Infinite Banking in Canada: How It Works and Why the Wealthy Use It

If you’ve ever wondered what infinite banking is and how Canadians are using it to grow wealth, protect assets, and retire tax-free, this post breaks it all down. We’re not just explaining the concept—we’re walking you through how it actually works with math, real-life examples, and a roadmap anyone can follow. 

What Is Infinite Banking? 

At its core, infinite banking is a way to use the same dollar over and over again. You can save for retirement, invest in real estate, start a business, and leave a legacy—all with the same capital. It’s not magic. It’s just math. And it all starts with one financial tool: a specially designed high cash value whole life insurance policy. 

This is not your average life insurance. Fewer than 0.25% of policies in Canada are structured this way. That’s why working with a specialist matters. 

How It Works 

Step one is where most people go wrong: where you save. Before investing, you need to park your money somewhere tax-efficient, liquid, and safe. For us, that place is high cash value life insurance. 

These policies come with two parts: cash value and a death benefit. Both grow tax-free for life. And the magic happens when you can use that cash value as collateral for guaranteed loans—up to 90% of your cash value—without credit checks or approvals. The best part? Your money keeps compounding as if you never touched it. This is what the wealthy do, get on the compound growth curve – and stay on it!  Remember, what destroys wealth for most people is the compound growth is INTERUPTED, by taxes, fees, volatility and spending.  This strategy will eliminate these wealth destroyers. This is what the wealthy do. 

So instead of cashing out to buy real estate or fund a business, you borrow against your policy, keep your money growing, and put someone else’s money to work. 

The Product: Participating Whole Life Insurance 

Not all whole life policies qualify. It has to be a participating whole life policy—and it has to be designed specifically for high cash value. We push down the death benefit and maximize the cash value, allowing dividends (paid annually by the insurer) to purchase more paid-up additions, growing your policy even faster. 

These policies have been paying out for over 100 years. The youngest insurer we work with has a 100-year track record. 

The Power of Control 

With infinite banking, you’re in the driver’s seat. You decide when to access your capital. No banks, no loan officers. Whether it’s an opportunity or an emergency, you’re covered. 

And if you use the loan for investments, the interest is often tax-deductible. More control. More efficiency. More upside. 

Why the Wealthy Use It 

The wealthy don’t just save—they multiply. Infinite banking allows them to: 

• Keep money growing tax-free (uninterrupted compounding) 

• Use capital for real estate, business, or market dips 

• Maintain control and liquidity 

• Access tax-free income in retirement 

• Leave a tax-free legacy 

Volatility, taxes, and fees don’t erode this strategy the way they do with typical investments. 

Retirement & Legacy Planning 

Think of your financial life as a mountain. Climbing up is the accumulation phase. Coming down is retirement and decumulation. Most people hit the downhill without protection. 

With infinite banking, you can pull out tax-free retirement income using policy loans. No mandatory payments. No taxes. And when you pass, the death benefit pays off any outstanding loans and leaves the rest to your family—tax-free. That solves a lot of problems: estate taxes, family disputes, the fate of the family cottage. 

Real-Life Example: 25-Year-Old Business Owner 

Let’s say a 25-year-old puts $25K a year into a policy for 40 years. That’s $1 million total. 

At 30, he borrows $80K for a duplex. At 35, $200K to start a business. At 40, $400K to invest in real estate and stocks. At 42, a tough year hits. He stops contributions and borrows $200K to keep the business alive. By 55, he has $1.7 million in cash value and takes out $1 million to 10x his business. 

By 70, he’s sitting on $4.3 million in cash value and $7.5 million in death benefit. He starts taking $200K–$300K a year in tax-free retirement income. At 90, he passes away. The policy pays out $12.4 million—more than enough to pay off loans, handle taxes, and leave millions behind. 

And the great part is, because we minimize the death benefit and maximize cash value – this can work at almost every age.  A 50 year old will have similar cash values to a 30 year old! 

Why You Need a Specialist 

Infinite banking isn’t something you dabble in. It’s not a “set it and forget it” product. You need someone who understands the mechanics, knows how to structure it correctly, and can support you for decades. 

If you’re a business owner, this is even more critical. Structured right, corporate-owned policies can pay out tax-free through the Capital Dividend Account. Done wrong, it can cost you millions. 

What Now? 

If this strategy sounds like it might be a fit for you, the next step is education. We’ve got webinars, books (Be the Bank, Infinite Banking for Real Estate Investors), and a team of wealth coaches ready to walk you through it. 

Knowledge without action is useless. Want to stay in control of your money, grow your wealth, and protect your legacy? Then it’s time to take action. 

Visit https://www.controlandcompound.com/keyspiremembers to learn more and book your free consultation.