Leveraging a Whole Life Insurance Policy... AKA Infinite Banking Concept

I wanted to start a thread on leveraging a whole life insurance policy as I didn't see it here discussed before. With that said, I understand that there's a negative stigma regarding whole life policies and the strategy isn't for everyone.

I went down this rabbit hole over the weekend and started researching as much as I could, but I still have a few gaps in knowledge that I'm hoping someone here can shed light on. I'll try to distill what I've learned here and I'm hoping Cunningham's Law applies.

If you're contemplating about this strategy, then I assume you've already maxed out your other tax sheltering or tax deferral vehicles. This strategy also takes years to implement and develop, and there is significant upfront capital required to make it work practically. For those with corporations, this is another tax strategy you can use - purchase policies for your "employees" using retained earnings.

The premise... dumbed down by my dummy understanding...
With a whole life insurance policy, monthly premiums are paid into the policy to grow the Cash Surrender Value (CSV) and the Death Benefit of the policy. For each year of the policy, the insurance company would pay out a dividend according to the "dividend scale interest rate", and the CSV and Death Benefit would increase in relation to the interest rate. Note that the policy has guaranteed values as well, so in theory, your CSV and Death Benefit are protected.

Over a long period of time (10+ years), and depending on how much your premiums were, your CSV would grow to some substantial number, upon which you would be able to take out a LOC using the policy as collateral. Because you're taking out a loan, you're not realizing any capital gains, so there are no taxes to pay. Regarding your CSV, because you're borrowing against it and not withdrawing it from the policy, it continues to compoundly grow as well. In essence, you're able to realize tax-free growth and get access to your principal and gains tax free.

As you're taking out a LOC, you can also capitalize the interest. So in theory, like a HELOC, you can never pay it off and just refinance at a later time as your CSV continues to grow. When you die, the Death Benefit would pay off the LOC. Since it's an insurance policy, your Death Benefit is paid out tax free.

Paid Up Additions
Under the conventional policy model, in order for your CSV to grow to anything substantial, you will need at least a decade to build it up. Like mortgages, the first few years of your premiums is going towards commissions, overhead, and the Death Benefit portion of your policy. As a result, you typically don't "break even" until close to a decade when the sum of your premiums are greater than your CSV.

So how would you build up the CSV relatively quickly and not need to wait a decade? Apparently you can make bolus deposits into the policy as Paid Up Additions - basically buying mini policies that get added to your bigger policy. These PUAs will increase your CSV and Death Benefit and also increase the dividends you receive each year. There is a maximum amount per year that is set by CRA, so you can't go crazy here.

What's the catch?
This section is where I have a lot of gaps, and I'm hoping we can get some discussion here around them. I've highlighted a few things I've been able to come up with...

1. You need a lot of capital and time to make this strategy work. I'm talking 5-figure annual premiums and still not hitting breakeven point until Year 9 or Year 10 depending on your age, health, and death benefit coverage requirements. The older you are, the more money you're going to be putting into the death benefit portion of the policy and not growing your CSV. Take the equivalent term life insurance and you're paying 1/20th of the premiums.
2. Your annual dividend scale interest rate is at the mercy of the insurance company, and it has been decreasing every year these past 5 years due to a low interest rate environment. Currently Manulife and Sunlife are at 6%. I've read that these usually lag the bond market, and it is likely that the interest rates will continue to fall in the near future.
3. I don't know what kind of interest rates will financial institutions charge for the LOC. What you're essentially doing is "profiting" from the difference between the cost to borrow and your expected returns. If anyone has implemented this strategy, are you getting Prime? Prime + 1%?
4. It's a whole life policy, so you're going to need to pay premiums until the day you die, especially if you've taken out LOCs with the policy as collateral. Once you start you can't really stop.
5. A lot of the "marketing" material, especially when you search for Infinite Banking Concept on Google, says to purchase a policy from a mutual insurance company - one that is owned by its policy holders. I believe the strategy here is to obtain the LOC from said insurance company, and any interest you pay on your loan is "returned" back to you because you're part owner of the insurance company. Not entirely sure how this would work out as the insurance company needs to make money somehow. If they're charging you 3% interest you're not getting that full 3% interest back as dividends.

Why I'm thinking about it?
Instead of an informal trust account, I was thinking of taking out a policy for my children. The premiums would be a couple hundred a month, and they wouldn't need access to the CSV until they're >20 years old for any big purchases. Tax-wise it seems less complicated than an informal trust account where the dividends and interest can be attributed back to me.

Anyway food for thought. Please discuss.