Called many different names including the perpetual wealth code, cashflow banking, and the money multiplier, infinite banking involves borrowing against yourself using a participating whole life insurance policy.
To go more in-depth, whole life insurance has a cash surrender value AKA a cash value. This value is the amount of money that the insurance company makes available to you if you choose to cancel the policy.
Even though it doesn’t sound like a big deal, these dividends add up over time. Combine this with the guaranteed interest rate and you’ve got a wealth-building vehicle. The fact that your cash value grows continually over time gives it a compounding effect.