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Be Your Own Bank [How You Can Get Started Being Your Own Banker Today]

Fact Checked by Jason Herring & Barry Brooksby
Licensed Agents & Life Insurance Experts.
Insurance and Estates, a strategic life insurance provider composed of life insurance professionals, is committed to integrity in our editorial standards and transparency in how we receive compensation from our insurance partners.
How To Be Your Own Bank

“Be Your Own Bank” is another way to refer to Nelson Nash’s Infinite Banking Concept: Becoming Your Own Banker®. To be your own bank means you replace conventional thinking and take back control of your money outside of Wall Street.

In the following article we will discuss how you can be your own bank and the advantages and disadvantages of being your own banker.

How to Be Your Own Bank

The first step to be your own bank is to realize what the phrase means. It does NOT mean you are actually creating a bank. Rather, it signifies a huge paradigm shift in your thinking that puts you in the control seat of your money, rather than Wall St.

The second step is choosing a vehicle from which to become your own banker. You see, when it comes to being your own bank, specific financial vehicles work better than others. You do not have to choose life insurance as your own personal bank, but we have found it to be the most beneficial option for the reasons we list below.

The 5 benefits of strategic self banking with life insurance are:

In our pros and cons of infinite banking, we covered the advantage and disadvantages of using life insurance as your bank. We list five such benefits below, but please follow the links in this article for more information on the topic of being your own banker.

1. Safety

Choosing from among the highest rated life insurance companies provides you with a stable foundation to build from. Many of these carriers are mutual insurance companies, that have been around for over 150 years.

In contrast, many financial institutions are not as stable since they often take on huge amounts of risk, often leveraged out to dangerous levels (remember 2008). Further, many banks are active in the derivatives market, which should be cause for some concern. At the end of June, 2021, It is estimated that the gross market value of OTC derivatives contracts came in at $12.6 trillion. Source.

In contrast to the high risk associated with Wall St, your life insurance is not an investment, but a savings vehicle that acts as your “Safe Bucket”. It provides you with a solid financial foundation to transact your own personal financing from, that is separate from Wall Street and big banks.

2. Liquidity

Your policy should be designed to create early high cash value growth.These “banking” type policies are not focused on death benefit, but on cash accumulation.

You are basically overfunding your policy by stuffing as much money into it as possible, while still maintaining the status of a life insurance policy.

Your money can then be used for other purchases, allowing you to maximize the velocity of your money. This is accomplished by taking a life insurance loan against your cash value as collateral.

The benefit is that the cash value in your policy remains, and continues to earn interest and dividends on the entire cash value balance, even while you have an outstanding policy loan.

3. Privacy

Your cash value and any policy loans does not show up on your credit report. If you have a large outstanding policy loan, it will not interfere with you qualifying for other types of loans, such as a mortgage loan for an investment property.

Also, you do not have to qualify for life insurance loans. You have a contractual right to withdraw or borrow against your policy whenever you choose, for whatever you choose.

4. Tax advantaged

Some of the advantages of life insurance are tax deferred growth, tax free policy loans and a tax free death benefit.

The Internal Revenue Code has several section devoted to life insurance, including section 7702. A section 7702 Plan is simply referring to cash value life insurance, and the many tax benefits it receives under the Code.

5. Leverage

Use your cash value to purchase cash flow assets, such as real estate. This is a great real estate wealth building strategy, where you borrow against your policy from the insurance company’s general account for the down payment, while the remaining 75-80% of the property is financed through a mortgage loan. By doing this you are using other people’s money, the insurance company’s and the bank’s, to fund your purchases.

Potential arbitrage is available as you use your cash value as collateral to purchase higher income producing assets. You continue to earn interest and life insurance dividends in your policy, but your money is also at work in your income producing asset.

Take the money you get from your cash flowing asset and use it to repay the insurance company on your life insurance loan, so that you can repeat the process.

And you don’t have to limit yourself to real estate. This process can be utilized for whatever purchases you need to make, such as buying cars, financing your business pursuits, or even going on vacation.

The idea is that you finance everything you buy*, so you might as well be your own banker and charge yourself interest on your money that you are borrowing from yourself, rather than to a bank.

*You finance everything you buy.

Consider that you either buy on credit, buy with a loan or buy with cash.

When you buy on credit you pay interest to the credit card company. You end up paying more for the item than the actual price since you also pay interest.

Likewise, when you buy with a loan, you are borrowing the money to make the purchase and you have to pay back the loan with interest.

Also, when you buy with cash, you don’t have to pay interest, but you forfeit your opportunity cost of what you could have used that cash for. Now you have to build up your cash balance again and you cannot take advantage of opportunities that might present themselves to you because you have no money.

The concept taught by Nelson Nash is that by acting as your own banker you are borrowing from yourself and paying yourself back.

Essentially, you are recapturing your own money that you used to purchase whatever item you just bought. The money remains in your own money ecosystem, rather than passing through banks.

By executing the infinite banking strategy, it allows for true compound interest growth, as the money remains at work in your policy, even when you borrow against your cash value.

Next Steps

Ok, now we know that we’ve gone over a lot of information here, some of which may seem really complicated, but the truth is, the most complicated mechanization behind all of this is simply grasping the idea that a dividend paying whole life insurance policy can be used for so much more than just a life insurance policy with a death benefit.


You’ve grasped that concept, understand that a whole life insurance policy used as a “self-banking” mechanism isn’t and “investment” per say.  Rather, it’s a change of thought which can fundamentally change the way you use and leverage your money.

You see…

As you realize that a cash value whole life insurance policy can be used this way, making it happen and fully understanding how it works becomes easier because your brain and way of thinking has been set free!


Don’t worry if you don’t fully understand all the specifics right away, that’s what we’re here for.  We here at I&E will explain how these types of policies work, what you’ll need to do to qualify for one and help you find the “best” infinite banking life insurance policy for you!

So, what are you waiting for?  Give us a call today and see what we can do for you.

20 comments… add one
  • Vincent F Malfa October 24, 2019, 8:45 am

    Do you have software for being own banker

    • Insurance&Estates October 29, 2019, 8:15 am

      Hello Vincent, thanks for reading and commenting. Yes we like Truth Concepts software for IBC design and financial comparisons, etc. You can google search them directly.


      Steve Gibbs for I&E

  • carla domino May 23, 2021, 7:27 am

    Do you have your lecture on video ,I’m hearing impaired and will need close capture.

    • Insurance&Estates May 25, 2021, 12:50 pm

      Hello Carla and thank you for inquiring. At this point I do not have a close caption version of the lecture and apologize for this. I will work on getting this one updated for you. In the meantime, if you haven’t already I invite you to check out our blog page and search “be your own bank” at the top of the page to get an article on this topic also.

      Best, Steve Gibbs for I&E

  • Nik Catalina December 2, 2021, 4:48 pm

    How does this work for people at or above a certain age? Are there companies that will issue whole life policies to aged individuals … or is there a cut-off age ? I imagine the premiums would be high ? Please adivise Thanks

    • Insurance&Estates December 7, 2021, 10:35 am

      Hello Nik, this can work at older ages depending upon health and other factors. Your best first step is to connect with Barry Brooksby by emailing him to request a call at barry@insuranceandestates.com.

      Best, Steve

  • Lawrence February 9, 2022, 2:44 pm

    Hi, I want to get my daughter started with this. She is 19 years old and my other son is 14, will they be to qualify? thanks

    • Insurance&Estates February 10, 2022, 2:08 pm

      Hello Lawrence, a great first step is to request a call from Barry Brooksby by emailing him at barry@insuranceandestates.com.

      Best, Steve

  • Eugene May 3, 2022, 12:13 pm

    How to incorporate this into a family trust thing,or it’s just a one man thing?

    • Insurance&Estates May 11, 2022, 9:51 am

      Hello, this strategy can be utilized with and compliments a family trust in a number of ways. For starters, the life insurance death benefit could be directed to the trust for dynasty planning purposes and death benefit proceeds are far more flexible and offer tax advantages vs. other kinds of accounts. A great next step would be to schedule a discussion by connecting with Barry Brooksby at barry@insuranceandestates.com.

      Best, Steve Gibbs for I&E

  • Osagie Agboh November 28, 2022, 4:01 pm

    I will like to explore the option of BYOB through whole like Ins.

    I think it is a great idea!

    • SJG December 1, 2022, 2:18 pm

      Hi Osagie, thanks for connecting! It looks like one of our IBC experts connected with you.

      To your success!

      I&E Pro Team

  • Mariyah Rojas January 25, 2023, 6:52 pm

    I’m 22 years old and I want to become my own bank. I feel as thought a step by step guide would be more helpful than the step by step process provide. Although There was just a update I hope 2023 update would have better detailed information. So that more motivated young people like myself, can have the online resources that we need to achieve our goals.

    • SJG January 26, 2023, 7:57 am

      Hello and thanks for your comment and insight. We’ve done some education on the 7702 updates so that would be the biggest take away for 2022-2023. Also, we are always seeking to bring things current in terms of our high cash value pages and articles.

      Best, Steve Gibbs for I&E

      Steven Gibbs is a licensed insurance agent, and the following agent
      license numbers of Steven Gibbs are provided as required by state law:

      Resident License; AZ agent #17508301,
      Non-resident Licenses: TX agent #2273189, CA agent #0K10610,
      LA agent #769583, MA agent #2049963, MN agent #40563357,
      UT agent #655544.

  • Jared February 3, 2023, 7:57 am

    I feel like there’s a catch.. surely I don’t just buy a policy and have access to all that money to do with as I please.. right?

    • SJG February 3, 2023, 10:16 am

      Hey Jared, there isn’t really a catch except that a best practice for any cash value policy is arguably to “let it bake”. Loans are typically available early on at about 90% of cash value in most cases. However, policy loans do have interest rates to consider, notwithstanding these rates (5-7% currently) are somewhat nominal when compared to other bank rates. Point being, this is an asset with easy leverage capability. There isn’t anything mysterious about cash value life insurance (see IRS Code 7702); however, “do as I please with it” isn’t accurate either. Become a student of this asset. We get call from folks in other countries asking for it and it isn’t available there.

      Best, Steve Gibbs for I&E

      Steven Gibbs is a licensed insurance agent, and the following agent
      license numbers of Steven Gibbs are provided as required by state law:

      Resident License; AZ agent #17508301,
      Non-resident Licenses: TX agent #2273189, CA agent #0K10610,
      LA agent #769583, MA agent #2049963, MN agent #40563357,
      UT agent #655544.

  • lawrence jeffords March 3, 2023, 10:21 am

    interested in be your own banker policy

    • SJG March 11, 2023, 3:13 pm

      Hello Lawrence and thanks for inquiring. A great next step is to email Denise Boisvert at denise@insuranceandestates.com to request a call.

      Best, Steve Gibbs for I&E

      Steven Gibbs is a licensed insurance agent, and the following agent
      license numbers of Steven Gibbs are provided as required by state law:

      Resident License; AZ agent #17508301,
      Non-resident Licenses: TX agent #2273189, CA agent #0K10610,
      LA agent #769583, MA agent #2049963, MN agent #40563357,
      UT agent #655544.

  • Matthew Curotto l April 17, 2023, 8:28 am

    I have so many questions. Who can I talk to, to get answers and understanding?

    • Steven Gibbs April 18, 2023, 8:54 am

      Hello Matthew, thanks for connecting. We have numerous webinars and videos on our website and 100’s of articles on our blog covering virtually every aspect of this strategy.

      When you’re ready, you can also reach out to Denise Boisvert to schedule a call by emailing her at denise@insuranceandestates.com.

      Best, Steve Gibbs for I&E

      Steven Gibbs is a licensed insurance agent, and the following agent
      license numbers of Steven Gibbs are provided as required by state law:

      Resident License; AZ agent #17508301,
      Non-resident Licenses: TX agent #2273189, CA agent #0K10610,
      LA agent #769583, MA agent #2049963, MN agent #40563357,
      UT agent #655544.

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