An intermediary is a third party who provides intermediation services between two parties. A bank is a type of financial intermediary. Banks act as a link between savers and borrowers, facilitating the flow of money in the economy. They receive deposits from savers and then use these funds to make loans to borrowers. Controlling this intermediary function allows banks to profit, reinvest, and grow from charging borrowers a higher interest rate for loans than they pay savers for their deposits. This is known as the banking function.

CONVENTIONAL BANKING SCENARIO:
• You deposit money into a savings account and therefore into the bank’s control, earning a low interest rate (e.g., 4%) from what the bank pays you. Functionally, you’re lending your money to the bank.

• Suppose you borrow the same amount from the bank, paying a higher rate (e.g., 6%) because the bank incurs risk and has to make a profit.

• The bank profits from the 2% spread, and you owe taxes to the government on the 4% interest you earned in your savings account while you were paying off your loan.
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Instead of allowing banks to Control the Banking Function™, a uniquely designed whole life insurance policy with a mutually owned insurance company allows you to control it. Such a policy allows you to profit, reinvest, and grow financially the same way commercial banks do. This is known as Whole Life Banking™, where you become the financial intermediary, the one facilitating the movement of money between two functions traditionally performed by separate individuals in a commercial banking system: the saver and the borrower.

WHOLE LIFE BANKING™ SCENARIO:
• All the premiums you pay into a certain whole life policy function like deposits, building cash value—money you own. Functionally, you’re lending them into an insurance company’s general investment account, earning a low interest rate (e.g., 4%) from what the insurance company pays you.

• Suppose you borrow the same amount from the insurance company, paying a low rate (e.g., 4%) because the insurance company incurs virtually no risk. It uses your cash value as collateral, the growth of which the company itself is guaranteeing (and it continues growing while the loan is outstanding). Functionally, this loan to you is money deposited into your control. You owe your “depositor” 4% interest but you choose to repay at a higher rate (e.g., 6%) as you would have otherwise with a conventional bank loan. The extra 2% boosts your cash value growth tax-free.

• You retain control over the cash flow and capture the interest differential that would otherwise go to a bank. In both scenarios, the same amount of money is being deposited, lent, borrowed, repaid, and reinvested. Financial intermediation is being simulated within your own policy, but you control the function. The insurance company, of which you are a mutual owner, facilitates the loan from its general account while your savings (your cash value) continue to grow. By linking saving and borrowing within your personal system you’ve internalized the banking function, replacing the need for a commercial bank.

(The 4% interest rate used in both scenarios is intentionally conservative. While actual bank savings rates are typically much lower, this equivalency serves to isolate the difference in cash flow mechanics, not market performance, making the comparison fair and functionally illustrative. The cash value grows at a guaranteed 3% rate, with potential dividends increasing total growth to 3%–6%. While dividends aren’t guaranteed, several mutual companies have paid them every year for over 100 years, making them as close to guaranteed as it gets. While the cash value in a whole life insurance policy grows tax-deferred, it can effectively grow tax-free if the policy is properly structured as a Non-Modified Endowment Contract (Non-MEC) and is never surrendered. Whole Life Banking™ policies are Non-MEC and, when accessed through policy loans, cash value is not taxed, and the death benefit is generally income tax-free. Surrendering or lapsing the policy may trigger tax consequences. Always consult a tax professional for personalized advice.)