Key life events when a Valley Cash Value Line of Credit is a smart option
1. Buy or Renovate a Home
Buying a home can be a stressful financial undertaking. You want to make sure you have enough money for a down payment, closing costs, and other expenses.
Adding to that, right now, the housing market is hot. “In January of 2022, homes were only staying on the market an average of 61 days, which is 10 days less than in January 2021.”1
With greater demand than supply, if you want your dream home, you have to move quickly! If you have a whole life insurance policy, borrowing against the cash value to make a down payment can help make homeownership a reality. You may be able to get loan approval within 3-5 business days or sooner. Once the loan has closed and you receive your advance checks, you may use your line of credit for a down payment or full purchase price of the home. Or if you need to make home improvements, a Cash Value Line of Credit can be used for home repairs too.
For parents who want to help adult children who aren’t in a financial position to make a large down payment, leveraging the cash value in their own whole life insurance policy with a Cash Value Line of Credit is one way to give the gift of homeownership.
2. Invest in Real Estate
Real estate investing is one way to build long-term wealth. According
to Gallup, “one third of Americans consider real estate one of the best
long-term investments.”2
To buy a home or commercial property or finance repairs or renovations, you’ll likely need to come up with a large sum of cash.
With a Cash Value Line of Credit, you can borrow up to 95% of the
cash value in your whole life insurance policy and use your credit line
to invest in real estate, without having to liquidate other investments.
According to NerdWallet, “with housing inventory tight and buyer demand
high, paying cash is one tactic some buyers are leveraging in order to
win bidding wars.”3
This strategy could be considered doubly beneficial because you
leverage your whole life insurance policy to make money with a real
estate investment while your cash value will still be earning dividends.
3. Start or Expand a Business
You’ve got a great business idea, but you need a little extra cash to
get it off the ground. You could apply for a business or commercial
loan, but you’re concerned about interest rates, long wait times, and
strict requirements.
Forbes reported “In 2020, 63% of those companies didn’t apply for
financing because they were afraid a lender would deny their
application, according to Federal Reserve data. Many businesses that did
seek financing (after March of the same year) were denied (30%) or only
qualified for a portion of the funds they requested (26%).”4
But there’s another option. A Cash Value Line of Credit that allows
you to borrow against your whole life insurance policy can be a great
way to bridge the gap between where you are today and where you want to
be tomorrow. A Cash Value Line of Credit is a convenient borrowing
option that is tailored to your unique borrowing needs.
A Cash Value Line of Credit can provide the extra cash you need to
get your business off the ground or take it to the next level.
4. Cover an Emergency Expense
Emergency expenses can come in all forms—whether it’s a medical bill,
a job loss, a natural disaster or any number of other situations
outside of your control. When you don’t have enough savings to cover the
cost, it can make an already stressful situation worse. CNBC recently
reported that “more than half, 51%, of Americans have less than three
months’ worth of emergency savings, according to a recent survey from personal finance website Bankrate.” 5
That could be a cause for concern. Take the real-life example of
recent severe weather occurrences—a reported record-setting month of 225
tornadoes, spanning dozens of states.6 In situations like
this, where home damage may need to be fixed long before the insurance
company gets to it, having access to a source of funds can be a
lifesaver. With a Cash Value Line of Credit, you can borrow against an
existing whole life insurance policy rather than dip into your long-term
savings.
5. Survive a Cash Flow Crunch
If you’re a small business owner, it’s possible at some point you may experience a shortfall of cash. In fact, poor cash flow management is the #1 reason small businesses fail according to a study by U.S. Bank.7
However, a cash flow problem doesn’t mean your business will go under or that you aren’t making sales; it just means your expenses exceed your available cash.
One way to solve a temporary situation like this is to take out a Cash Value Line of Credit that is secured by the cash surrender value of your whole life insurance policy. It can help you easily access cash to cover payroll, advertising, or fix a broken piece of equipment, for example, so that you can keep your business running.
Many small businesses experienced a cash flow crunch at the height of the pandemic. For some, qualifying for a Paycheck Protection Program (PPP) loan solved that problem. However, as a nationwide Federal Reserve survey found, “more than one in three nonemployer firms received none of the financing for which they applied. Among smaller nonemployer firms, 42% received none of the financing they sought. The same was true for 35% of larger nonemployer applicant firms.” 8
Turning to other sources, like a Cash Value Line of Credit, can help keep a business running smoothly.
6. Get Married
You’ve set a date, booked the venue, and invited all your friends and family. You’ve also done your best to save for the biggest day of your life. But as wedding costs continue to rise, it can be hard to keep up with the ever-increasing expenses. In fact, the average couple spent $28,000 ($34,000 including the engagement ring) in 2021, according to the TheKnot.com.9 To help cover the cost, you could take out a personal loan, but those come with a lot of strings attached. There’s a better way to finance your wedding: a Cash Value Line of Credit secured by the cash surrender value of your whole life insurance policy. The Cash Value Line of Credit enables the borrower to borrow up to 95% of the cash surrender value of the whole life insurance policy and can be accessed whenever you need money. It’s a convenient way to get the money you need for whatever you’re planning — from the venue to the catering to the band.
For parents with an existing whole life insurance policy that’s been in-force for a while, and therefore, potentially accumulated more in cash value, you have an asset you could leverage to help finance your son’s or daughter’s big day using a Cash Value Line of Credit.
7. Purchase a Luxury Item
If you’ve ever hesitated to buy a new car or boat or take that fancy vacation because you couldn’t afford it, then you know how hard it can be to save for big-ticket items.
But what you may not realize is that if you have a whole life insurance policy building up cash value, you can borrow up to 95% of the cash value with a Cash Value Line of Credit to make these luxury purchases.
When you are leveraging the cash value within your whole life insurance policy, the decision is yours as to how you spend that money.
8. Have a Baby
You’ve got a bundle of joy on the way and your bank account is feeling the pressure. Everyone’s situation looks different —adoption, unpaid maternity or paternity leave, hospital stays, IVF—and all can be costly.
For instance, according to U.S. News, “the cost to adopt a child can range between nearly $0 and $50,000, depending on the process you use and country from which you adopt.10
SmartAsset cites data from FAIR Health stating the average cost of birthing a child ranges from $5,000 to $14,500 or more.”11 Verywell Family reported the average amount spent for IVF was $19,234.12
Health insurance may pay some of the costs associated with growing your family, or you may qualify for lower premiums, but if you need cash fast, there are other options. A Cash Value Line of Credit secured by your whole life insurance policy can help you pay for big expenses that come with welcoming a baby into the world. With a Cash Value Line of Credit, you can access your credit line when you need it, for whatever you need, via a checkbook. The Cash Value Line of Credit has an easy application process and no closing fees*.
9. Relocate for a New Job
When you find a new job, you may have to make some big moves. Hiring a moving company and getting settled into a new place can cost a lot of money, and your new employer may not cover the cost.
If you can qualify for a Cash Value Line of Credit, where you borrow money secured by the cash value of your whole life insurance policy and make interest-only payments during the term of the loan, you may be able to borrow the money needed without putting a huge dent in your budget.
The best part? It’s simple to apply, and you can do it all online.
10. Consolidate or Refinance Debt
If you’re like most people, you have a mix of credit cards, mortgages, car loans, and other loans that carry high interest rates and monthly payments. Some may be for personal use or for business.
A Cash Value Line of Credit is a line of credit secured by the cash surrender value of your whole life insurance policy.
You can use the line of credit how you’d like, including consolidating or refinancing existing debt. You will only be required to make monthly interest payments during the term of the loan.
1. Buy or Renovate a Home
Buying a home can be a stressful financial undertaking. You want to make sure you have enough money for a down payment, closing costs, and other expenses.
Adding to that, right now, the housing market is hot. “In January of 2022, homes were only staying on the market an average of 61 days, which is 10 days less than in January 2021.”1
With greater demand than supply, if you want your dream home, you have to move quickly! If you have a whole life insurance policy, borrowing against the cash value to make a down payment can help make homeownership a reality. You may be able to get loan approval within 3-5 business days or sooner. Once the loan has closed and you receive your advance checks, you may use your line of credit for a down payment or full purchase price of the home. Or if you need to make home improvements, a Cash Value Line of Credit can be used for home repairs too.
For parents who want to help adult children who aren’t in a financial position to make a large down payment, leveraging the cash value in their own whole life insurance policy with a Cash Value Line of Credit is one way to give the gift of homeownership.
2. Invest in Real Estate
Real estate investing is one way to build long-term wealth. According to Gallup, “one third of Americans consider real estate one of the best long-term investments.”2
To buy a home or commercial property or finance repairs or renovations, you’ll likely need to come up with a large sum of cash.
With a Cash Value Line of Credit, you can borrow up to 95% of the cash value in your whole life insurance policy and use your credit line to invest in real estate, without having to liquidate other investments. According to NerdWallet, “with housing inventory tight and buyer demand high, paying cash is one tactic some buyers are leveraging in order to win bidding wars.”3
This strategy could be considered doubly beneficial because you leverage your whole life insurance policy to make money with a real estate investment while your cash value will still be earning dividends.
3. Start or Expand a Business
You’ve got a great business idea, but you need a little extra cash to get it off the ground. You could apply for a business or commercial loan, but you’re concerned about interest rates, long wait times, and strict requirements.
Forbes reported “In 2020, 63% of those companies didn’t apply for financing because they were afraid a lender would deny their application, according to Federal Reserve data. Many businesses that did seek financing (after March of the same year) were denied (30%) or only qualified for a portion of the funds they requested (26%).”4
But there’s another option. A Cash Value Line of Credit that allows you to borrow against your whole life insurance policy can be a great way to bridge the gap between where you are today and where you want to be tomorrow. A Cash Value Line of Credit is a convenient borrowing option that is tailored to your unique borrowing needs.
A Cash Value Line of Credit can provide the extra cash you need to get your business off the ground or take it to the next level.
4. Cover an Emergency Expense
Emergency expenses can come in all forms—whether it’s a medical bill, a job loss, a natural disaster or any number of other situations outside of your control. When you don’t have enough savings to cover the cost, it can make an already stressful situation worse. CNBC recently reported that “more than half, 51%, of Americans have less than three months’ worth of emergency savings, according to a recent survey from personal finance website Bankrate.” 5
That could be a cause for concern. Take the real-life example of recent severe weather occurrences—a reported record-setting month of 225 tornadoes, spanning dozens of states.6 In situations like this, where home damage may need to be fixed long before the insurance company gets to it, having access to a source of funds can be a lifesaver. With a Cash Value Line of Credit, you can borrow against an existing whole life insurance policy rather than dip into your long-term savings.
5. Survive a Cash Flow Crunch
If you’re a small business owner, it’s possible at some point you may experience a shortfall of cash. In fact, poor cash flow management is the #1 reason small businesses fail according to a study by U.S. Bank.7
However, a cash flow problem doesn’t mean your business will go under or that you aren’t making sales; it just means your expenses exceed your available cash.
One way to solve a temporary situation like this is to take out a Cash Value Line of Credit that is secured by the cash surrender value of your whole life insurance policy. It can help you easily access cash to cover payroll, advertising, or fix a broken piece of equipment, for example, so that you can keep your business running.
Many small businesses experienced a cash flow crunch at the height of the pandemic. For some, qualifying for a Paycheck Protection Program (PPP) loan solved that problem. However, as a nationwide Federal Reserve survey found, “more than one in three nonemployer firms received none of the financing for which they applied. Among smaller nonemployer firms, 42% received none of the financing they sought. The same was true for 35% of larger nonemployer applicant firms.” 8
Turning to other sources, like a Cash Value Line of Credit, can help keep a business running smoothly.
6. Get Married
You’ve set a date, booked the venue, and invited all your friends and family. You’ve also done your best to save for the biggest day of your life. But as wedding costs continue to rise, it can be hard to keep up with the ever-increasing expenses. In fact, the average couple spent $28,000 ($34,000 including the engagement ring) in 2021, according to the TheKnot.com.9 To help cover the cost, you could take out a personal loan, but those come with a lot of strings attached. There’s a better way to finance your wedding: a Cash Value Line of Credit secured by the cash surrender value of your whole life insurance policy. The Cash Value Line of Credit enables the borrower to borrow up to 95% of the cash surrender value of the whole life insurance policy and can be accessed whenever you need money. It’s a convenient way to get the money you need for whatever you’re planning — from the venue to the catering to the band.
7. Purchase a Luxury Item
If you’ve ever hesitated to buy a new car or boat or take that fancy vacation because you couldn’t afford it, then you know how hard it can be to save for big-ticket items.
But what you may not realize is that if you have a whole life insurance policy building up cash value, you can borrow up to 95% of the cash value with a Cash Value Line of Credit to make these luxury purchases.
When you are leveraging the cash value within your whole life insurance policy, the decision is yours as to how you spend that money.
8. Have a Baby
You’ve got a bundle of joy on the way and your bank account is feeling the pressure. Everyone’s situation looks different —adoption, unpaid maternity or paternity leave, hospital stays, IVF—and all can be costly.
For instance, according to U.S. News, “the cost to adopt a child can range between nearly $0 and $50,000, depending on the process you use and country from which you adopt.10
SmartAsset cites data from FAIR Health stating the average cost of birthing a child ranges from $5,000 to $14,500 or more.”11 Verywell Family reported the average amount spent for IVF was $19,234.12
Health insurance may pay some of the costs associated with growing your family, or you may qualify for lower premiums, but if you need cash fast, there are other options. A Cash Value Line of Credit secured by your whole life insurance policy can help you pay for big expenses that come with welcoming a baby into the world. With a Cash Value Line of Credit, you can access your credit line when you need it, for whatever you need, via a checkbook. The Cash Value Line of Credit has an easy application process and no closing fees*.
9. Relocate for a New Job
When you find a new job, you may have to make some big moves. Hiring a moving company and getting settled into a new place can cost a lot of money, and your new employer may not cover the cost.
If you can qualify for a Cash Value Line of Credit, where you borrow money secured by the cash value of your whole life insurance policy and make interest-only payments during the term of the loan, you may be able to borrow the money needed without putting a huge dent in your budget.
The best part? It’s simple to apply, and you can do it all online.
10. Consolidate or Refinance Debt
If you’re like most people, you have a mix of credit cards, mortgages, car loans, and other loans that carry high interest rates and monthly payments. Some may be for personal use or for business.
A Cash Value Line of Credit is a line of credit secured by the cash surrender value of your whole life insurance policy.
You can use the line of credit how you’d like, including consolidating or refinancing existing debt. You will only be required to make monthly interest payments during the term of the loan.
Want more information? Let’s talk…
Valley’s Cash Value Line of Credit is a line of credit secured by the cash surrender value of whole life insurance policy(ies). All Cash Value Lines of Credit are subject to credit approval. Additional terms and conditions apply.
*Florida applicants may be subject to the Florida Documentary Stamp Tax.
©2022 Valley National Bank. Member FDIC. Equal Housing Lender. All rights reserved.
1 Report: 2022 housing market on pace to be hotter than last year – The Washington Post
2 Americans Still Favor Real Estate for Long-Term Investment (gallup.com)
3 Are Cash Offers Better for Sellers? – NerdWallet
4 5 Problems Keeping You From Getting A Small Business Loan – Forbes Advisor</a
5 51% of Americans have less than 3 months worth of emergency savings (cnbc.com)
7 Cash Flow: The Reason 82% of Small Businesses Fail – Preferred CFO
8 2021-sbcs-nonemployer-firms-report (fedsmallbusiness.org)
9 The Average Wedding Cost, According to Real Data (theknot.com)
10 What Adoption Costs – and Strategies to Pay for It | Family Finance | US News