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How much longer will the market continue with this upward momentum? 

With the market in such an upswing and the debt ratio growing, many business owners are sharing a valid concern involving what happens if and when the market finally dips. What happens if it not only dips but takes a major hit? How businesses make it through the regrouping time? What if a similar situation occurs from 2008?

Many are turning to key man life insurance. Right now interest rates for cash value whole life insurance policies have raised to 4% and if it is placed with a mutual life insurance company, they give dividends which pays an additional 5% each year. In the good economic times you can put cash into the policies and grow your capital.

In the down times, businesses can borrow against the cash value at 5% interest annually. In this case, the dividends would cover the interest. By doing it this way, you won’t need to pay a bank the higher interest rates, wouldn’t have to hit your credit by taking another business loan, or report anything come tax time.

Since you are borrowing from the insurance carrier it is not touching your cash value so that is continuing to grow at the 4% a year. Not only that, but you don’t have to pay it back as it will be deducted from the payout of the life insurance policy on the business owner.

During the good economic times you can grow the capital of your business, in the downtimes you can have access to cash at any point with very little to no drawback.

Life insurance is the most dependable industry out there as it was the only industry in the Great Depression that did not take a major hit. JC Penney and Walt Disney saved their businesses through life insurance during this time by borrowing against their policy.

To explore this further with me, email me at chris@therockinsure.com.