May 13, 2020

What are Living Benefits in Life Insurance?

Life insurance helps your loved ones cover expenses in the event of your passing. Life insurance covers funeral expenses, debt, and other end-of-life expenses. As you can see, life insurance activates once you have died. However, there are some policies that generate benefits while you are still alive called living benefits.

Living benefits are “cash value” that the life insurance policy has built up over time. The cash value can be paid out to you while you are still alive. Upon your death, the life insurance policy activates and the expenses covered with those funds. A living benefit rider is a way to customize your policy to your specific needs that are not normally covered.

Benefits of Living Benefits

There should be no surprise when we say there are benefits when it comes to living benefits. Life insurance policies have their own set of benefits because of their assistance with loved ones. We recommend you choose a life insurance policy that fits your needs. Our agents can help you locate an insurance policy right for you.

Use the cash value of your life insurance to pay for loans, debt, and save for your child’s college.

One of the most common uses of benefits is paying off final amounts of debt or costs. If you are still paying on student loans, then living benefits can help cover the last remaining costs of those. That way, your life insurance funds will not be used to cover your debt.

Another great benefit of living benefits is it can be used for your children’s college savings. It will not be considered in their federal financial aid, which is also a plus. Save this money to apply it to your child’s college expenses.

Finally, you can borrow money against your policy’s cash value. The loan will pass onto your next of kin after your passing, so keep that in mind. You also must continue to pay the loan, or the policy may relapse.

Texas Insurance Agency Can Help

If you are ready to prepare for the end of your life, then contact Texas Insurance Agency today. You can reach our agents by calling (281) 398-1010. You can also see what other types of insurance policies we can provide you on our life insurance page. Let us help you pass on with peace of mind.

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