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DID YOU KNOW YOU CAN USE LIFE INSURANCE TO LAUNCH, GROW OR SAVE YOUR BUSINESS?

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Your whole life insurance can help your business

Starting or growing a company requires financing. However, for many entrepreneurs, that’s hard to come by. But did you know you may be able to tap one often-overlooked financial product — whole life insurance — to find the money you need? Whole life insurance policies are long-term plans that not only provide financial protection for your loved ones after you’re gone but also build up a cash value over your lifetime. That’s money you can borrow against to pay for things like a home, college or a business. (You can hear about one Guardian customer’s journey of opening a business with the help of a whole life policy here.) In fact, you may be surprised by well-known brands that were either launched or expanded using the cash value of their insurance plans.

Launching the Pampered Chef

In 1980, stay-at-home mom and entrepreneur Doris Christopher developed the idea for a business through which other homemakers would put on cooking presentations in their homes for friends and neighbors using Christopher’s cookware and recipes. For financing, she borrowed $3,000 from the cash value of her whole life insurance plan and launched the Pampered Chef in her Chicago home.1 The business took off, and today the company’s 60,000 sales reps sell its kitchen gadgets through 1 million in-home cooking presentations a year.2

Growing Disney 

In the 1950s, Walt Disney had an ambitious plan: to build a family-friendly amusement park featuring innovative rides and attractions with modern amenities. Sure, regional parks already existed, but this one would leverage the power of well-known cartoon characters to attract visitors from all over the country. Disney sold his vacation home and emptied his savings, but it wasn’t enough to fund the effort. Finally, Disney looked to the cash value from his whole life insurance policy to finance the park. By the end of its first year, Disneyland had hosted more than 3.5 million visitors.3

Saving McDonald’s From Growing Pains

In 1961, when Ray Kroc tried to expand McDonald’s, he had to contend with increasing cash flow shortages, steep competition and a difficult economy. To pay his key employees and launch an advertising campaign focused on the now ubiquitous mascot Ronald McDonald, Kroc borrowed cash value from two whole life insurance policies. It paid off handsomely, of course, and McDonald’s is now a global brand in over 100 countries.4

There are even more examples out there of famous brands that have benefited from the cash value of life insurance — all amazing success stories. Whole life can help your business, too, but when you’re starting out, check out the various types of insurance that can benefit your business beyond their cash value. Make no mistake: launching, growing and running a business is one of the most difficult and tricky things anyone can do. But with whole life insurance, you can protect your loved ones if you pass away and establish another source of funding for your dream. 

 

SOURCES

1 “Slideshow: 6 famous brands started or saved by life insurance,” Think Advisor, 2012

2 “The Pampered Chef Ltd,” Vault, 2017

3 “Slideshow: 6 famous brands started or saved by life insurance,” Think Advisor, 2012

4 Ibid.

Links to external sites are provided for your convenience in locating related information and services. Guardian, its subsidiaries, agents, and employees expressly disclaim any responsibility for and do not maintain, control, recommend, or endorse third-party sites, organizations, products, or services, and make no representation as to the completeness, suitability, or quality thereof.

5Dividends are not guaranteed. They are declared annually by Guardian’s Board of Directors.

6Policy benefits are reduced by any outstanding loans and loan interest. Dividends, if any, are affected by policy loans and loan interest. If the policy lapses, or is surrendered, any loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable distribution from the policy may also be subject to a 10% federal tax penalty.