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If you own a small business and are experiencing financial difficulties and hardship, then there are resources available.
The SBA has several programs to help the small business owner, including the self-employed, sole proprietors, and Independent Contractors:
https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
The Department of the Treasury has some resources worth reading:
https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
The IRS has a special page devoted to this crisis:
https://www.irs.gov/coronavirus
If you have insurance premiums coming due, please call your agent today. Insurance companies are proactively granting grace period extensions and/or premium holidays for policy owners experiencing financial hardship. Many state regulators also have mandatory grace period extensions due to the Corona Crisis.
This is important: Many companies REQUIRE that you contact their customer service department to ask for a grace period extension. If you aren't sure what to do, call your agent immediately.
If you have permanent life insurance, such as Whole Life or Universal Life:
Whole Life often has an Automatic Premium Loan provision, so that if you need to skip a premium, the policy will borrow that premium from your cash values. This prevents the policy from lapsing, but those loans will need to be repaid or the interest will accrue over time and reduce your policies cash value growth. Please call your agent to make sure you understand how this works.
Universal Life policies such as Current Assumption Universal Life (this is the original type of Universal Life, the one most people have), Indexed Universal Life, and Variable Universal Life, if the policy has sufficient cash values, they can withstand a skipped premium or several. Sometimes it makes more sense to borrow the premium rather than just skip it, depending on your policy's design and what the purpose of your plan is. For example, if you are paying the Maximum Guideline Level Premium or the Seven Pay Premium to use your policy as an asset for personal banking or to supplement your future retirement with tax-free income, then borrowing from the policy to pay a premium may be better than just skipping it, especially in this current interest rate environment. Please call your agent to make sure you know all your alternatives.
Universal Life with a Secondary Guarantee or No-Lapse Guarantee provision, is different. Some of these policies have little or no cash values, they often have no loan values, and some of the early designs are extremely premium sensitive so that any premium delays can have substantial long term effects to policy performance. Newer policies have longer grace periods already built in to alleviate the premium timing sensitivity that was common among early designs. If you don't know what you have, then you should call your agent and make sure you understand how your policy works, and how you may deal with a premium that's due during a time of financial hardship.
If your agent is missing-in-action, retired, disabled, deceased, or has left the insurance business, then call me. I'll help you figure out what you have and what your options are. During this Corona crisis, I am not charging any fees for these policy reviews, as long as the policies are owned by individuals.*
I can be reached directly at (800) 680-5596 during normal business hours, or by appointment at other times, or on weekends.
You can also email me at
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, or fill out this form:
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* Corporate Owned Life Insurance, Banked Owned Life Insurance, and Trust Owned Life Insurance still require a fee for policy audits and other services.
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