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The Ketogenic Benefit
How does insulin play a part in the ketogenic diet? It is actually front and center into allowing your body to go into ketogenesis. Most people think eating fat gets you into ketosis. That is only partially true. The counterpart to that idea is that you need to keep your insulin down. So a high fat diet is not enough - it also needs to be low carb. It is the "low carb" aspect that allows you to generate ketones.
Insulin is a hormone in your body used to get glucose into cells. It is also the hormone responsible for storing that glucose when your cells don't want it. It stores the glucose as glycogen in muscles and the liver. When those stores get full, insulin then converts the glucose into fat for further storage.
Thus insulin is the energy storage hormone. If we want to go into ketogenesis, then we need to make sure insulin is not around to store our energy. Rather, we want to use up that energy. That's what ketones are. They come about when your body cannot store energy and has to do something else with it. The energy substrates get sent down a different pathway when insulin is not around.
Keeping insulin levels down is not just good for a ketogenic diet, but it is a good idea no matter what. Hyperinsulinemia can be to blame for a lot of physiological diseases. Most importantly, it helps our bodies become insulin resistant. When there is so much insulin around, your body responds to it less and less.
So, we want to keep insulin down, but we actually don't want it to go too low. If there is absolutely no insulin around, then our body starts burning fat to an extreme nature where we go into ketoacidosis. However, you don't need to worry about this coming from diet alone because our bodies always have a base level of glucose and insulin around no matter what we eat. Keep your focus on making sure insulin is not too high, and your body will take care of it getting too low.
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General information on the roles of insulin: