The benefits of life insurance can be broken down into two categories: death and living benefits. Most people are familiar with the death benefits that are activated after the passing of an individual with the proper coverage. Although these posthumous benefits are the primary motivation behind the purchase of life insurance, there are many living benefits that come with these policies as well. Unfortunately, some people never take full advantage of their life insurance policies while they’re alive due to a lack of understanding. So, let’s explore some of the key living benefits offered through life insurance policies. 

Your Policy Continues to Grow with Tax Exemption 

Permanent life insurance policies (also known as whole life insurance policies) cover an entire life span and have a guaranteed annual growth rate. This increase in value is guided by a predetermined amount that will never decrease. In literal terms, your policy’s value is increasing each year to gradually match the death benefit amount that’s set in the contract. What’s even more reassuring is that this growth isn’t hindered by economic instability or the number of claims handled by the company. Each time your policy grows, you become more financially secure.

Use It as Collateral for Loans 

Collateral plays a central role in any size loan. Lenders will place a clause in the contract giving them permission to take something of yours if you default on payments. Having a higher value of combined assets makes you eligible for larger loans for buying property, a new vehicle, or other major purchases. With a life insurance policy, you have a major boost in the worth of your overall assets and a specific asset on which loans can be taken out. The death benefit and cash value of the policy are the exact portions of the policy factored into a loan, so make sure you read the fine print of your policy to see if these rates are guaranteed and at what amount. 

Increase Your College Savings 

With college prices reaching an all-time high, it’s no secret that parents are stressing about this financial burden. What many people fail to realize is that a robust life insurance policy can actually help increase college savings. These policies are unique in that the government doesn’t take their cash value into account when determining a family’s eligibility for federal college aid. Life insurance policies are one investment that will provide more financial stability without hindering your child’s opportunity to receive a federal grant. 

Try to Qualify for Lower Premiums 

Life insurance providers often require a blood test from customers before offering a quote. This is the best method that companies have devised for determining your overall health and the estimated cost of offering you coverage. In the blood test, the provider will be looking for high cholesterol and glucose levels, high blood pressure, high BMI, and indications of drug, tobacco, or nicotine use. The healthier you are, the higher the chance you have of qualifying for lower premiums. If you’re not in the best shape, make a note to cut out bad habits, start an exercise routine, and eat healthy for at least a few months before taking the blood test. 

Life insurance isn’t just an investment for protecting your family in the event of sudden and unforeseen death. These policies also have several living benefits that many people are unaware of. If you’re already paying for an investment, take a closer look at your policy to see what kind of advantages are lying dormant.

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