John Sheaffer's company survived the economic downturn in 2008, only to have a near disaster hit in 2010. Sheaffer is president of Sheaffer & Roland Inc., a consulting and engineering firm. His biggest client, one that represented half of his company's income, breached its contract with Sheaffer & Roland without cause. Sheaffer remembers, “Overnight we'd lost half our strength.”

Sheaffer's wife Suzie can still think back to the moment her husband got the call telling him what had happened, “It was sudden. It was surprising. It was scary. We never thought that anything like this would happen to us.”

Sheaffer called his lawyer to begin digging into the situation. He also called his Northwestern Mutual representative. Sheaffer remembers asking, “What do I have and how soon can I get it?” Sheaffer was confident his company would be vindicated, but he knew that would take time and he needed a creative way to keep his company afloat in the interim.

He says, “I was able to utilize my Northwestern Mutual (life insurance) policy in a way that I never anticipated, but it absolutely saved my business.”

Suzie Sheaffer recalls, “I would've never thought to borrow against a life insurance policy. I don't think I even knew you could do that.”

Sheaffer says he knows he wouldn't have gotten the same response had he tried to get a typical bank loan at the time, and he says there's no question about it…without the money, he would've gone under. “I didn't anticipate having to take the money out during an economic hit, but thank God it was there for me to be able to do that.”

CAUTION: Loans taken against a life insurance policy can have adverse effects if not managed properly. Policy loans and automatic premium loans, including any accrued interest, must be repaid in cash or from policy values upon surrender, lapse or the death of the insured. Repayment of loans from policy values upon surrender or lapse can trigger a potentially significant tax liability and there may be little or no cash value remaining in the policy to pay the tax. The policy will lapse if loans become equal to the cash value while the policy is in force and additional cash payments are not made.