How Having Cash Value Life Insurance Benefits Entrepreneurs

When entrepreneurs go looking for life insurance, they need to take a number of things into account: which policy will benefit my beneficiaries the most after I’m gone? Which policy will provide the most value for my money? And – more specifically to the entrepreneur and business owner – which will help me to achieve my entrepreneurial goals in life, and even in death?

For every entrepreneur, life insurance is a must, as it helps to facilitate the running of your business – or businesses – when you’re gone. Not to mention, life insurance provides security to clients and investors, who will feel safer investing in your business, if they know that – even in death – there are measures in place to keep your business moving.

In addition to providing this vital cover, cash value life insurance comes with the added perk of being useful to you while you’re living; the cash value aspect of the policy – affectionately called the ‘living benefit’ – can be accessed while you’re alive, and is accumulated from a portion of the premium you pay each month for the life insurance policy.

But how can having a cash value life insurance policy benefit you as an entrepreneur?

You can use the cash value portion of your life insurance as your own personal bank.

As mentioned before, the cash value portion of your life insurance policy can be used while you’re still alive, and many entrepreneurs choose to take advantage of this, and choose to use it as their personal bank.

One of the key advantages of storing your savings in your ‘cash value’ kitty, is that the rate of interest is – typically – significantly higher than it would be from a conventional bank account. Namely, cash value life insurance providers offer a 4-6% interest rate, making it a great place to store – and grow – your money.

Moreover, the money stored in ‘cash value’ pot is eligible for all kinds of tax benefits. For one, you can take out large sums from your policy without being taxed – the only portion that is taxable is the interest you earn on top of the premiums that you’ve invested in the policy.

Additionally, if you’re inclined to think that income/estate taxes are going to increase, you can shelter your wealth from these taxes with cash value life insurance.

All of these things are important to the serious entrepreneur, as growing – and being smart with – your money is one of the most important rules of entrepreneurship.

You can take out loans against your policy – without paying taxes on the loan.

Just as you don’t have to pay tax on a personal loan, loans taken by the entrepreneur against the cash value life insurance policy – for business purposes, or for anything else – aren’t taxed, and usually have lower interest rates than other loans, saving you business expense, compared with if you took out a business loan from a traditional bank.

More than this, loans taken out against your cash value life insurance policy are much more flexible than other loans, as – since your cash value is used as collateral – you don’t necessarily have to make payments every single month.

So, if business isn’t too good for a period – as is sometimes unavoidable in the world of entrepreneurship – and you’re a bit short on cash, you’re not forced to make a payment that you can’t cope with.

Lastly, loans taken against your life insurance policy are easier – and quicker – to obtain, as they don’t require the credit checks that loans from traditional banks do, since the loan is financed by the policy, and the cash value aspect of the policy provides sufficient collateral for security.

Life insurance is imperative for ensuring that your legacy continues, even when you’re gone.

 While this isn’t unique to cash value life insurance, it’s one of the most important benefits to entrepreneurs with a business they want to protect – even if they’re no longer around to run it.

For example, if you have a business partner, a life insurance payout can aid them to ensure that your shared dream stays alive, as it provides the financial cushioning required to compensate for the loss of your presence within the business, and help to ease the stress of the re-hiring process, if your business has a hope of moving on without a key person there to run it.

Additionally, life insurance can help to cover any outstanding costs or debts associated with you and your business, including any outstanding loans, credit debt, salaries owed, tax obligations and property-related debts, such as the mortgage or lease for your business property.

If you’re looking to boost your entrepreneurial game – and to make the most out of the money you have – consider investing in cash value life insurance, to recapture the control of your capital, grow your earnings, and take advantage of the tax benefits that a cash value life insurance policy offers.

Why Real Estate Investors Should Consider Saving Money in Whole Life Insurance Policy

When it comes to real estate investment, one of the most valuable commodities to have is liquidity – an easily accessible flow of cash that you can use to invest in the best real estate bargains.

In recent years, real estate investors across the country have been discovering the benefits and financial advantages that a cash value life insurance policy has to offer, for its relative liquidity, among its many other investment benefits.

Since the ‘cash value’ aspect of a life insurance policy can be accessed while the policyholder is still living, this has lead many smart and successful real estate investors to make use of it as their own personal savings account, as it offers a number of unique benefits that a conventional bank account doesn’t.

So, how can a cash value life insurance policy aid you as a real estate investor?

Typically, the interest earned with cash value is higher than the interest earned from a bank.

 When it comes to the real estate game, having more money to play with is always a plus, and cash value life insurance policies typically offer higher interest rates on the funds stored in the cash value portion of your policy.

Compared to a traditional bank account – where you might earn less than 1% interest on the money you save – the cash value portion of your life insurance policy (which can be used as your own private bank) earns an gauranteed interest of 4% and plus a 6% Dividends, allowing you make your money go further – and grow faster – when you deposit it into your cash value life insurance policy.

The funds in your ‘cash value’ can be accessed without having to pay tax.

In addition to earning more interest than if it were sitting in a conventional bank account, the cash value – or ‘living benefit’ – is allowed to grow tax-free.

Then, if you want to access the funds and transfer them to your business account, all you need to do is ask; after that, the funds are transferred tax free.

Cash value life insurance policies make loans easier to obtain.

 Since liquidity is one of the most important things to a real estate investor, being able to acquire a loan quickly and easily is a valuable commodity.

Loans taken out against your cash value life insurance policy are the most convenient and quick to acquire as, since the policy can be used as collateral (and the policy provider is typically also the provider of the loan) the loan doesn’t require credit checks like a conventional bank loan. This makes the application and acceptance process much quicker, allowing a real estate investor to close in quickly on a property.

Moreover, any loans you take out on against your policy won’t appear on your credit records, so it won’t affect your credit score, or your ability to take out a separate loan from the bank.

There’s no limit as to how much you can pour into your policy.

 Compared to retirement plans – which,  as mandated by the IRS, have an annual saving limit of around $6k per year – cash value life insurance policies allow the policyholder to contribute as much as they want to the policy, so your ‘cash value’ kitty can expand without restriction.

This also means that – in the future – if a desirous, yet expensive, property comes onto the market that you aren’t quite able to come up with the funds to purchase, you have a (potentially) massive lump of savings, which you can easily access and use to quickly snatch the property up.

More than this, the unrestricted, uncapped nature of the cash value life insurance policy means that the high interest rate is even more valuable; the sky is the limit when it comes to the interest you can earn on your ‘cash value’ savings.

You may be able to leverage real estate to pay for the life insurance policy.

 As an investor in real estate, your wealth might be tied up in assets, limiting the liquidity you have on hand to be able to pay the premium for a cash value life insurance policy each month.

However, you can use the real estate you own to finance your policy so that instead of you paying the life insurance premium each month, the bank pays for it instead.

So, if you’re a real estate investor – and you want to be able to access funds more quickly and easily in order to snatch up the very best properties – consider investing in a cash value life insurance policy, to make use of a high-interest, tax-protected savings account, that offers maximum liquidity and cash flow..

© Copyright 2024 Boss Financial, All Rights Reserved.

Designed & Developed by Altastreet.

Verified by MonsterInsights