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Dividend Paying Whole Life Insurance, the "Perfect Vehicle" to Perform the Banking Function? Thumbnail

Dividend Paying Whole Life Insurance, the "Perfect Vehicle" to Perform the Banking Function?


You’ve been practicing what the popular financial entertainers preach on the radio and can’t understand why you’re barely getting ahead. You keep thinking:

What am I doing wrong?

Could a potential problem be that you’re relying on third parties to finance your life?

When this happens, and you have little to no access to the money you’ve saved (qualified plans have penalties and restrictions for use and home equity isn’t very liquid), you need to start looking at different solutions.

Albert Einstein is credited with saying “doing the same thing over and over again and expecting a different result is insanity.”

Do you want to keep getting more of the same?

How do you find a better financial path?

Now is the time to lean in and educate yourself, because this conventional thinking isn’t serving you or your financial goals.

The truth is that the banking function will and is being performed in your life. Money has been flowing away from you (equaling lost interest), and taking control and performing the banking function in your life without relying on third parties can change the flow of your money. It can bring money back to your personal economy (the interest you didn’t see before, but now realize you’re losing).

What concept do you need to perform the banking function?

The Infinite Banking Concept!

Nelson Nash, the creator of the infinite banking concept, wrote a book called Becoming Your Own Banker. In it, he discusses the mind shift or “paradigm” shift one’s thinking must go through to “Become Your Own Banker,” and the human problems that have to be overcome to master the IBC.

Nelson recommends using dividend paying whole life insurance to implement the IBC. This may seem confusing, since many financial entertainers say this is a TERRIBLE place to keep money, so let’s dive in to why Nelson recommends this vehicle.

What characteristics would be essential to perform the banking function?

You would need to be able to deposit, withdraw, borrow and repay money. These require an account that gives you:

  • Complete control
    1. You need to be first in line to access your capital (cash surrender value) when you want and for whatever you want.
  • Ultra-liquid money
    1. Accessing a high percentage of your capital (contributions and growth) in a short period of time, with no penalties and very little paperwork is essential.
  • Guaranteed growth
    1. You need to know that your account will have more capital in it every single day.   That also means it can’t lose value.

Okay we have the essentials, but what kind of perks come with this account?

  • Tax deferred growth
    1. Which can be accessed tax free with proper design and implementation.
  • No hidden fees
    1. You see the net numbers, not gross. NO surprises.
  • No restrictions for use
    1. No need to be a qualified expense.
  • Private system
    1. Creditor protection which varies state to state. No need to check your credit score!
  • Share in company profits
    1. Dividends are paid to policyholders in a mutual company when declared.
  • Safety
    1. We use companies with “A” rated financial strength, judged by outside agencies.
  • Leverage
    1. A high percentage of your cash surrender value can be used as collateral.
  • Death benefit protection
    1. Your policy debts will be paid off and you can pass a legacy on to your family by keeping your policy in force until death.


Whole life insurance is fundamentally different than other types of insurance.

You need to understand how whole life insurance is fundamentally different than other types of insurance that you buy. Let’s look at homeowner’s insurance first, and then compare it to whole life insurance.

When you purchase homeowner’s insurance, you are insuring in case of a fire, tornado, or vandalism for example. All of these things could happen, but the risk is relatively small, AND doesn’t increase as years pass. You pay premiums to a company who offsets this risk to you, but once the premiums are paid you no longer have access to the money.

With whole life insurance, you’re paying toward something you know will happen – eventually, you will pass away. Death is a certainty of something that will happen, not a possibility. You also pay premiums to a company that offsets this risk to you (and your family), but with whole life you have a cash value component. This is capital that you have a contractual right to borrow against or withdraw if you so choose. This component only comes with life insurance! At any point you could walk away and have the cash surrender value, although this is not recommended.

Once your homeowner’s insurance policy is canceled or completed, you have no value left to you.

Dividend paying whole life insurance looks promising, now for implementation!

You want to be careful at this point. You have done your research and know the IBC and dividend paying whole life insurance is an ideal way to “Become Your Own Banker.” To get the best results, you will need a policy that is designed as Nelson Nash taught.

There are many whole life insurance policies available today, which can make your decision complicated. Everyone will say they know what the IBC is, and can design a policy for you. This is where people may find regret just a few short years down the road. We recommend that you go to the Nelson Nash Institute and use the practitioner finder if you don’t want to work with us. Our team wants your IBC plan to be successful!

Now, let’s talk about what your plan will provide you once you get your first IBC policy in force.

  • Immediate Liquidity
    1. You will have access to the capital (cash surrender value) of your policy within 30 days.
  • Control
    1. You have the right to access the capital if you want (through loans or withdrawals), and if not, the insurance company keeps the money at work and growing for you.
  • Flexibility
    1. You will be able to pay your entire years premium at one time or spread it out over the course of the year. When designed correctly (and placed with the right companies), you don’t have to pay the entire premium every year, but if you have an outstanding year and want to make up for not fully funding your plan the prior year, you can.
  • Guarantees
    1. With dividend paying whole life insurance, your cash surrender value is guaranteed to go nowhere but up in value as long as you pay your premiums.

Putting it all together.

As Nelson said, the IBC is “ridiculously simple.” The hardest thing you have to do is change your way of thinking. Mike Everett and Chris Bay have an analogy I’d like to share with you:

If you have a tractor, and have been driving down the same path for decades to a field, you have developed ruts. You don’t even have to steer the tractor when it’s in these ruts, it just goes. If we aren’t conscious about how we think about money, we don’t even steer, our mind just goes. This is how your mind would normally think about money, just like the financial entertainers tell you to, but you have to “grab the wheel” and get out of your ruts.

Once you have accomplished this, you’re on the downhill slide. The whole life insurance policy works on autopilot, and you can jump in and use it whenever you need access to the capital. When whole life insurance is properly designed with a mutual company, you have every characteristic you need to perform the banking function. By simply controlling this in your life, you can make a greater impact on your financial future than any form of investing will do for you.

Nelson has 5 main principles to achieve success with the IBC:

  • Think long term
    1. This system you’re building will benefit YOU and FUTURE GENERATIONS, so we keep this in mind when designing your plans.
  • Don’t be afraid to capitalize
    1. “If you want a little out of your system, put a little into it, if you want a lot out of your system, put a lot into it.” – Mike Everett
  • Don’t steal the peas
    1. We will teach you why you need to pay retail for your own capital. “You finance everything you buy. You either pay interest to someone else or you give up interest you could have earned. There are NO EXCEPTIONS. Be an honest banker.” – Nelson Nash
  • Don’t do business with banks
    1. Other than a checking and savings account. Banks inflate the money supply, which weakens the purchasing power of your dollar.
  • Rethink your thinking
    1. It’s easy to fall into your old way of thinking. Constantly educate yourself on IBC. I personally read Nelson’s book 4 or more times a year!