Question I always thought life insurance was simply something I could leave to others after my death, but I recently learned there may be more to it. Can life insurance help me financially while I’m still alive?
We asked Curtis Corrado, a Farmers Insurance® agent in Centennial, Colorado, to explain how life insurance can benefit you during your lifetime.
Answer There are two main types of life insurance: term and permanent. Term life insurance covers you for a set amount of time — for example 20 years — with level premiums. Permanent life insurance (including products like whole life insurance) stays in force throughout your lifetime.4
Both term and permanent life insurance offer “riders” that could potentially provide payments while you’re alive. (Riders are additional options or benefits that allow you to customize your policy.) For example, you could purchase a chronic illness rider, which may pay a benefit if a covered illness limits your day-to-day abilities. A terminal illness rider could also allow you to access a portion of the policy’s death benefit before you pass if you meet certain conditions. These issues aren’t always pleasant to think about, but you should be aware of your options.
If you choose permanent life insurance, there are several so-called living benefits available to you. In some types of policies, for example, premium payments above the cost of insurance can accumulate as a cash value and grow, generally income tax deferred. You can borrow from this account — again, generally income tax free5 — for personal expenses, whether it’s for a new roof or long-term healthcare. The accumulated cash value can also be used to pay your premium for a period of time. It depends on how you want your policy to work for you.
Your Farmers agent can help you understand your options for how to fund and structure a life insurance policy so it aligns with your goals. A little planning now can go a long way toward a gentle landing in the future.
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