Blog 101 – A Bank Loan Or An IBC Policy Loan? 

Pedro Palicio On The Infinite Banking

Some clients have asked us about using the cash value in their policies to collateralize a bank loan. Our position on this is as follows:

If you are using the Infinite Banking Concept (IBC) to wean yourself off bank loans, why in heaven’s name would you take a bank loan when you could take an IBC loan?

With your IBC loan, you have the flexibility of paying it back on your own terms and your own schedule. With the bank loan, the bank sets the terms of your loan.

With your IBC loan, you collateralize the cash value that you have in your outstanding loan balance. As you pay off your loan, you release the collateral on the amount you are paying, and you have more cash value to borrow from. With the bank loan that is collateralized by your cash value, the bank holds as collateral every penny that you have in cash value, and you can’t use your cash value until the loan is paid off and the bank releases the collateral assignment. To be clear, if you have $100,000 in your IBC policy cash value and you take a bank loan for $50,000, the bank collateralizes the full $100,000 and even whatever the growth in your cash value would be for as long as it is collateralizing the bank loan. Oh, and by the way, that collateral also includes your death benefit. Before you decide to collateralize your policy’s cash value for a bank loan, read the collateral assignment or have your attorney read it and explain it to you.

If you would like to learn how you can grow a substantial amount of cash that you have access to at any time without penalties, is unrelated to the stock market, and will generate income that is not included in your tax return, visit our website at or feel free to email us your questions at or call us toll-free at 1-844-443-8422.

Isis B. Palicio, LUTCF, MBA
Pedro A. Palicio, MBA, Ph.D.
Infinite Banking Concepts® Authorized Practitioners

We are experts in designing high cash value dividend-paying whole life policies.

Call Now Button