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How to Use Life Insurance While Alive

How to Use Life Insurance While Alive

Have you ever heard that life insurance is only for the dead? If so, let us tell you about how to use life insurance while alive and kicking! Life insurance policies enable you to get even more out of your coverage than most people realize. You can use it as a tool to help secure your financial future by tapping into the living benefits it offers. 

We will discuss the different types of life insurance policies, along with their respective opportunities that give you access to unique ways to receive cash value during your lifetime. So no matter where you are in life, having access to the right policy can unlock a world of possibilities!

Definition of Life Insurance

Life insurance is a contract between an insured (the policyholder) and an insurer (the company). The policyholder pays premiums to the insurer in exchange for death benefit protection in case of their untimely passing. 

This death benefit will be paid out to the beneficiaries, or people designated by the policyholder, upon their death.

Definition of Life Insurance: Protecting your family

Overview of how to use life insurance while alive

Life insurance isn’t just something you purchase and forget about until after you’ve passed. There are ways to reap the rewards of the policy you purchased while still alive! Life insurance can be used as collateral for a loan, so if you need access to funds, life insurance might be just your ticket. 

You can also use it as an income replacement in the event of critical illness or disability, and even invest money into a life insurance policy with a cash value that grows over time. That’s right – life insurance is no longer just another thing to check off your ‘after-I’m-gone’ list; it can help keep you afloat during difficult times.

Benefits of Using Life Insurance While Alive

One of the benefits of using insurance while alive: pay off debts

Life insurance is not just a tool to provide financial security for your family after you are gone, but also provides a number of benefits while you are still alive. 

Among these are the opportunity to generate tax-deferred growth and leverage portions of the coverage to finance large purchases and access the cash value to cover expenses or even pay off debts. Not only can life insurance policies help with these things, but they can also contribute back into our lives in a meaningful way.

Financial security for yourself and your family:

Life insurance policies provide the assurance that your loved ones will be financially secure in the event of your passing. You can customize a policy to ensure that your family is taken care of, with options such as life insurance riders, accelerated death benefits, and other living benefits.
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Tax-deferred growth opportunities:

By investing money into a life insurance policy with cash value, you can leverage the power of tax-deferred growth over time. This allows you to grow your funds without worrying about taxation until you are ready to withdraw from the account.

Leverage to finance large purchases:

Another great use for life insurance is leveraging portions of the coverage to purchase large items such as cars or homes. This allows you to access the funds without having to use all of the cash value, and in some cases even get more favorable loan terms than you would from a bank or other lender.

Access to cash value to cover expenses or pay off debts:

Life insurance policies also provide added flexibility by giving you access to the cash value stored in your policy. You can use this money as needed for life’s unexpected events, allowing you greater financial freedom and peace of mind. This is especially beneficial if you need help paying off large debts or covering emergency expenses.

Types of Life Insurance Policies That Allow You To Use Your Policy During Your Lifetime

There are different types of life insurance policies that not only offer death benefits, but also allow you to use the policy during your lifetime – whole life insurance, universal life insurance, and variable universal life insurance. 

In this section, we will explore each of these options in greater detail and see how they can help you meet both short-term financial goals and longer-term retirement goals.

Security

Whole life insurance policy:

Whole life insurance policies provide a death benefit as well as lifelong coverage. They also accumulate cash value over time, allowing you access to the funds at any point in your life for whatever you might need. The premiums are fixed and the policy accumulates guaranteed dividends and interest on a tax-deferred basis.

Universal life insurance policy:

Universal life insurance policies are similar to whole-life policies but offer more flexibility with regard to premium payments and death benefit amounts. You can adjust these factors as needed, making this type of policy ideal if you have to change needs or income levels throughout your lifetime. As with whole life, universal life also accumulates cash value which can be accessed when desired.

Variable universal life insurance policy:

Variable universal life insurance policies are similar to universal life policies in the sense that they provide lifelong coverage and flexibility with regard to death benefit amounts and premiums. However, variable universal life policies also offer the added benefit of allowing you to invest some or all of your cash value into different investment accounts. This allows you to reap greater rewards from higher-risk investments, allowing for more aggressive growth potential than with other types of insurance.


This type of policy should be used with caution however as it is possible to lose money if the investments do not perform well. It is important to consult a financial professional before investing in this type of policy.

How To Get Started With a Life Insurance Policy That Allows You To Use It While Alive

Planning for your future—especially planning for the future of your family and loved ones—is an important task. To make sure that you and your family are taken care of in the event of an unexpected life change, a life insurance policy is a wise investment. 

Getting started with life insurance can be overwhelming, but there are some steps you can take to make the process easier.

Easy process
Researching different providers, requesting quotes and comparing policies, determining the amount of coverage you need, considering additional riders or features, and selecting a policy that meets your needs can help ensure that the right plan is chosen for you.

Research different life insurance providers

Researching different life insurance providers is the first step to finding the right policy for you. Take some time to research and compare various life insurance companies in order to find out which one best meets your needs. Compare things like premiums, coverage amounts, additional features or riders available, customer service ratings, and the financial stability of the company.

Get quotes and compare policies

Once you have narrowed down your choices, it’s time to request quotes from each provider in order to make an informed decision about selecting a policy that fits your budget and needs. 

Make sure to read over each quote carefully so that you can compare apples to apples when deciding on the best policy for you.

Get a quote

Determine the amount of coverage you need

Determining the amount of coverage you need will depend on your personal circumstances and financial goals. Consider income replacement, debt repayment, funeral costs, childcare costs, long-term care expenses, and any other financial obligations you may have for yourself or your family.

Consider additional riders or features

You may also want to consider additional riders or features that can be added to your policy in order to provide extra protection for you and your loved ones. 

Some common riders include accelerated death benefit riders which allow for early access to the death benefit if you are diagnosed with a terminal illness, waiver of premium riders which will waive future premiums if you become disabled or unable to work, and return of premium riders which will refund some of the premiums paid out over the life of the policy.

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Select a policy that meets your needs

Once all of these factors are considered, it’s time to select a policy that meets your needs. Make sure you understand all of the details of the policy, including premiums, coverage amounts, and any riders or features included in the plan. Read over all documents and make sure you ask questions if there is something you do not understand. Lastly, make sure to review any medical exams or other paperwork required before signing on the dotted line. Taking these steps will ensure that you have chosen the best life insurance policy for you and your family’s future.

Wrap Up

In conclusion, life insurance is an essential component of financial planning. Not only does it provide peace of mind and security for yourself and your loved ones if something were to happen, but it can also be used while you are alive. Taking advantage of the various features like accelerated death benefits, riders, and policy loans can help maximize the benefits of your policy both currently and in the future.


So don’t wait – start researching different providers today and get a policy that is tailored to meet your needs. With careful consideration, research, and comparison shopping you can ensure that life insurance works for both you and your family. Take the first step towards financial security now!

Resources

If you would like more information about life insurance and the options available to you, please visit the following resources:
• Life Insurance 101 – Learn About Life Insurance
• Types of Life Insurance Policies & Riders
• Understanding Term vs. Whole Life Insurance
• What is a Living Benefits Rider?
• How to Shop for Life Insurance
• The Financial Benefits of Disability Income Insurance
• Buyer’s Guide to Long-Term Care Insurance

FAQ

Most frequent questions and answers
Life insurance eligibility depends on the provider and type of policy you are looking to purchase. Generally, most individuals aged 18-70 who meet medical underwriting requirements will be eligible to apply for a policy.
The amount of coverage you should get will depend on your personal circumstances and financial goals. Consider income replacement, debt repayment, funeral costs, childcare costs, long-term care expenses, and any other financial obligations you may have for yourself or your family when making this decision. It’s also important to take into account any existing assets that would help cover any remaining expenses if something were to happen in order to avoid being over-insured.
If your health changes significantly after purchasing a life insurance policy, you may be able to adjust your coverage amount or add riders for additional benefits. However, most providers will require supplemental medical information and an updated underwriting process before any changes can be made to the policy.
Most life insurance policies are transferable between states, but you should check with your provider before making a move to ensure that there won’t be any disruption of service due to state regulations or taxes. It’s also important to make sure that your policy remains in effect after the move is complete.
The time it takes for a life insurance policy to become effective depends on several factors, including the type of policy you purchase and the medical underwriting process. Generally, policies can be issued within seven business days once the required paperwork is completed and accepted by the provider. However, if additional health information or lab tests are needed it could take up to thirty days or more before your policy is approved.
Life insurance policies come with a variety of features that can help customize your coverage depending on your needs and financial goals. Common features include accelerated death benefits, riders, policy loans, cash value accumulation, and more. Research different providers to see what options they offer and compare them to find the best one for you.
Ask us. Ask American Assurance

Take control of your financial future today and protect the ones you love with life insurance from American Assurance USA. From answering questions about eligibility to helping you compare policies, our knowledgeable and helpful team of experts can help find the best solution for you and your family’s needs. 

Reach out now to get started or visit our website for more information and a free quote. Don’t wait—take advantage of the many benefits that life insurance has to offer and contact American Assurance USA today!

Protect yourself and your loved ones with peace of mind by investing in life insurance with American Assurance USA. Get started now!

Call American Assurance USA today to get the life insurance coverage you and your family deserve! Visit our website for more information and a free quote. Don’t wait—protect yourself and your loved ones now with life insurance from American Assurance USA!

Resources

Investopedia: What is a Fixed Annuity?

Forbes: Fixed Annuity Details

U.S News & World Report: How Does a Fixed Annuity Work?

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