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8 Things You Didn’t Know Life Insurance Could Do

8 Things You Didn’t Know Life Insurance Could Do
A life insurance policy compensates your dependents or the policy beneficiaries once you die, provided that the premiums have been paid consistently, and there hasn’t been any misrepresentation when making the application. This shows that life insurance is pretty a straightforward policy. However, what you may not know is that life insurance can be used as an advanced, sophisticated financial planning tool. Here are 8 things you might not have known your life insurance policy could do.

1. You can take cash value loans

Sometimes you may be in need of cash, for instance, to pay for taxes, college savings, supplement retirement, or fund medical treatment. In this case, you may consider taking a loan out of life insurance cash values. A cash value loan is a tax-free product because it is not considered again.

2. Might access some benefits if terminally ill

In the event that you suffer a terminal illness, there is a possibility that you could access some part of the death benefits in your policy before you die. This is so if you have accelerated benefits rider, which is sometimes known as terminal illness rider. You can use that money to defray some medical costs you have incurred.

3. You can have decreasing death or premium benefits

When you have a term life insurance policy, it will offer death benefits for some limited period. It is mostly used to pay the debt, such as a large mortgage because it can be chosen for a specific number of years during, which a debt will remain outstanding. However, that’s not all; these loans can even be more flexible. You could design them in a way that the death benefit decreases with time, or you have it designed to feature decreasing premiums.

4. Could offer accidental death coverage

Your life insurance may have a rider that features accidental death policy or what is known as double indemnity. In the event that your death occurs due to an accident, the beneficiaries could be paid double or trip the amount of the policy.

5. You can have additional rider for specific reasons at specified times

When your situation as a life insurance policy buyer changes, for example, you were single and now you are married, you may use a guaranteed insurability rider to have additional insurance after some time as stated without going through the strict health underwriting process.

6. A return of premium rider can protect loss of coverage

Sometimes, the concepts of term life insurance policy may indicate that the coverage could have no cash value after certain years. Although you can renew the term life insurance to a certain age, you may want to avoid a loss by seeking for a conversion rider, which can allow you to convert your insurance to whole life insurance.

7. Can have a choice of variable riders

There are different riders that may be available to you in the life insurance especially whole life insurance. You can take advantage of these riders to cover a specific situation.

8. A life insurance can grow your 401k

Life insurance provides safety; you might want to take some aggressive allocation of 401k investments. You can let your 401k grow longer by tapping into the cash value of your life insurance policy in the first few years of retirement.

These are things you might not have known they are provided by your life insurance. You can learn more about the various riders by talking to an insurance company or agent. You can set your life insurance in many ways depending on your coverage needs and situations.

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