Infinite Banking Concept [aka Life Insurance]

[Samuel Choi]

I recently listened to the Millennial Money Podcast where Chris Naugle talks about using a specific type of life insurance policy to "become your own bank" and build a foundation for wealthy building.

The idea is that you are able to take a loan out for 90% of your premiums. The loan comes out of the life insurance company's general account at 5% simple interest (paid annually) and technically you don't have to pay it back as it will be taken off your death benefit. The cash value in your policy continues to compound at 5.6%-6% (4% guaranteed, 1%-2% dividends) for the full amount. It's like an appreciating HELOC?

Just wanted to post and see if anything is familiar with the concept or have used it for real estate investing (i.e. hard money lending, down payments, etc.). I probably didn't explain it thoroughly and welcome any questions/critiques.