Is IBC a Scam? A CPA’s Perspective on the Infinite Banking Concept

My name is Anthony Faso, and I’ve been a CPA for almost 20 years.  I would get at least one phone call or email from some financial planner trying to get referrals from me.  When I was approached about the Infinite Banking Concept, I was intrigued.  This was a very different approach to saving for retirement. As I CPA I would always recommend my clients “max-out” their IRA’s and 401k’s.  It made me “look good".  You owe $50,000 in taxes, if you put $20,000 into your IRA, you can “save” $5,000 in taxes. Is that not how people judge their CPA’s?  How much did they save you in taxes that year? As a CPA, I would see how that so called savings in their 40’s, turned into a large tax bill in their 70’s.

What is the Infinite Banking Concept (IBC)?

In the simplest terms, it is funding a high cash value focused whole life insurance policy.  You can borrow against the equity of the policy (cash value) to finance your purchases, for example, cars, vacations, real estate and investments.  Then you pay the policy back, principle plus interest (just as you would if you borrowed money from the bank).  Then you can draw down the cash value to use as tax free retirement income. Others have used different names to market IBC, such as, Bank On Yourself, Cashflow Banking, 770 Account. You can learn more at

I first read Becoming Your Own Banker by R. Nelson Nash in 2009. My first impression of the Infinite Banking Concept (IBC) was that it sounded too good to be true, so I decided to do my own research. My CPA firm worked with many “typical” financial planners, so I asked each of them to explain to me why they thought IBC wouldn’t work. They gave me a few reasons:

  • The only reason anybody would recommend a whole life insurance policy is to earn a high commission.
  • There is no cash value until about year seven or eight.
  • The rates of return are terrible.

Not an “Either/Or” it is an “AND”

My friend also explained to me that the Infinite Banking Concept is not an “either/or” strategy; it’s an “and” strategy. In other words, it’s not about putting your money into real estate, your business, the stock market OR an IBC policy. With IBC, you can put your money into life insurance AND leverage it to invest in everything else. You can see my video on how borrowing againt your policy works at How a Policy Loan Works.

That did give me some comfort, but I still needed to do more research to determine if IBC is a scam. While looking up case studies, I found three examples in history of the Infinite Banking Concept.

Infinite Banking Concept: Case Studies

Case Study #1: Did you know Walt Disney couldn’t get a loan to build Disneyland? Instead, he had to use the cash value of his life insurance policy to finance his theme park. And as anyone who’s ever been to Disneyland knows, it was a worthwhile investment!

Case Study #2: Did you know that the owner of Pampered Chef started her company with a policy loan of $3,000? This also turned out to be a great investment, as she later sold the company to Warren Buffett for $900 million

Case Study #3: Did you know that former Vice President Joe Biden uses the Infinite Banking Concept? According to his financial report, he takes out loans against his life insurance policies to finance his purchases. You can see his financial report here.

I realized that if many successful people, including the former Vice President of the United States, have used the Infinite Banking Concept, then maybe it’s not a scam after all.

Of course, I’m a skeptic at heart, as most CPAs are. So I decided that if I really wanted to figure out once and for all whether or not the Infinite Banking Concept is a scam, I needed to get a small IBC policy and try it out myself.

My Infinite Banking Concept Experiment

First, I used the cash value of my IBC policy to pay off a debt. Then each month, instead of making a payment to the bank, I put that money toward my IBC policy. And you know what? It worked exactly as Nelson had said it would.  Then I had my wife read Becoming Your Own Banker. And you know what she said?

“Why is our policy so small?

So we got a another IBC policy, plus a policy on each of our kids (this was especially helpful because both of them have had health issues after the policy was issued.  They currently cannot get ANY life insurance, because of those issues). We were able to pay for their education with their IBC policies instead of having to rely on a 529 plan.

We have used our IBC policies to start a business, to buy real estate, to pay off debt, to cover medical expenses, and to fund vacations. We’ve even loaned money to others (with interest, of course).

The Verdict: Is IBC a Scam?

In my honest opinion, no, IBC is not a scam. Whole life insurance has been around for 200 years and has proven to be a safe place to store cash. In the United State, there has NEVER been a valid death claim that was not paid.I cannot name another account that can say the same. The Infinite Banking Concept is simply a strategy to borrow against the cash value of that policy.

Now this may come as a surprise, but one thing you need to watch out for is unethical advisers and agents. I know, shocker, right? It’s true. Some agents will talk about the benefits of IBC, then pull a bait-and-switch. So the policy you actually get is more of a typical life insurance policy, which won’t have any immediate cash value for you but will earn a hefty commission for that agent.

To counter this unethical practice, Nelson Nash started an IBC certification program. Every agent must pass a test on the Infinite Banking Concept and follow a code of ethics to design policies just as they’re described in the book Becoming Your Own Banker.

You can see if your agent is an authorized IBC practitioner at

Is the Infinite Banking Concept Right for You?

If you’re doing your own research into IBC, I recommend you check out our online course at

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After you create a free account, you can watch our three-part video series on the Infinite Banking Concept, which we refer to as the Vault Strategy.

You’ll also find additional videos on advanced ways to use your IBC policy. For example, if you’re wondering whether you should use your policy to buy real estate, we can help you answer that question by showing you the math.

Still on the fence about IBC? Schedule a 15-minute phone call with me! Ask me your IBC questions and I’ll ask you a few questions to see if IBC is the right financial strategy for you. You can schedule our 15-minute call ​HERE

I look forward to hearing from you soon! 

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