Cash flow banking for doctors

Cash Flow Banking for Doctors

Doctors are unique in that their profession has two inherent costs: medical school and malpractice insurance. Doctors often rely on banks for the following:

  • Paying for continuing education
  • Buying a medical practice
  • Purchasing medical equipment
  • Personal expenses like home and auto loans

To help cover these costs, doctors may end up paying banks and other creditors hundreds of thousands of dollars more in interest than the average worker. Cash flow banking for doctors offers an alternative way to manage both your personal and unique professional expenses.

Becoming Your Own Bank

Banks use permanent life insurance in the form of Tier 1 Assets to meet liquidity requirements mandated by the Feds. They hold billions of dollars in whole life policies. And banks aren’t the only major companies who rely on life insurance for cash flow. Large corporations like General Electric and Wal-Mart also have large holdings of whole life insurance. 

Why do companies care so much about life insurance? 

Related: Grow a Healthy Medical Practice with Life Insurance

4 Benefits of Cash Flow Banking


When structured correctly (and we must emphasize correctly), the whole life insurance policyholder can access all of the premiums that have been paid into the policy as cash value

Cash flow banking for doctors: As a doctor, you can use the liquidity and guaranteed policy loan provision of your permanent life insurance to pay for your medical practice. You can also use it to pay for continuing education courses and important medical conferences. Or use it to add new equipment to your office to stay on the cutting edge of medical technology.


Trusting your money to the market can be a gamble, as we’ve seen in recessions past. Whole life insurance helps avoid market risk. It can offer safety similar to what you find in a money market account but with improved returns. 

Cash flow banking for doctors: The insurance industry is regulated more conservatively than the banking industry. The cash value within your policy isn’t directly invested in the stock market, and cash value in permanent life insurance may often be protected from judgements resulting from malpractice lawsuits.

Rate of Return

One of the greatest benefits of permanent life insurance is that you earn a guaranteed rate of return on the cash value you accumulate. Your life insurance company may also pay out a yearly dividend. Unlike other investment accounts, cash value in permanent life insurance continues to earn a rate of return—even if you have taken out a policy loan against it. 

Cash flow banking for doctors: Doctors are always in need of capital. With that capital comes two distinct costs:

  1. The capital is borrowed from a bank that charges you interest.
  2. The capital is spent in cash, which eliminates the money’s additional earning potential (it could be earning interest somewhere else)

Whole life insurance allows you to capitalize on your opportunity cost, earning interest while borrowing from your policy.

Tax Benefits of Cash Flow Banking

Whole life insurance offers six main tax benefits:

  • Earns interest and dividends tax-free
  • Estate tax-free death benefit
  • Tax-free policy loans
  • Tax-free retirement income
  • Growth of cash value can be used tax-free
  • Income tax-free death benefit

Cash flow banking for doctors: As a doctor, your income may put you in a higher tax bracket, which means tax benefits are even more important to you. You need a specialized wealth strategy that protects your wealth from the government for you and your family.

The Best Whole Life Insurance for Doctors

At Paradigm Life, we work with medical professionals to help them obtain financial freedom with cash flow banking. Permanent life insurance enables you to use your money now while still earning a rate of return. Unlike a 401(k), IRA, or other mutual fund investment, it isn’t susceptible to the downside of market fluctuations.

For a free consultation to discuss your situation, request an appointment with one of our Wealth Strategists. We offer complimentary financial education on cash flow banking for doctors. Let us build a quote based on your financial goals. We shop among top-rated insurance companies to find the best possible option for you.

Stop paying interest to banks and creditors. Learn how to self-finance your medical practice (and personal expenses) while still earning a rate of return, using the same cash flow banking strategy major financial institutions employ. Schedule your complimentary consultation now.