Q. If I’m the policy owner, how does my farm or ranch benefit from the captive banking concept?

A. You can use your insurance contract to finance any of your farm or ranch needs while accumulating additional cash in the process and do it on a tax-advantaged basis. The key is to create a personal financing pool that you control and then loan money to your business which it then repays back to you with interest. Also, consider that agricultural lenders can and are becoming very “particular and demanding” in this economic climate. It is also a great satisfaction for a farm or ranch owner to know that they have a team of “hired help” at their disposal while utilizing these methods. To reiterate, you as the policy owner have given your business a tax favored and readily available lending source that is completely independent of the traditional sources. And, as time passes, the system gets even better by becoming more and more efficient, representing more control and wealth for you.

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