Infinite Banking

At Hudson Agency we help you understand Infinite Banking — a way to use a properly designed whole life insurance policy as a source of financing you control.

What Is Infinite Banking?

Infinite Banking is a strategy built on dividend-paying whole life insurance, usually from a mutual insurance company. Part of each premium builds the policy's cash value, which grows on a guaranteed basis and may also earn dividends. Dividends are not guaranteed.

Once cash value has built up, you can borrow against it for things like a car, a business expense, or an emergency — instead of going to a bank. You set the repayment schedule, and the money you repay goes back into your own policy.

How It Works — and What to Know

• Policy design matters. These policies are usually built with paid-up additions so cash value grows faster, while staying within IRS limits so the policy does not become a Modified Endowment Contract (MEC).
• Policy loans charge interest. Unpaid loans and interest reduce the cash value and the death benefit, and a policy can lapse if loans grow too large.
• It is a long-term strategy. Cash value builds slowly in the early years, so Infinite Banking works best for people who can commit to premiums for many years.
• Your family stays protected. The policy provides a death benefit for your loved ones the whole time.

Want to see whether Infinite Banking fits your situation? Book a call with Hudson Agency and we will walk through how a policy could be designed for you.

Guarantees are based on the claims-paying ability of the issuing insurance company. Policy loans and withdrawals reduce cash value and death benefit and may have tax consequences. Hudson Agency does not provide tax or legal advice; please consult your tax professional.