Tangled Web

Personal Policies

Life insurance as a business asset.

Need money fast? There's an easy way for entrepreneurs to feed their cash flow needs: By borrowing on a life insurance policy.

"There's no reason not to look at your personal life insurance policy as a business asset," says David Schulman, chartered life underwriter and chartered financial counselor for Mass Mutual in South Florida. "Interest rates from borrowing on your life insurance policy will be lower than a rate from your bank." The process can be quicker, too.

If you're the sole proprietor of your business, a life insurance policy will make obtaining credit from any source easier. "Typically, creditors will be interested in making sure your debts will be covered in case something happens to you," says Schulman. You'll also accumulate a strategic asset that you can borrow from, or against, if your business experiences a cash flow problem later.

Contact Sources

ChannelPoint Inc., (719) 260-1232, http://www.channelpoint.com

Mass Mutual, (954) 938-8800, fax: (954) 351-2468.

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This article was originally published in the May 1999 print edition of Entrepreneur with the headline: Tangled Web.

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