portions of the policy. Low required premium, strong death benefit, high cash value guarantees helps National Life to be an infinite banking leader. National Life caters to those seeking both cash value accumulation and permanent coverage.
Ameritas for Infinite Banking
| Criteria | Result |
| Mutual or Stock Company? | Mutual |
| Dividend Payment Performance | 5% or more over the last 10 years |
| Loan Interest Rates | 4.25% plus |
| Financial Stability | A.M. Best A |
| Product Flexibility | 10 pay, 20 pay, pay to age 65, and 100 pay |
| Direct or Non-Direct Recognition | Direct Recognition |
| Rider Availability | 6 optional riders to choose from |
Ameritas Life Insurance offers a wide variety of policy options to choose from, all with different features and benefits. You can tailor your policy to fit your specific needs, and even add on additional riders to further customize your coverage. Ameritas’s whole life insurance provides a secure financial foundation with permanent lifetime death benefit protection. Key features include a guaranteed death benefit that never decreases, guaranteed premiums, and a cash value that grows at a guaranteed interest rate plus dividends, offering a reliable safety net for policyholders.
Penn Mutual for Infinite Banking
| Criteria | Result |
| Mutual or Stock Company? | Mutual |
| Dividend Payment Performance | Level or increased for more than 10 years |
| Loan Interest Rates | 5% |
| Financial Stability | A.M. Best: A+ (Superior) |
| Product Flexibility | Multiple periodic payment plans |
| Direct or Non-Direct Recognition | Direct Recognition |
| Rider Availability | 7 riders to choose from |
Penn Mutual, a pillar in the life insurance industry for over 175 years, is celebrated for its A+ rating for financial stability and low complaint index. Their whole life insurance offerings, like Guaranteed Whole Life II, deliver lifelong coverage, a fixed death benefit up to age 121, and potential yearly dividends. Penn Mutual policies come with multiple rider options to tailor coverage to individual needs.
Infinite Banking Pros and Cons
Pros of Using the Infinite Banking Concept:
- Tax Benefits: By structuring whole life insurance policies correctly, you can enjoy tax-free growth and potentially tax-free distributions
- Guaranteed Return on Investment: Whole life insurance offers a guaranteed return and avoids market volatility, providing a stable investment.
- Liquidity: The policy’s cash value can be borrowed at any time, offering liquidity and the ability to finance purchases without a bank being involved.
- Continued Earnings: Your policy continues to earn interest and dividends even when you take out a loan against it.
Cons of Using the Infinite Banking Concept:
- Complexity: The concept can be complex and usually requires an advisor’s guidance to structure properly.
- Premium Commitment: Whole life policies come with consistent monthly or annual premium payments, which can be a significant financial commitment.
- Time Commitment: Although you have access to cash values as early as the first year, you need time on your side to see significant cash value increases. It may take several years for the policy’s cash value to equal the paid premiums, limiting early banking use.
Infinite Banking Conclusion
All the life insurance companies listed above would be excellent choices to fund your Infinite Banking plan, but you will need guidance. We are here to advise and properly design your perfect Infinite Banking Plan.
Start by using the Infinite Banking Calculator on this page, or give us a call to learn more about you and what plan design will work the best.
FAQs
What is Infinite Banking?
Infinite Banking is a financial strategy where you use a whole life insurance policy to create a personal banking system, allowing you to borrow against the policy’s cash value for personal use while still earning dividends.
Which life insurance companies are best for Infinite Banking?
Companies like Mutual Trust, MassMutual, National Life, Ameritas, and Penn Mutual are considered ideal for Infinite Banking due to their strong dividend performance, financial stability, and policy flexibility.
How do dividends work in Infinite Banking?
Dividends in Infinite Banking are paid by mutual insurance companies to policyholders. They can be reinvested as paid-up additions, which increase both the policy’s cash value and the death benefit over time.
What is the difference between direct and non-direct recognition policies?
Direct recognition policies adjust dividends based on outstanding loans, while non-direct recognition policies do not, making the latter often more favorable for Infinite Banking.
What are the pros and cons of Infinite Banking?
Pros include tax benefits, guaranteed returns, liquidity, and continued earnings on the cash value. Cons include the complexity of setup, premium commitments, and the need for time to build significant cash value.
