One advantage of most cash value life insurance policies is that the policy owner can take a loan against their cash value, quickly and easily. With a simple phone call, you can usually initiate a loan with no traditional qualification hassles, credit check, or other financial requirements. And in many instances, you could have a check in your possession within a week or even sooner if a direct deposit to a bank account is available. There is also a great deal of flexibility when it comes to when and how you can pay it back, much more so than with a traditional bank loan.
Connecticut is a declared disaster from the Coronavirus as of 1/31/20 by the SBA (US Small Business Administration), which makes Connecticut businesses potentially eligible for disaster loan assistance. It is unclear at the moment what the criteria will be for eligibility, and it is also undecided as to whether banks or the SBA will administer the loans, or when these loans will be available. The SBA website page about the coronavirus offers a guide that hopefully will be updated as the details become clear.
In addition to these low-rate SBA loans, the State of CT and federal governments have begun to put some economic safety measures in place, such as extending corporate tax due dates and requiring utilities to halt disconnection for residential non-payments.
Still, employees and small business owners may feel the effects of less work hours, less customer business, staff shortages, and more. Some may consider borrowing from their 401k, although prematurely accessing it, especially while the markets are at a long-time low, could be a costly move.
Whether you are having business or personal cash flow problems, taking a loan against the cash value in your life insurance policy may be the ideal short term solution during this time. It can be easy and quick to obtain, with payback flexibility beyond a traditional bank loan.
If you have any questions about your life insurance policy and how to take a loan from it, please call me at 860-836-9314 or email Bill@harmonywealthystrategies.com. I am offering free consultation even if I am not the agent of record on the policy.
Bill McAllister, CLU®
Harmony Wealth Strategies