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6 Famous Brands Started or Saved By Life Insurance

Life insurance has played a key role in either the creation or survival of some of the most iconic American institutions that we all know. If it wasn't for life insurance, many of us would have never experienced the magical world that we all loved and grew up to take our own kids to, a man's personal struggles during the Great Depression would have prevented a major store chain from coming into existence, and the golden arches would have served a few hundred thousand people and gone away, and home chefs might not be getting pampered.

Check out the brands below to learn how life insurance played a key role in either their creation or survival:

1. Disneyland

Walt Disney Studio was founded in 1923 in Los Angeles by Walt Disney and his brother Roy. After starting with the debut of Mickey Mouse in 1928, and progressing into animated features and television programs, by the time the 1950's rolled around Walt became intrigued with creating an amusement park where parents and children could have a good time together. But he wanted it to stand out from the dilapidated places with seedy characters that were around at the time, and instead had a vision for an immaculately clean, family oriented park with imaginative attractions.

After failing in his pursuit of securing financing in the traditional routes to build what would become Disneyland, Walt decided to provide his own financing. A large part of this came to be by borrowing money from his cash value life insurance policy. Disneyland opened in 1955 and hosted more than 3.5 million visitors in it's first year, and became an immediate, resounding success.

Disney is quoted as saying that money was the biggest problem he faced throughout his life, and that was definitely the case with Disneyland. "It takes a lot of money to make these dreams come true. From the very start it was a problem. Getting the money to open Disneyland. About $17 million it took. And we had everything mortgaged, including my personal insurance . . . We did it (Disneyland) in the knowledge that most of the people I talked to thought it would be a financial disaster -- closed and forgotten within the first year."

2. McDonald's

Working as a milkshake machine distributor in 1954, Ray Kroc came into contact with a successful hamburger stand in San Bernardino, California. He approached them with the intent of selling them mor eMultimixers, but instead learned they were interested in a nationwide franchising agent. Kroc, 52 at the time, decided his future was in hamburgers and partnered with the brothers who owned the hamburger stand. He opened his first McDonald's in Des Plaines, Illinois in 1955 and bought the McDonald brothers out in 1961.

Kroc didn't take a salary during his first 8 years, and to overcome constant cash-flow problems he borrowed money from two cash value life insurance policies (and also his bank) to help cover the salaries of key employees. He also used some of the money to create an advertising campaign around emerging mascot Ronald McDonald.

Today, McDonald's serves more than 50 million people each day through more than 30,000 locations in 119 countries.

3. Stanford University

Pacific Mutual Life (now Pacific Life) ceremoniously issued it's first policy to Leland Stanford, the company's first president, in 1868. After his son, Leland Jr., died of Typhoid Fever in 1884 at the age of 15, the former California governor and U.S. senator and his wife, Jane L. Stanford decided that because they could no longer do anything for their own child, that they would use their wealth to do something for other people's children. With a strong belief in the importance of education for men and women to prepare them to be productive and successful, six years of planning led to the establishment of Leland Stanford Jr. University in Palo Alto in 1891 with a class of 555 students (including Herbert Hoover).

After Leland's death in 1893, the fledgling university's financial support became uncertain. Jane even tried unsuccessfully to sell her treasured jewel collection in 1897 to come up with funds. Determined to preserve the university and avoid a "temporary" closure, she used her husband's life insurance policy proceeds to help fund operations and pay faculty, allowing Stanford University to weather a dangerous six-year period of financial hardship.

4. Foster Farms

In 1939, a young couple named Max and Verda Foster borrowed $1,000 against their life insurance policy and started Foster Farms. They invested in an 80-acre farm near Modesto, California and began raising turkeys, and eventually chickens.

By the 1960's, the company had outgrown the original farm and moved it's corporate headquarters to the small California town of Livingston, where it still is today. Now the company is run by their grandson Ron Foster and has more than 10,000 employees, with operations in California, Oregon, Washington, Colorado, Arkansas, and Alabama and has a line of products that are sold globally.

5. The Pampered Chef

In 1980, home economist Doris Christopher borrowed $3,000 from her life insurance policy and started her company The Pampered Chef in her suburban Chicago home. All her time working with homemakers showed her that women needed quality time saving tools designed to help make cooking quick and easy. She had also seen the success of Tupperware's business model and developed her own detailed multi-level marketing business plan. With the money that she borrowed from her life insurance she purchased some basic inventory and was on her way to building a successful company.

By 2002, the company had become a $700 million operation that was acquired by Warren Buffett's Berkshire Hathaway Corporation for $1.5 billion. Today the company has 12 million customers.

6. J.C. Penney

In 1898 James Cash Penney was working for a small chain of dry goods stores when the owners took him under their wing, and offered him a one-third partnership in a new store that they were opening in Wyoming. Penney helped with the opening of two more stores, and when the original partners dissolved their partnership in 1907 Penney bought them out of all three stores. By 1912 he had 34 stores throughout the Rocky Mountain region. In 1913, he moved the company to Salt Lake City and incorporated it as the J.C. Penney company. By 1929, he had 1,400 stores across the country.

During the stock market crash of 1929 and the ensuing Great Depression, his stores and personal wealth were devastated, which took a physical and mental toll on his health. He borrowed against his cash value life insurance policies to help the company meet it's payroll and day-to-day expenses, and this allowed the company to stay afloat and eventually rebound. Today, the company's 1,100 stores take in revenues of $18 billion a year, and they were able to pay their new CEO Ronald Johnson, the former Apple exec who joined the company in 2011 $53.3 million.


What do all of these iconic American companies have in common? They were all started by everyday, hardworking people who had a dream. They had the vision, but they needed the money to help them get started, or sustain it through hard times. Life insurance was the solution. Learn the capabilities and power of life insurance so that you can leverage it's abilities in your life. What's your dream?

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