Infinite Banking-Starting your own or buy into someone else's company?

Question

I understand how it works. I'm trying to figure out if it would be worth it to start my own business or use someone else's service that is already established. Also, anyone who would recommend who they use? I've also been toying with the idea of changing my career path to insurance to learn more of the inside day to day of the business and maybe make some good contacts. Would love some sage advice. I have been considering Chris Naugle-anyone have experience with his company?

Thomas Rutkowski · Answer

@Josh St Laurent

Leveraging the cash value of a maximum over-funded policy absolutely makes sense for real estate investing. It allows the investor to put their money to work in two places at one time. This allows for greater wealth accumulation over time.

@Laura Higgs

Stay away from companies offering "systems". Just talk to an agent who specializes in maximum over-funded policies.

Thomas Rutkowski · Answer

It's great that you want to offer comprehensive financial planning advice. However, the original poster was simply asking about the best way to go about getting a policy set up for a very specific task. Real Estate investors are running a business. And for savvy business owners who get it, maximum over-funded policies are simply a tool to accelerate wealth accumulation over time.

This is a case of "when all you have is a hammer, everything looks like a nail". Not everyone is looking for comprehensive financial planning advice.

Despite the creds that you whipped out (appeal to authority fallacy), you still don't seem to understand how life insurance works under the hood. I purposefully made the words maximum over-funded policy bold and italicized just for you. But it was in vain. If you understood these policy designs, you would never make a statement like "It can take years to access the cash value". My clients can access a significant amount of cash value immediately.

It's also important to understand that in a maximum over-funded policy, the fees and expenses are much lower than a traditionally-designed policy. In a properly-designed policy, the fees add up to only 15% of the premium. That means 80-85% goes to the cash value and can be accessed via policy loan immediately.

A client funding a policy with $100,000 annual premiums can access ~$85,000. It only takes a few years of "The Double Play" to recover that loss.

I see you are also repeating the "IUL is a scam" nonsense. This again shows me that you don't understand how these policies work under the hood. No one who understands life insurance would say something ridiculous like that. I'm not an "IUL Guy" or a "WL Guy". I use Both in my business.

Both IUL and WL work off the exact same mortality tables. Insurance companies invest in the same asset classes, that generate roughly the same returns. They really only differ in how the gains of those investments are credited to the policy holders. And, this may come as a shock, but the cost of insurance in a WL increases just as much as in an IUL... That's how life insurance works.

Both IUL an Whole Life are great tools. For the person that can tolerate the variability of returns, the IUL is probably the better choice with the best long-term prospects for growth.

Deb S. · Answer

@Josh St Laurent the link in your reply isn't working?

Also, I disagree with your reply to @Laura Higgs. I am an agent and while you are partially correct - the majority of life insurance policies are structured for leaving the death benefit to the insured's beneficiaries.

However, when a client asks for an 'infinite banking' policy, they are asking for a vehicle to accumulate cash that has tax advantages, moderate growth, liquidity and no exposure to market volatility. These types of policies are structured the opposite of a typical policy where the goal is the large death benefit amount.

The goal of an IB policy is cash accumulation - not death benefit. Policies like this have a minimum allowed death benefit amount (as specified by the IRS) based on several factors. This is the goal because the client wants the majority of the premiums being paid to go to cash value and compound interest over time and NOT go towards the cost of insurance-hence the low DB amount that starts the policy.

@Laura Higgs I would recommend an established company-especially if you are new to the industry. You want somewhere that provides training and and resources for you to reach out to for help when needed. I work for a broker so I'm not a captive agent. This means I can sell insurance from many carriers (not just one) and if I leave to go somewhere else, I take my clients with me so they don't get assigned an agent they don't know.

Josh St Laurent · Answer

Don't fall for this @Laura Higgs Whole life insurance is designed to leave money to your heirs and is not a funding vehicle for real estate or an "infinite bank" Here is a post with more detail

https://www.biggerpockets.com/forums/519/topics/1231319-how-smart-investors-use-life-insurance-to-build-and-protect-wealth#post_6978183

Josh St Laurent · Answer

@Deb S. That's so weird about the link, I appreciate you pointing that out!

I'll give some more context since the link isn't working.I've been insurance licensed for 13 years, started my career at Mass Mutual, and have put in place thousands of policies for clients over the years.  After Mass Mutual, I spent 10 years at Fidelity Investments, specializing in different areas of finance, including managing a team specializing in insurance planning.  I then started my own virtual family office focused on helping real estate investors.  I have a Masters in Advanced Financial Life Planning, a CFP (Certified Financial Planner), CFT (Certified Financial Therapist), and am a candidate for both the EA and APFC.  I teach aspiring financial planners at the graduate level at Golden Gate University and often hear this sort of sales pitch for IULs, Infinite Banking, etc.  Earlier today, the Institute for Fiduciary Standards gathered, and part of what was discussed was the negligence of the "infinite banking" community in not educating themselves on holistic financial planning and how they violate their fiduciary duty to clients.I believe that @Thomas Rutkowski,@Brandon Beaudoin, and @Deb S.  believe in what they're selling.  I thought the same when I worked at Mass Mutual and had only been educated on insurance concepts from salespeople.  As someone who doesn't work on commissions, charges flat fees and has no incentive to sell anyone anything, I like to offer a different viewpoint when I see these types of posts.  Especially on BP where it could really hurt a RE investor. Brandon is amazed at how many people choose to ignore facts so let's cover a few that might help as you look into committing to a whole life insurance policy.

1. Cash Value Takes Time

Many IULs (Index Universal Life policies) may take 7–10 years before you can borrow a meaningful amount of cash value. This can be a big roadblock if you need funds sooner to secure deals.

2. Fees and Commissions

A large part of your early premiums may go toward commissions and policy fees. Over time, the cost of insurance, monthly charges, and surrender fees (which can last 10+ years) reduce how quickly your cash value grows.

3. Policy Loan Costs & Performance

You’ll still pay interest when borrowing against your policy. If the index underperforms—or if caps and participation rates limit returns—you might not get the growth you expected.

4. Other Funding Options

For most real estate investors, it’s worth comparing mortgages, HELOCs, or partnerships. These options can provide simpler and cheaper access to funds, especially if rapid property acquisitions are your main goal.

Life insurance is a powerful tool when used for the right reasons—like estate planning or key-person coverage. But if real estate investing is your priority, it’s important to consider all the costs and timelines before committing to an IUL. Hope this helps!P.S. I know this will anger the infinite banking supporters on this thread.  My intention is only to educate not to argue.  I challenge you all to learn about some alternatives and have more tools in your toolbelt to help clients and the people you care about!

Brandon Beaudoin · Answer

I'm not mad, most everything you said is (shockingly) incorrect and appears as though you actually don't know how IBC using high early cash value works.  Pretty wild with all that "street cred" you just shared with us.

I've seen many of your posts.... almost all seem like virtual assistants and AI responses.

I think you may want to look over your facts again....

Brandon Beaudoin · Answer

Absolutely makes sense.  I'm amazed at how many people choose to ignore facts.....

Josh St Laurent · Answer

@Thomas Rutkowski, you did a great job explaining how IULs work. I watched your YouTube video on The Double Play to better understand your perspective. I’m glad you brought up the hammer-nail analogy—do you ever feel that, since insurance is the only product you offer, everyone ends up being sold insurance?

On LinkedIn, you describe yourself as a Life Insurance Guru. Out of curiosity, what does it take to become a guru? Is there specific education or training involved, or is it more about experience in the field?

For context, I don’t have a stake in whether people do or don’t buy IULs—I just want to get to the truth. So I’ll ask again: is there something we’re all missing? Do you have insights as a guru that aren’t covered in graduate-level finance or CFP curricula?

One thing I’d like to clarify—I’ve seen you suggest that I don’t fully understand infinite banking. I’ve read Nelson Nash’s books, watched videos (including yours), and continually seek out alternative viewpoints with an open mind. I’d love for you to teach me something new.

Last semester, in the Risk Management & Insurance Planning course I taught, we did a deep dive into IULs, analyzing policy illustrations to examine the risks, upsides, and downsides. I love getting into the weeds on strategies like this. A recent example: I was a judge for a financial planning competition hosted by NAPFA (The National Association of Personal Financial Advisors)—a leading organization for fee-only fiduciary advisors. One student incorporated an infinite banking strategy into their plan, and their clients ended up with the lowest projected net worth compared to their peers.

It’s also important to acknowledge a key distinction in our industries. You’re an insurance agent who sells commission-based products in a notoriously underregulated industry, while I’m a Registered Investment Advisor (RIA) in 49 states. I'm regulated by FINRA and the SEC and have a fiduciary duty to act in my clients’ best interests. Our professional incentives are fundamentally different, which makes a meaningful discussion about financial strategy even more critical.

I also have to ask: Are you ever curious about financial strategies other than insurance? In another post on this same forum, I noticed that you had never heard of the Mega Backdoor Roth, which is an incredibly powerful strategy for the right client. Given that, have you ever considered pursuing your CFP?

I’m not saying infinite banking can’t be done—I’m saying it’s not the best strategy. Rather than going back and forth in a forum (which isn’t productive for anyone), why don’t we hop on a Zoom call? I’d be happy to walk you through some alternative wealth-building and tax-saving strategies, and who knows—maybe I’ll learn something new from you as well.

Josh St Laurent · Answer

Don't take my word for it!  I thought some third-party viewpoints could be helpful here:https://www.personalfinanceclub.com/is-iul-a-scam-yes/https://allaboutmoney.substack.com/p/indexed-universal-life-...https://www.jrcinsurancegroup.com/5-iul-scams-to-watch-out-f...As always, I love learning, so if you insurance agents know some secret, let us all know!  I've read Nelson Nash's books Becoming Your Own Banker and Building Your Warehouse of Wealth to educate myself on alternative viewpoints.  Are there other books you suggest?  Should I take the NNI course on Infinite Banking?  Will I learn more than the CFP and a Masters degree in finance?  You all have so much conviction on the product you are selling!I'm looking forward to learning more about what I am missing here.

Josh St Laurent · Answer

@Brandon Beaudoin , I'm glad you're not mad 🙂. I wish you all the best in your commission-based life insurance sales business.  We are all out here doing our best to help clients, and I know you are also doing your best.

Infinite Banking-Starting your own or buy into someone else's company?

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