Can I Use An IUL For Infinite Banking?

Shawn Plummer

CEO, The Annuity Expert

Can I Use An IUL For Infinite Banking?

Yes, an Indexed Universal Life (IUL) insurance policy can be used for infinite banking. This strategy involves using the cash value of an IUL policy as a personal banking system. Here’s how it works and some examples:

Related Reading: Do You Pay Taxes on IUL Withdrawals?

How IUL Works for Infinite Banking

  1. Policy Accumulation: You pay premiums into the IUL policy. Part of these premiums fund the death benefit, while the rest is allocated to a cash value account.
  2. Interest Credits: The cash value earns interest based on the performance of a stock index, like the S&P 500, but with caps and floors to limit risk.
  3. Borrowing Against cash value: You can borrow against the cash value of your IUL policy. This loan doesn’t require credit checks and has flexible repayment terms.
  4. Tax Benefits: The growth of the cash value is tax-deferred, and loans taken against the cash value are usually tax-free.

Related Posts: Does the Cost of Insurance Increase in an Indexed Universal Life (IUL) Policy?

Examples of Using IUL for Infinite Banking

  • Debt Consolidation: You can take a loan from your IUL to pay off high-interest debts like credit card balances.
  • Investment Opportunities: If an investment opportunity arises, you can quickly access funds by borrowing against your IUL, rather than liquidating other assets.
  • Emergency Funds: Use the cash value as an emergency fund for unexpected expenses.

Related Reading: Using IUL as a retirement plan

IUL for Infinite Banking

FeatureBenefit in Infinite Banking
Tax-Deferred GrowthMaximizes cash value accumulation
Flexible PremiumsAdjust contributions based on financial situation
Loan AccessAccess funds without disrupting policy growth
Death BenefitProvides financial security to beneficiaries


Using an IUL for infinite banking offers a flexible and tax-efficient way to manage your finances, providing both a death benefit and a living benefit. It’s a strategy that requires careful planning and understanding of the policy’s features. Contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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