Pros and Cons of “Bank on Yourself”


The Process of becoming financially independent is indeed tough but not impossible. With the strategies such as Bank on Yourself, One can plan in advance. Infinite banking is the process of becoming your own bank by owning insurance policies that pay dividends. This sounds easy on paper but it is not that easy. Bank on Yourself has its own pros and cons. Let’s find out some of them

Pros of “Bank on Yourself”

●       Tax-free loans

Although you can withdraw cash from your policy, you need to understand that life insurance policy loans are not taxable. A life insurance policy gives you around 5-6 percent income (including dividends) that may be compounded year after year and used tax-free through loans.

●       A true storehouse

When you implement an endless banking method, you are storing your funds in a tax-advantaged account for future usage. The cash in your safe or your insurance is rising as a result of compound interest. Using vehicles known as life insurance supplement riders or paid-up additions, you can add to your policy forever in addition to your usual payment.

Cons of “Bank on Yourself”

●       Requires Discipline

Bank on Yourself is one of the practices that requires strict dedication and discipline. Long-term growth is supported by borrowing against your policy and paying it back. which is the most powerful part of limitless banking. When you decide to don’t pay back the loan, you slow down your growth and eventually miss out on the opportunity to reach financial freedom early.

●       No Diversification

One of the biggest drawbacks of infinite banking concept is that you cannot diversify. As every other stock market expert says diversify your portfolio for bigger gains. Here you cannot diversify. Although you might get the option to diversify later when your dividends are high but that will slow your compounding.


Infinite banking concept is not new, it has been there for a long time. However, completely understanding it is also not that easy. That’s why it is better to take the legal help of an expert before diving deep into it. To make things easy for you, visit to know more about Bank on Yourself.


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