Can Life Insurance Be Used While You're Alive?

Can life insurance be used when you're alive? Well, yes, certain types of life insurance can be used while you're alive, mainly through cash value access and living benefit riders. Some life insurance policies, especially permanent policies like whole life and universal life, build cash value you can access while you're alive through policy loans, withdrawals, or even by surrendering the policy. Many modern policies also include living benefits or accelerated benefit riders that let you tap into a portion of the death benefit if you experience a qualifying chronic, critical, or terminal illness, or if you need long-term care. Using these benefits can reduce the death benefit and may have tax implications, so they need to be managed very carefully.

Three takeaways. Number one, permanent policies can build cash value so you can borrow from, withdraw, or cash out while you're alive. Two, living benefit riders may let you accelerate part of the death benefit for serious illnesses or long-term care needs. Three, using these lifetime benefits reduces the death benefit and can create taxes or even risk policy lapse if overused.

For additional links, you can check out cash value life insurance, policy loans, surrender value, living benefits, accelerated death benefit rider. Thanks for watching.