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4 Ways Your Life Insurance Policy Can Benefit You While You're Living

Updated: May 31, 2022

You’ve shopped around for whole life insurance and have found a policy that yields the best benefits for your family from funeral preparations to aiding in supporting them for years to come. However, you may not be aware that there are some ways you can reap the benefits of your life insurance policy during your life as well.

You don’t have to simply consider end-of-life benefits regarding your life insurance policy. Here are four ways you can utilize the quality advantages of your life insurance policy during your lifetime to benefit your family and help you prepare for the next stage in your life.

1. Minimize Taxes in Your Retirement

A whole life insurance plan can be used as a tax-free form of cash flow during retirement. Policyholders can utilize their life insurance similar to a personal pension and make withdrawals tax-free while in retirement. In this way, your life insurance policy operates like a retirement savings account in which you can use it to generate cash flow during retirement.

2. Use to Fund Your Child’s College Tuition

Your whole life insurance policy could benefit your future generations sooner than you think. Potentially, your life insurance policy could yield better rates when taking out a loan for your child’s (or your own) education than an actual student loan. And when it comes to paying back the interest, the money goes right back into your policy.

Additionally, your life insurance can also cover your student loans should any debt exist when it goes into your estate. Should your estate contain any student loan debt, your life insurance coverage can cover the tax placed upon your debt.

3. Explore Living Benefits

When the least expected occurs, your life insurance policy can function as additional cash flow support through living benefits. Living benefits can be used as a portion of the death benefit to be used in certain situations. This way, the death benefit is not entirely used during your life but policyholders can still rely on the added financial support of life insurance benefits during your life.

Living benefits can provide financial assistance in the form of chronic illness benefits in which you can receive aid in various activities including dressing and eating. Terminal illness benefits are also available through your life insurance policy for those who have been certified by a physician. Those needing financial support for medical care during their life expectancy that is shorter than 12 months can use their life insurance policy for living benefits.

4. Sell It Should You Outlive Your Policy

Believe it or not, outliving your life insurance policy is a possibility. If this should be the case for you, when your policy term ends (and if you have never made a claim), your insurance company could return the premiums you have made towards your policy (if you have whole life insurance - of course, you always want to check on the specifics of your individual policy). Once received, you have the ability to use them as you see fit, including investing the funds or saving them.

Outliving your life insurance could be considered one of the more unexpected benefits of your policy. Policyholders have the option of continuing coverage, receiving the funds in a tax-free savings account or taking out loans against it. Depending on your financial needs when your term ends, the opportunity to receive a payout from your life insurance policy is another way to benefit from your policy during your life.

For more information, feel free to contact me.


The information contained in these articles are for general information purposes only. Nicole Marques assumes no responsibility for errors or omissions in the contents of the Service. In no event shall Nicole Marques be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the information provided in this article. Nicole Marques reserves the right to make additions, deletions, or modifications to the contents on the Service at any time without prior notice. The information provided above is for general information only. It is not to be relied upon as providing legal or tax advice. You are encouraged to consult with a professional tax and/or legal advisor and/or financial advisor about your particular circumstances.

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