up the IRS rules around Modified Endowment Contracts (MEC). Another precondition for infinite banking is a high yield environment. Most whole life insurance policies invest in conservative investments such as corporate and government bonds. Right now, these investments trail inflation which means that policy holders are actually losing cash value relative to INFLATION. The idea of having this "fund" that you can tap at any time sounds appealing, but there are always downsides. Insurance companies aren't offering these policies out of the kindness of their heart. They are offering these policies to make money, and that profit comes from you. A well-structured whole life policy's cash value doesn't even start to break even for 5 to 7 years. Many policies aren't well structured, and you might never break even if it’s not structured properly. Agent commissions on these policies create a real incentive for insurance salespeople to sell whole life policies that aren't always in the customer's best interest, so you must be careful on choosing insurance agents. It's always easier to look at some math and see how this can work. Remember, each policy is different, and you have to look at the underlying math (Farrington, 2020).
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