Consider this scenario:
As an aspiring entrepreneur, Jim has spent the last 15 years considering the idea of starting his own wood shop and cabinetry business. While he has an office job as an accountant, his passion has always been in creating beautiful, one-of-a-kind wood pieces. So, he’s finally decided he is going to take the jump and start his own small business.
Jim knows that he needs to find funding for his new business. He doesn’t want to dip into his life savings because he wants to keep that as a back-up, but the bank won’t give him a loan because he can’t prove he will be able to sustain revenue.
Does Jim have any other options?
Yes. He can borrow the cash value of his permanent life insurance policy.
How can he use his permanent life insurance?
He’s been paying his premiums for his permanent life insurance policy for the past 10 years, and it’s accumulated quite a bit of cash value. Jim can borrow against the cash value of his policy, and get started on his business.
What else can you do with your life insurance?
Life insurance is typically viewed useful only in the case that someone dies, but with permanent life insurance there are some benefits you can take advantage of during your lifetime.
Permanent life insurance provides lifelong protection. This means, you don’t have to wait until you pass to receive its benefits. It accumulates cash value from the premiums you pay.
Most people don’t know that money can be used for just about anything: To start your own business, send a child to college, take time off work to care for a sick family member.
Just like Jim in the example above, keep your life insurance as a possibility when you need cash and can’t take out a loan or dip into your savings. But before making any decision, check with your financial advisor to make sure that this is the right decision for you and your financial future.