Infinite Banking eCourse > Lesson 1
Becoming Your Own Bank
Lesson 1 of 9 · About a 4-minute read · By Lane Kawaoka, PE · Updated November 2026
Short answer
Infinite banking means overfunding a dividend-paying whole life policy so its cash value becomes a pool of money you can borrow against, instead of going to a bank. Banks already hold large amounts of cash value life insurance on their own balance sheets. The idea is to use the same tool directly, with the costs and limits this course walks through.
This free course has 9 short lessons. Start here, then work through them in order using the menu. Each lesson has a video, the key ideas in writing, and a few questions investors in our community have asked us.
Infinite Banking – High-Level
“We all need life insurance… but was taught whole life insurance was the worse thing to do but now know that its just another tool in the toolbox.”
Infinite banking is a process in which whole life insurance plays a large part in. This course will go over the different parts of the infinite banking process, so you can be fully informed before you start to implement the process yourself!
The Dilemma of Traditional Finance
In traditional finance, people take their savings, store them in banks where there is little to no growth and invest in retirement accounts that give non-guaranteed returns. Retirement accounts are illiquid, penalize people for taking money out early, and restrict what investors can do with their cash!
How Traditional Banks Operate
Bank-Owned Life Insurance (BOLI)
Bank of America, Chase, and many other banks invest billions of dollars into life insurance to maintain and grow their businesses. See their asset and liability holdings below:
One of the ways traditional banks make a profit, is by acting as a middle man, using customers cash and investing it into Bank-Owned Life Insurance (BOLI)
What we want to do is get rid of the middle man and reap the benefits directly.
From my own investing
I built my framework for wealth building around three legs: alternative investments like real estate and private equity, tax strategy, and infinite banking. The first two get most of the airtime in our community.
Infinite banking is the one people either fall in love with right away or dismiss. This course is my attempt to walk you through how it actually works before you decide either way.
Infinite banking FAQ
What is infinite banking?
Infinite banking is using the cash value of a properly designed, dividend-paying whole life policy as a pool of money you can borrow against for investments and big purchases, then paying it back on your own schedule.
How is Accredited Investor Banking different from traditional infinite banking?
Accredited Investor Banking is our name for a policy design built for investors who move money in and out of private investments. Instead of a long multiyear payment plan, it is built around a larger funding in year one with the option, not the obligation, to add more later. It still has to stay within the insurer’s and the IRS limits.
Can I use term life insurance for infinite banking?
No. Term life has no cash value, so there is nothing to borrow against. It is the cheaper choice if all you need is a death benefit.
Is the cash value taxed?
Cash value generally grows tax-deferred, and policy loans are generally not taxed while the policy stays in force and under the MEC limit. If a policy becomes a modified endowment contract, withdrawals and loans are taxed gains-first. Confirm your situation with your CPA.
Who is infinite banking a fit for?
It tends to fit people with steady extra cash who want a place to hold reserves they can borrow against, and who plan to keep the policy for many years. It is usually not a fit if you are still building your first investment capital or might need to cancel the policy in the first few years.
Key takeaways
- Infinite banking uses the cash value of a properly designed whole life policy as a personal source of liquidity you can borrow against.
- Large banks hold bank-owned life insurance (BOLI) as part of their own reserves.
- A policy is a place to hold and move cash, not a replacement for your investments. Design, costs and how long you keep it decide whether it works.
Talk it through with us
Want to hear how other accredited investors in our community use a policy alongside their investments? Join The Wealth Elevator investor community and book your onboarding call with us.
Join the club and book your onboarding callJoining is free.
What happens when you join
- Fill out a short form at theWealthElevator.com/club. It’s free.
- Book your onboarding call. We talk about your goals and how the community works.
- Keep learning with our events, the podcast and member education, including the members-only Banking Vault.
The podcast behind this course
The Wealth Elevator Podcast
Conversations for accredited investors on alternative investments, tax strategy and infinite banking, the three legs of how I build wealth.
This is educational content, not investment, tax, legal or insurance advice. We are not attorneys, CPAs, financial planners or licensed insurance agents. Policy features, dividends and costs vary by insurer and design, and dividends are not guaranteed. Tax law changes and results depend on your situation; consult your own CPA, attorney and a licensed insurance professional. Private investments are illiquid and carry risk, including loss of capital. Offerings are available only to accredited investors and only through offering documents. Please let us know if you need a referral to a 💼 CPA, ⚖️ lawyer or other vendor here.