5 Reasons Cash Value Life insurance fits the entrepreneur

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As an enterprising individual, you will likely create wealth through your own business endeavors.  And no doubt you've heard this mantra before: "Cash is King!"  It follows, then, that placing your money in a place where you can easily access it would be very helpful.  Traditional retirement plans lock your money up until you reach retirement, and even then, when you withdraw you are creating a taxable event (unless it is Roth IRA money).  The cash value account in life insurance is available to you anytime you need it.  Just one phone call and you'll have money when you need to take advantage of that next opportunity.

I don't always advocate using personal assets as collateral, but if that perfect financing opportunity comes from your bank, this may be your only option.  Retirement accounts cannot be used as collateral - and using home equity may make you feel a little queasy.  Having the option to use your cash value to get a deal done just might help you close an important deal.

First, if you purchase the right type of life insurance, the cash value will not drop in value if the stock market experiences a drop.  This creates an incredible opportunity: When the economy is struggling...you will have liquid cash on hand will be able to possibly take an advantage of some sort of opportunity.  Buy low, sell high, right?  Second, in many states, especially when a dependent is listed as a beneficiary, creditors cannot get their hands on your cash value - even in bankruptcy! If you find yourself in a difficult financial situation, your cash value may become your best friend because it will still be there for you when you are trying to get back on your feet.  I know, I know....that would never happen to YOU, right?  Well...I didn't think it would happen to me either.  (Read my Story)

* Only certain types of life insurance policies are protected from stock market crashes, so always consult a knowledgeable insurance agent on this matter.  Additionally, protection from creditors is a legal matter and the laws differ by state, so always consult a knowledgeable attorney on this matter. who is 

When done properly, (i.e. under the guidance of a knowledgeable agent) you will be able to access your cash value without causing a taxable event.  Additionally, the earnings in the cash value will never be taxed, as long as you keep your policy in force and do not let it lapse or cancel the policy.  There are not many tax-free strategies out there, but this is one of them, and I strongly urge you to educate yourself on this aspect of life insurance.

This is the part that I really like.  When you want to use the cash value that you have saved up in your policy, rather than cashing in the policy to get your hands on the cash, you simply take a loan AGAINST your cash value.  Most life insurance companies set a fixed interest rate that you will pay if your borrow - and here is the best part - the rate usually lower than what your average earnings will be inside the policy!  In other words, if you have $50,000 in cash value, and decide to borrow $30,000; your entire $50,000 continues to EARN interest while you only pay interest on the $30,000 loan.  Let that sink in.  Re-read that last sentence if you have to.  This concept is difficult for many people to understand, but I go into much greater detail in my presentations and in this free guide: Entrepreneurs Guide to Buying Life Insurance.