The term infinite banking is synonymous with Nelson Nash, for he is its founder. His more than 30 years of work experience as a Life Insurance Agent played a pivotal role in his learning. His ideas benefit not only insurance companies, but also policy owners to the fullest extent possible.
The idea here is to make money. Or rather recover your own. When buying life insurance, opting for a Whole Life Insurance Policy (a life insurance policy that stays for the policy owner's entire life) that pays dividends will help in recovering the interest that the policy owner would have otherwise paid the banking institution. The dividend, thus achieved, can then be lent to others, so the owner makes much in the same way, what banks make when they give out loans. Since there is no tax levied on the dividends, the owner would reduce his/her tax liability as well.
A policy owner can also borrow cash from his/her (whole) life insurance policy, once again, without having to pay any tax. What's even nelson estate agents better is that he/she can actually borrow 100% of the cash value at any point. When the owner gives a loan to himself/herself, the interest thus attained goes back into his/her account. That way, owners don't lose any money whatsoever. They just need to ensure that they pay back the loans, or else the policy's value that was supposed to grow, will instead fall.
That is the beauty of Infinite Banking. It makes policy owners their own bankers.
Considering that policy owners are now their own bankers, they go ahead and finance things which they always wanted to, without bothering about the interest payment, for it goes back into their own policy accounts, and not to a money lender or bank. For example, owners can now consider financing anything from cars, to business, real estate to charitable trusts, and even look at retirement solutions. Infinite banking throws up a plethora of opportunities. The possibilities are almost endless.

However, it is not as easy as it seems. It takes a while for policies to reach a point where the returns become equal to the costs of the premium paid (premium is paid in the initial 5-7 years of the policy. Called the Capitalization Phase), and the value of the policy to be substantial enough to permit borrowing from it. Basically, in the first few years one has to be patient; money will be spent and spent alone. But if you wait the right amount of time, it will reap the desired benefits. They key here is to be patient, and not be bothered by the fact that the expenditure is not yielding any immediate results.
People, who consider the infinite banking process to be too simple and uncomplicated, think that it might be a scam. More often than not, people doubt simple plans; they find it difficult to digest that something so basic could be so beneficial, forgetting that it is life's simpler things that are actually the purest and most true.