To the question on whether or not the Infinite Banking Concept is a scam, the answer is no. Infinite Banking is just a creative way to use whole life insurance. People have been doing things similar to the Infinite Banking Concept for a long time. They just didn’t know what to call it. The Infinite Banking Concept is a trademarked name created by Nelson Nash (the founder of the Infinite Banking Concept).
Nash travels and teaches insurance agents about the Infinite Banking Concept so that they can generate more sales. This is how Nash makes his money. Those insurance agents are then able to teach their clients about this new and exciting way to use whole life insurance. This opens up a new sales avenue for these agents to convince potential clients who would otherwise have no interest in buying a whole life insurance policy. Since whole life offers large commissions, that are much larger than term life, this is a great tool to increase revenue for the agents.
The Infinite Banking Concept is not something you can buy. It just shows you a new way to use something already familiar and should work with any dividend-paying whole life plan. You can use these concepts without signing up for any special plan or paying Nash any money. Those agents who have been trained by Nash are supposed to have a better understanding of the ways to use this strategy. That being said if you are going to open a whole life plan with those hefty commissions for the purpose of utilizing the Infinite Banking Concepts, then you might as well use an agent who can give you some advice and tips and make sure you do it properly. Using the Infinite Banking Concept in your whole life insurance policy though doesn’t change the policy. As long as you believe that whole life insurance isn’t a scam, then the Infinite Banking Concept shouldn’t be considered a scam either.
I will add that the projected returns your plan experiences could very well be different then what is portrayed in Nash’s book. I believe them to be fairly accurate examples, or were at the time the book was written, but they are in no way guaranteed. It is also possible to use these concepts in a variable life account where base returns are tied to the market. Nash doesn’t recommend that people do this, but these are open concepts and they can be used in any way one sees fit.