How to Use Life Insurance for Real Estate Investing

Why Real Estate Investors Use Life Insurance for Wealth-Building

Most real estate investors rely on traditional financing, bank loans, or hard money lenders. But what if you could fund deals using life insurance—without credit checks, high-interest rates, or outside lenders?

📌 This guide explains:
✔ How Whole Life & IUL policies provide tax-free real estate funding
✔ The tax advantages of using life insurance in real estate
✔ How Infinite Banking creates a self-sustaining wealth cycle

📌 1️⃣ Why Real Estate Investors Use Life Insurance for Funding

✔ Tax-Free Loans for Investment Properties → Instead of bank loans, investors borrow against their policy’s cash value tax-free.

✔ Avoid Credit Checks & Loan Approvals → Policy loans don’t require credit approval, underwriting, or proof of income.

✔ Money Keeps Growing While in Use → With Whole Life or Indexed Universal Life (IUL), cash value continues compounding—even when borrowed.

✔ Create a Tax-Free Legacy for Your Heirs → Investors use life insurance to pass down wealth without estate taxes.

💡 Key Takeaway: A properly structured life insurance policy becomes your personal real estate funding bank.

📌 2️⃣ The Best Life Insurance Policies for Real Estate Investors

✅ Whole Life Insurance → Best for guaranteed cash value growth and predictable borrowing.

✅ Indexed Universal Life (IUL) → Offers higher cash accumulation potential with market-based growth, but with downside protection.

✅ Infinite Banking Concept (IBC) Policies → Specially structured Whole Life policies with Paid-Up Additions (PUA) riders to maximize early cash value.

💡 Important: Policies must be structured correctly to maximize borrowing power, avoid Modified Endowment Contract (MEC) taxation, and maintain long-term liquidity.

📌 3️⃣ How to Use Life Insurance to Fund Real Estate Deals

✔ Step 1: Fund Your Policy for Early Cash Growth

• The more premiums you pay upfront, the faster your cash value grows for real estate deals.

✔ Step 2: Borrow Against Your Cash Value Tax-Free

• Instead of using savings, borrow from your policy without taxes or penalties.

✔ Step 3: Use Rental Income to Pay Back Policy Loans

• Investors use cash flow from rental properties to repay policy loans, creating a self-sustaining investment cycle.

💡 Example: An investor borrows $100K from their policy’s cash value to buy a rental property. The property generates $2K/month in rent, which repays the loan while the policy’s cash value continues compounding.

📌 4️⃣ Common Myths About Using Life Insurance for Real Estate Investing

🚫 Myth #1: “Borrowing from life insurance is risky.”
✅ Truth: Unlike bank loans, you control the repayment schedule. As long as the policy remains active, loans never trigger taxes.

🚫 Myth #2: “IUL policies don’t grow cash value fast enough.”
✅ Truth: A well-structured IUL with aggressive funding can generate 6-9% annual returns, increasing borrowing power.

🚫 Myth #3: “I can just use my bank savings instead.”
✅ Truth: When using bank savings, the money stops growing. With life insurance, your cash value earns compounding interest—even while borrowed.

📌 5️⃣ How to Set Up a Life Insurance Policy for Real Estate Investing

✔ Step 1: Work with a licensed life insurance strategist (Fly Savvy Sol can help!)
✔ Step 2: Structure your policy for high early cash value growth.
✔ Step 3: Use policy loans for tax-free real estate investments.

🔥 Want a free consultation on setting up a real estate-friendly life insurance policy?
🔗 Schedule a Free Strategy Session Here