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Writer's pictureStephen Gardner

Money not up in smoke

I love when I come across a story of someone who used their cash value life insurance plan to start, stabilize or grow their business. Of course you hear the stories of Walt Disney borrowing against his life insurance contract to get Disneyland started. You hear about the folks at Tyson chicken that used their life insurance to start their business. You’ve probably even heard about Ray Krok of McDonald's and how he used money from his insurance contracts to fund the advertising campaign of Ronald McDonald.


Recently, I came across a success story that I had not heard before. The story of how Finck Cigar Company got started. Henry William Finck worked for a cigar making company in the New Orleans area. He was a hard worker and eventually rose to manage the cigar warehouse, but he wanted more for himself and his future.


In 1893, Henry moved to San Antonio, Texas and decided to start his own cigar company. The hard part wasn’t learning a new skill or how to manage a cigar business, he had learned all that. The hard part was getting a loan or access to capital so he could get his business started. Access to capital as a new company or a company that needs a burst of cash it difficult and sometimes impossible. J.C. Penny saved his business during the great depression using his life insurance money because banks weren't lending at that time. In fact, thousands of banks went under. Only life insurance companies had funds to lend and continued to grow client money.


Luckily, Henry had been saving money, like most folks did before the invention of the 401k, in his cash value life insurance plan. He borrowed $1000 to start the Finck Cigar Company. That may not seem like a lot of money to us today but this was back in the 1800’s. Accounting for inflation, that would be equivalent to borrowing $26,421.81 in today’s money to start his business.



The Finck Cigar Company is celebrating 125 years in business this year. They are still family owned and employ many folks in their town.


There is so much opportunity that comes from having access to the liquid cash value in your properly designed life insurance contract. I know a Dentist that uses his funds to purchase and lease his dental equipment. I know clients that buy and flip real estate out of their contract to avoid high interest hard money loans. I know people that do hard money lending out of their insurance money. I also have a client that plans to use his contract funds to finance his tow trucks in the near future. I also know people that aren’t business owners that plan to recover the money they spend on car purchases.


Imagine being able to recover the money you spend on major purchases and funnel it back into your tax-free retirement account. Imagine being able to borrow money and set your own pay back schedule, miss or be late on payments or not pay back at all. This is the flexibility and power of an insurance contract.


I’m sure there are countless stories of people thinking up a brilliant idea or coming across great opportunities, only to find that they can’t use the money locked up in their 401k. With a properly designed insurance policy, you can build cash value quicker, legally avoid taxes and use your money through policy loans to make your money work smarter for you.

I’m sure Henry Finck would be proud of the way his family runs his business today and I’m sure his family is grateful that Henry borrowed from his life insurance money to start the family business.


To learn more about how to use life insurance for the living benefits, click on the work with me tab and schedule a time for us to review your personal situation and show you how a plan could benefit you.

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