A majority of people understand that life insurance benefits include a financial reward when you pass away. In reality, it also has benefits when you are alive.
When you purchase life insurance, you can build a cash value that accumulates throughout your lifetime. It is known as a living benefit of the life insurance policy. So, while you will receive a death benefit, you can also use the money during your lifetime.
So, you may want to know where the “cash value” originates? Generally, the premium for cash-value life insurance is pricier than term life insurance premiums as it is a long-term coverage and builds up cash value for a lifetime.
The living benefits of life insurance include:
A permanent life insurance policy provides a tax-deferred cash value growth.
If you need money during your lifetime, you can borrow a loan against your policy’s cash value. You can use it for education payments, emergency expenditures, or as an alternative to your retirement income. As it is a loan, and you need to repay. If you cannot return, the insurance company deducts the actual loan amount and outstanding tax from your death benefit.
- Education Saving
If you want to save money for your children’s higher education, you can use life insurance cash value.