7 Things You Didn’t Know Life Insurance Could Do

You may not give your life insurance policy much thought beyond paying the premium each month. However, policies can do more than offer a payout to your beneficiaries. Many plans have a number of options and policy perks that the insured don’t utilize. Here’s a look at seven things you may not realize your life insurance policy can do.

Long-term care

For most insurance providers, there is typically an option to combine life and long-term care insurance. You may be able to add a rider to a life insurance policy or add a specialty policy – either way, long-term care benefits usually reduce the amount of death benefits. It is more costly to add long-term care coverage to your policy, but compared to the cost of live-in or facility care, the premium will place you ahead financially.

Terminally ill

Many term and whole life policies offer living benefits. While each policy is different, most coverage plans allow the insured to receive a portion of the death benefits in advance if they have less than a year to live.

Disabled

Many policies offer chronic illness or critical illness riders that can be utilized if the policyholder becomes disabled or suffers a life-changing health event, like a heart attack or invasive cancer. If you become disabled, this source of cash can help cover ongoing medical costs and monthly bills while you’re out of work.

Charity

If you have an organization or charity to which you regularly give, you can use your life insurance policy as a last charitable gift. Even those without beneficiaries can benefit from life insurance by holding a policy with a low monthly premium to leave a large gift to a beloved organization.

Insure a child

Parents don’t necessarily have to purchase a separate policy for their children. Many plans allow for a rider specifically for a child. Child protection riders can be obtained at a low cost and often have flexible coverage options.

College costs

A grossly underused benefit of whole life insurance is the ability to take out loans on the policy for college tuition payments. Most policies offer guaranteed loan rates, which are nearly always better than student loan interest rates. Plus, the interest paid goes back into the policy rather than to a bank or the government.

Waive premiums

A number of policies offer premium waiver riders. In the event the insured becomes disabled, the provisions allow the policy holder to keep their coverage. The rider removes premiums for those suffering from certain illnesses or injuries. The premium waiver is seldom used as policyholders rarely think of its value in their time of need. Each company is different, so talk with your life insurance agent about whether this benefit is standard with your policy.

When you purchase life insurance, dig deeper than just the death benefits total. Investigate other benefits and options that come with each policy you consider. Once you make your decision, explain the different policy possibilities with your family so they know what options are available should you become disabled or unable to care for yourself.