Banking Secrets: How to Build Wealth Like the Banks Do (The Power of Indexed Universal Life)

Banks Don’t Save Money—They Multiply It. Here’s How You Can Too.

Most people deposit money into banks… but banks don’t store their money in savings accounts.

Instead, they put billions into a tax-advantaged asset that allows them to:
✅ Earn uninterrupted compound interest
✅ Access liquidity at any time, tax-free
✅ Leverage capital without disrupting growth
✅ Protect assets from market losses

One of these financial tools is called Indexed Universal Life Insurance (IUL).

Banks have known for years that IUL isn’t just about life insurance—it’s about structured capital growth, tax-free wealth, and leverage.

Today, I’ll show you exactly how banks use IUL to build wealth—and how you can too.

How Banks Use Life Insurance to Build Wealth

What do Bank of America, Wells Fargo, and JPMorgan Chase all have in common?

They each hold billions in life insurance policies, classified as Bank-Owned Life Insurance (BOLI).

💰 Wells Fargo: $19 billion in BOLI
💰 JPMorgan Chase: $11 billion in BOLI
💰 Bank of America: $22 billion in BOLI

Why? Because they understand three core principles of wealth building:

✔️ Tax-free growth—Cash value in these policies compounds without taxation.
✔️ Uninterrupted interest accumulation—Even when money is borrowed, it continues to grow.
✔️ Liquidity & leverage—Banks borrow against these policies to fund investments, all while their money remains untouched.

In 2008 when the stock market had its 2nd crash in less than decade apart, most investors who had their principle in the market lost 40% of their life savings. While anyone who was leveraging an IUL lost 0%, They actually had the ability to make money while the market was underperforming.

This is exactly how you should be thinking about your wealth. Smart investors do what banks do. They move the right amount of money from one account to another at the right time. And they allow it to sit for the right amount of time (to earn interest) and then they repeat. How do they do this? Banks make interest off our money, and it works for them 24hrs a day, 7 days a week, whether they are awake or asleep. Start structuring your money like a bank is Strategy. Banks are always assessing risks and have systems in place that focus on 2 key KPI's Deposits and Loans. In the following sections we teach the fundamental strategy behind why these KPI's are important for banks and how you can leverage it yourself.

How Indexed Universal Life (IUL) Works

An Indexed Universal Life policy is Unlike any other traditional life insurance—it’s a high-efficiency financial tool designed to:

✅ Capture upside growth without market losses
✅ Maximize tax-free compounding
✅ Provide liquidity without penalties
✅ Enable loan arbitrage (borrowing at a lower rate while earning at a higher rate)

Here’s How It Works:

1️⃣ Cash value inside your IUL is linked to an index (S&P 500, Nasdaq, etc.).

• When the market goes up, your cash value increases (up to a cap).

• When the market goes down, you lose nothing (your floor is 0%).

2️⃣ You can borrow against your cash value TAX-FREE at any time.

• Instead of withdrawing, you take a policy loan, allowing your full balance to keep compounding.

3️⃣ Loan Arbitrage: The “Secret” to Banking Like a Bank.

• When structured correctly, the loan interest rate is lower than the crediting rate.

• This means you can borrow at 4-6% while still earning 6-9%—a net positive spread.

📌 Example:

• Your IUL has $500,000 in cash value.

• You borrow $100,000 at 5% for an investment.

• Your IUL still earns 8% on the full $500,000—even though you’re using some of it.

• This means you’re still gaining 3% net on money you’re actively leveraging.

This is exactly how banks operate—leverage without interrupting growth.

Key Components of a High-Performance IUL (Avoiding Common Mistakes)

Most IULs are not structured properly—and that’s why many people don’t get the results they expect.

1️⃣ Maximum Cash Accumulation Design

• Your IUL must be structured for maximum cash value, not maximum insurance.

• This means minimizing insurance costs and maximizing overfunding (up to IRS limits).

• If your policy isn’t designed this way, you’re wasting money on unnecessary costs.

✅ Goal: 85-90% of your premium should go toward cash value, NOT insurance fees.

2️⃣ Low-Cost, High-Performance Indexing Strategies

• Many carriers offer multiple index options (S&P 500, Nasdaq, multi-index strategies).

• Avoid fixed accounts/ accounts with low returns.

• Look for uncapped or high-cap strategies that provide maximum growth potential.

✅ Goal: Earn 6-9% annualized growth with a 0% downside floor.

3️⃣ Leveraging Policy Loans for Compound Growth

• Always borrow from your IUL, not withdraw.

• Ensure the loan rate is lower than your crediting rate to create positive arbitrage.

• Use policy loans for real estate, business investments, or passive income streams.

📌 Example:
Sarah has $1M in an IUL earning 7% annually.
She borrows $200,000 at 5% for a real estate deal.
Her full $1M still earns 7%, while her real estate generates cash flow.

✅ Goal: Use your IUL as your personal bank—earning interest while leveraging capital.

Action Steps: How to Start Banking Like a Bank

🚀 Step 1: Get a Customized IUL Design – Work with an expert to structure your policy for maximum cash accumulation and leverage.

🚀 Step 2: Fund Your IUL Efficiently – Use high-contribution, low-insurance-cost strategies to optimize cash growth.

🚀 Step 3: Leverage Loans for Investment Growth – Borrow against your cash value for real estate, business expansion, or passive income streams.

🚀 Step 4: Repeat and Scale – Keep your money in perpetual motion, compounding tax-free while leveraging capital for wealth creation.

Final Thoughts: The Choice Is Yours

Most people let banks control their money—while banks multiply their wealth through diverse investing strategies.

Which side do you want to be on?

💰 You can keep saving, investing in traditional accounts, and hoping your 401(k) doesn’t crash…

💰 Or you can start thinking like a bank, structuring your money for tax-free growth, liquidity, and leverage.

Your money should work for you—not for the banks. Book a free strategy session, start today.