![]() The policyholder decides the payback schedule. #Big business owner fullRegardless of the amount of the policy loan, insurance carriers still pay the policyholder interest on the full cash value of the policy. Instead of paying high interest rates to a bank, the business owner finances their expenses in a way that allows them to recapture the cost of interest. ![]() Business owners can take out multiple policy loans year after year. Capital is then funneled back to the insurance company so funds will be available again for future business expenses. When business expenses arise, the owner can use a policy loan, up to the amount of cash value in the policy, to cover business costs. While the amount of the dividend paid may vary from year to year, mutual companies have successfully paid out dividends for over 200 years, even during crises like WWI and WWII, the Great Depression, the Great Recession, and pandemics like the Spanish Flu.Īs a contractual owner of the insurance policy, the business owner has first rights to its accumulated cash value. ![]() Mutual life insurance companies have a responsibility to policyholders and distribute dividends based on profits earned over the course of a fiscal year. This cash value accumulates over time due to interest earned and dividends paid. Whole life insurance for business owners has an advantage many other types of insurance don’t: It earns cash value. Why do these companies have whole life policies? What are the benefits?Here are a few reasons why whole life is good for business: Whole life insurance is an ideal place for business capital Many other companies, like General Electric and Wal-Mart have done the same. Big Business Lessons for Small Businessesīetween 20 Wells Fargo increased their whole life insurance holdings, in the form of Tier 1 Assets, from $5 billion to $20 billion. #Big business owner freeIt can help businesses break free from traditional bank loans, benefit their employees, and earn tax advantages. The truth is, regardless of size, all business owners need whole life insurance. Many small or medium sized business owners don’t know how beneficial a business life insurance policy can be to a successful company. ![]()
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