April 20, 2020
It's been a crazy past few weeks due to our current Coronavirus pandemic and the uncertainty of how this situation unfolds in high. One of our best strategies thus far in our attempt to combat this virus has been Social Distancing. An effort made with the noble goal of ""flattening the curve"" and preventing more people from getting sick.
The impact, though on our broader society, is impossible to ignore.
We've seen businesses being classified as Essential and Non-Essential, with Non-Essentials being asked or in the case of bars, restaurants and a few others, being mandated to remain closed. Schools are also closed, which brings about an entirely new adjustment for parents.
With all that's happening, many, many people are not only worried about getting sick, but they're also concerned about whether they will have a job to return to and if they can afford to pay their bills in the meantime.
A very valid concern considering the US unemployment rate currently stands at 22 million people out of jobs, a scary figure when compared to the 11 million unemployed at the height of the 2008 financial crisis. Even in Trinidad & Tobago, our government has already allocated 400 million salary relief grant for COVID-19 unemployed.
In times like these, having an Emergency Fund can provide you with a certain level of peace of mind. If you don’t have a rainy-day fund already, it’s time to set aside whatever cash you can. However, in place of such, I'd like to share a light on a financial lifeline - a solution of sorts - one you may have forgotten about. If you don’t have a rainy-day fund already, it’s time to set aside whatever cash you can.
Permanent Life Insurance
While primarily bought for its lifetime protection, these policies are often viewed as a "set it and forget it" solution. One of the beauties of this financial tool is what it does while you aren't paying attention to it: It accumulates cash value.
Money- money you can tap now to help tide you through this financial uncertainty should the need arise.
When the 2008 financial crisis hit, DereelTech LLC, a recycling company, based in Indiana, USA almost saw 25 years of growth and success wiped out.
With business associates going bankrupt, many service contracts being cancelled and his bank recalling their loans, Mike Jaap, owner of DereelTech, thought his business was doomed.
Fortunately, after a discussion with his financial advisor, Mike was reminded about a permanent life insurance policy he had in place that held a cash value he was able to tap into through that tough financial time and effectively keep his business afloat and his staff employed.
"I never did think that a life insurance policy, especially when I took it, would ever have a bearing on saving my business, and I'm glad to say that it did." - Mike Jap (Link to video for the full story here)
If you currently have a permanent life insurance policy (not a term policy—click here to understand the difference), contact your insurance agent or financial advisor and talk through how you can tap into that money. You can often access it in days. Or you can contact your insurance company directly as well.
It's important to note that if you withdraw or borrow funds from your policy, it will reduce its cash value and death benefit if not repaid, but, in uncertain times like these, it pays to consider all your options based on your unique circumstances.
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