5 surprising benefits of life insurance
You prioritize your family’s financial well-being, so you’ve secured life insurance to ensure their future is protected. However, the benefits of a life insurance policy can extend beyond this primary purpose. In fact, you might be able to take advantage of your plan right now. Discover five lesser-known benefits of life insurance below.
1. Providing Disability Income
At some point in our careers, we may face temporary inability to work. Fortunately, your life insurance plan can offer support in such situations. By adding a rider to certain policies, you can receive a monthly stipend if you’re unable to work. These riders can sometimes replace long-term disability coverage and may include a payment waiver until your disability ends. This helps prevent the policy from lapsing, allowing you to resume payments once you’re back to work.
2. Paying for Long-Term Care
Similar to disability coverage, your life insurance can help cover long-term care expenses. This benefit is typically added through a rider and may also cover costs for home health aides. Planning for such possibilities can be a smart financial move and provide reassurance to your family.
3. Providing Living Benefits
If you have a term or permanent life insurance policy, you might be able to use a portion of the death benefit as a living benefit. This allows terminally ill individuals to receive part of their payout while still alive, often used to cover significant medical bills.
4. Retirement Income
You might be surprised to learn that a life insurance policy can supplement your retirement income. With permanent life insurance, you can borrow or withdraw against the policy. Most permanent policies accrue “cash value” over time, which can be used as an additional source of retirement income or to cover unexpected expenses. However, if the death benefit is needed before the loan is repaid, your beneficiaries will receive a reduced amount.
5. Making a Charitable Donation
Life insurance can also support philanthropy. Instead of leaving money in your bank account for a charity in your will, you can use those funds to purchase a permanent life insurance policy, potentially enabling a larger donation.
