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Providing an Emergency Lifeline for Business Challenges: a Northwestern Mutual Client Success Story
MILWAUKEE, February 20, 2013 /PRNewswire/ — Permanent life insurance provides protection for the people that matter most in life, but its guaranteed cash value growth and access make permanent life insurance one of the most valuable assets available to a small business owner.
Take the case of inventor and entrepreneur John Sheaffer of Geneva, IL.
John’s prized invention — the MARS aeration system — is a patented product that provides clean water to developments in a cost-efficient and environmentally sustainable way.
When business at John’s consulting engineering firm, Sheaffer & Roland, slowed in the early days of the financial crisis, John made major changes to the company’s focus and business model. John is a business owner who likes to plan ahead, and thanks to this approach, his company actually thrived even in the worst years of the recession.
Then, in 2010, John faced a problem that threatened to undo his years of hard work and strategic planning.
Or, as he puts it, “Disaster struck.”
John received a phone call informing him that the firm’s largest client, responsible for fifty percent of its business, had decided to breach their contract. “Literally overnight, we had lost half of our strength,” John remarked.
At that moment, it was unclear whether Sheaffer & Roland would survive.
John quickly realized that Sheaffer & Roland would need a substantial amount of capital to survive. But, as he puts it, “Imagine going to a bank and asking them to float you enough money to keep your business operating for six months after your biggest client walked out the door. That would never happen.”
After hearing the news, one of the first calls John made —right after his lawyer and his wife—was to his Northwestern Mutual financial representative. It was a call that proved to be the lifeline that helped keep his business afloat while he addressed the bigger challenges at hand.
Following the advice of his Northwestern Mutual financial representative, he tapped into the cash value of his permanent life insurance policy — which provided John a flexible asset to guide him through his period of uncertainty.
Looking back now, John says, “Being able to access my funds immediately meant I was able to put money into the company and keep us afloat until the client in question ultimately returned and not only that, extended their contract.”
Thanks to funds made available to him through his Northwestern Mutual permanent life insurance policy, John’s business survived for the six months it took to get the client back. When the client returned, Sheaffer & Roland received a five-year contract extension as an apology. Recently, the client extended the contract again, for another five years.
Today, John is happy that he planned ahead and took steps to ensure his financial security, no matter what life brings. “I didn’t anticipate this type of sudden and significant economic hit, and the experience has really underscored for me the importance of planning for success by being prepared to protect myself and my business from risks along the way.”
It’s hard to know what’s going to happen down the road, making it all the more important to plan ahead. Northwestern Mutual recognizes and applauds stories like John’s as an example of the foresight and commitment necessary to build a successful business.
About the Client Stories Series
John’s story is part of Northwestern Mutual’s Client Stories series, which aims to share the inspiring, first-hand accounts of clients that have faced seemingly overwhelming obstacles.
To learn more about how John protects his financial security, watch his story at Northwestern Mutual’s Facebook page.
About Northwestern Mutual
The Northwestern Mutual Life Insurance Company — Milwaukee, WI (Northwestern Mutual) — among the "World’s Most Admired" life insurance companies in 2012 according to FORTUNE® magazine — has helped clients achieve financial security for more than 155 years. As a mutual company with $1.3 trillion of life insurance protection in force, Northwestern Mutual has no shareholders. The company focuses solely and directly on its clients and seeks to deliver consistent and dependable value to them over time. Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company; and Russell Investments.