In this interview‑style video, host Jason and insurance expert Richard Canfield discuss why entrepreneurs should stop fixating on the nominal interest rate of whole‑life policy loans and instead focus on control, cash‑flow, and the long‑term benefits of the Infinite Banking Concept (IBC). They explain that policy loan rates vary by carrier (typically 5‑9%, sometimes linked to prime or adjusted annually) and that the rate is only a secondary consideration after evaluating a carrier’s dividend history, participating account performance, loan‑process transparency, and overall financial strength. The conversation stresses the importance of having a repayment plan before taking a loan, the discipline required, and the advantage of directing interest back to policyholders rather than bank shareholders. Real‑world examples illustrate rate adjustments during the COVID‑era and the impact of carrier‑specific policies. They also expand the discussion to a multi‑generational mindset, urging listeners to think beyond their own lifespan and consider how whole‑life policies can serve children and grandchildren for a century. Throughout, they use analogies (fertilizer vs orchard, financial proctology) to highlight the difference between conventional bank borrowing and borrowing from a mutually owned insurance company, concluding with a call for audience engagement on money topics.
Chapters
It's sort of like staring at the cost of fertilizer while you're completely ignoring the growth of the orchard. People get hung up on rate. It's not a function of rates.
Learn how to think beyond your own lifespan. A lot of people don't even think beyond the weekend. Who do you want to be in a 100-year relationship with? What interest rate is charged on policy loans?
Oh, that's a really good question. I think probably one of the biggest things to clarify out of the gate is that every life insurance carrier— so if your policies are with an ideally reputable mutual life insurance company, or even if they're with a stock company, the simple interest rate that accrues on policy loans varies. It varies by carrier. And so the question to ask What interest rate is charged on policy loans? That is best in sequence when you determine what carrier you're planning to apply and have the policies put in place with. Generally speaking, I mean, it can range as low as 5%, uh, can range as high as 9%. It, again, it depends on the carrier. And I think the distinction that Rich and I always like to talk about is, um, I guess it dependent upon how you plan to utilize your policy or your system of policies. The point being, you should never request a policy loan that you do not have a plan in place prior to requesting it in terms of repayment. And repayment obviously on your schedule because the capital is available from the life insurance company on demand, on your terms. And sometimes having an unstructured loan could be a bad thing if the human condition, if the discipline isn't there. But the comparison is not the policy loan simple interest rate. The comparison is, would I rather finance that thing, whatever it is, through a conventional bank and permanently transfer the principal and the interest away? Because when you make a payment, it's principal and interest. Who does the lender put the interest to work for? The stockholders of the bank, not the depositors who leave the money there, not the borrowers who repay the loans. Or do you want that principal and interest flowing back to an entity that you co-own, where the interest portion is deployed and put to work for the benefit of the participating policyholders. So it's not like Nelson says so brilliantly in his book, a fatal error in thinking is believing that the infinite banking concept is a function of interest rates. It's all a matter of where the money is flowing to and who it's being put to work for and for how long.
Yeah, and I, I will expand on this a little bit in the example of, okay, if what's the interest rate charged on policy loans? The best time to ask that question would be after you're already, first of all, determined that this is something you want to do. You've gone through the clarity and the experience of education, you've met with a coach, and now you want to maybe validate or confirm a couple things about the specific insurance carrier that you might be working with. That's when that might be a relevant question, I think is the key thing to identify. Because there's many reasons as to why you might choose one carrier or other. Choosing a carrier over their interest rate would be one of the last reasons on the list of all the different reasons to choose. Well, what is their participating account like? What is their dividend history like? What— how do they manage things? What is their loans process? What is the procedure? How, how visible is that information? How easy is it for me to deal with the company? Like, there's a whole laundry list of other questions. Somewhere near the bottom is what is their current interest rate on loans and/or what is the way that they determine or, you know, maybe look at adjusting their interest rate. These rates will adjust from time to time with carriers. So as an example, I have a carrier that I work with where my very first policy is what I call in the air quotes on the old system, you know, before they started making a lot of product changes. And that one is adjustable more with a prime rate. So as prime rate adjusts, the interest rate on that particular one adjusts as well. And so right now, today, I think I can, I can get out a policy loan today, Jay, at the time we're recording this, May of 2026. I think I can get one somewhere in the area of like 5.5%, maybe 5.85%, something like that.
Oh yeah, I have several in the same range.
In the same range. And then, and then there's a couple of other carriers that I also have some policies with. And one particular carrier, I can get access to a policy loan. That one, I think right now it's 6.95%, right? But the rate has already come down. And so when my anniversary shows up, it'll reflect an updated rate. So from a policy loan, typically, typically the rate adjustment, if it happens, they'll make an announcement at some point in time in the year. Every life company does their annual reports at different times.. And when that announcement is made, when your policy anniversary comes around the clock, if an adjustment happens, the adjustment would happen typically at the anniversary date of your policy. And so if you have multiple policies at different timeframes, it's not really not worth paying a lot of attention to because you just go about your life and your business and your loan structure. All right. During the recent COVID interest rate spike that we saw, some carriers who maybe have a more variable type rate Yeah, their interest rates spiked up. There was one carrier in Canada, I think they reached maybe somewhere as high as about 9.5, 9.7%. And I have a policy with that carrier. And, and depending on when that rate announcement happened, you maybe had a year of that and then it went down and it went down again, etc. We have another carrier where they choose and they make their decision about adjusting their loan rate based on different criteria. It's not tied to a prime rate. It's based on a, a long-term trend and trajectory of how they're bringing money in, what, what they expect on their par account rate of return and their different assumptions on how the, how the par account's working. And so they keep a closer parity to their dividend scale in this. And so like their rationale for their loan rate is just very different. And it's been extremely consistent for the last 15 years, roughly speaking, would you say? Okay, entrepreneurs, this content is built for you. Comment below. Tell us what money topic you want to hear more about. Your insights and questions inspire us to create the content that coaches you to build lasting control and growth on your terms.
Yeah, well, when I first got going back in 2008, you know, obviously rates were much different then, but Yeah, we were accessing policy loans at 4% or less. And, uh, the point being is that it's, it, it's, it's sort of like staring at the cost of fertilizer while you're completely ignoring the growth of the orchard. Like, it's, it's just such, um, such an important, important frame of reference that if you can borrow money from a conventional bank— think of any conventional bank in the United States where we do business sea to shining sea, or Canada where we do business coast to coast— pick any large conventional bank, and if the rate is— if you can access capital at 4%, and you can access capital directly from the life insurance company that you co-own at 6.5%. Yes, a, a child in grade 3 would go, 4% is the lower number. Of course it is. What comes into a person's train of thought when they're implementing the Infinite Banking Concept is being in a position of total and absolute control. When you borrow from a conventional bank, it's not an unstructured loan. Unstructured loans from a conventional bank don't exist. Credit reports, application, qualification, income verification. The list goes on and on and on.
Now, financial proctology— think of it as a financial proctology exam. You get to leave with all the pain and you get to walk, waddle out of the banker's office, whereas that doesn't happen when you're doing business with the insurance company.
For some people, they're okay with that. We're not suggesting that any of those underwriting steps are good, bad, or otherwise. That is just the cost, the steps of doing business.
There are costs of doing business and it's a cost of time and effort.
Well, and it's just an absence of peace of mind in the sense that if you were to do the math, God rest his soul, when R. Nelson Nash, the developer, the pioneer of the infinite banking concept, when he would help us to think about our thinking, not his thinking, our thinking. And Nelson would say, let me ask you a question. If you borrow money from a conventional bank at a lower rate than the life insurance company, when you send repayment back to the conventional bank, may I ask, who does that conventional bank put that money to work for, and for how long? Obvious answer: the stockholders of the bank. Now, may I ask, when you repay a policy loan on your schedule, who does the life insurance company put that money to work for, and for how long? The answer is obvious: the participating policyholders, when you're dealing with a reputable mutual life insurance company. So Nelson would simply say, "Well, I rest my case," because he wants you to think about your thinking as it relates to that. People get hung up on rate. It's not a function of rates. Those go up, those go down. It's a function of control. Where's that money flowing to? Who is it being put to work for and for how long?
And a good question. So a piggyback question that ties onto this, Jason, that one of the things that I think is one of the best ones you've ever kind of came up with, and I love this, is who do you want to be in a 100-year relationship with?
Right.
And where that makes a lot of sense, you're a parent, you're a grandparent, and you have policies on yourself. You've got them on your children, on your grandchildren, and you're in that position. Jay, not the grandchildren yet, but everybody's got policies. I've got policies on my kids. And so my son is 10 years old at the time of this. In 90 years he's 100. I'm likely not going to be here, although longevity is going a long way. We'll see. It's possible. If that is the case, well, anytime I'm doing business with a company, I'm doing business with a company that my son co-owns, my daughter co-owns as well. And so I want them to be profitable for a long, long time. So the mindset shift is very distinct. If you start to think about things the way Nelson talked about with his main rules, you got to think long range, learn how to think beyond your own lifespan. A lot of people don't even think beyond the weekend. They barely even think about the weekend. So it's very true. If you can start to adjust your thinking process around multiple generations, the generation beyond you, when you're no longer here, the way you think and act and start to do things tends to shift a little bit as well. That's part of why long-term thinking is core, is a core aspect. It's a critical element. To the behavior necessary to incorporate this process. And so, the tool that does the best job at that is one that's designed for whole lifespans, you know, actuarially speaking.
Yeah, very true.
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