Three Types of Living Benefits for Life Insurance
You may have good knowledge of the advantages of life insurance, such as how it can protect your loved ones financially in the event that you die away. However, did you know that life insurance can offer advantages even while you’re still alive?
At Panichelle Insurance, we can help you understand some of the advantages of life insurance.
What Does it Mean to Have Living Benefits for Life Insurance?
The owner of the life insurance policy has the option to accumulate high cash worth over the course of their lifetime through their life insurance policy. This is referred to as a living benefit of life insurance because, unlike a death benefit, which is paid off after your death, you can spend the funds now.
What Does Life Insurance Cash Value Mean?
Where does this “monetary value” originate, then? With a cash-value life insurance policy with Panichelle Insurance, you can accumulate cash value. Cash-value life insurance provides long-term coverage, as opposed to covering for a set period of time like term life insurance, and builds cash value over time. The premiums of life insurance cash value are often more expensive than those for term life insurance.
What are the Three Types of Living Benefits for Life Insurance?
Tax-Deferred Expansion: The cash value of a permanent life insurance coverage increases tax-free.
Loans: For things like tuition payments, unexpected expenses, and even to supplement your retirement income, you can borrow money from the cash value of your insurance policy. Remember that this is still a loan, and if it is not repaid before your death, your death benefit will be reduced by the principal amount of the loan plus any accrued interest. Additionally, the policy may expire if loan interest is not paid.
Savings for College: If you have children who will eventually attend college, you may be able to use the cash value of your life insurance policy to help pay for their education. Government financial aid calculations do not currently take this into account when giving financial aid to college students
If you would like to know more about the three types of living benefits for life insurance, contact Panichelle Insurance today.
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