Posted on December 7th, 2024

Story by Verbz Bermudez

Life insurance is traditionally seen as a safety net for loved ones after death, but policies with living benefits can help you while you’re still alive. These features, available on many permanent life insurance products, let you access a portion of your policy’s death benefit or cash value for immediate needs.

What Are Living Benefits?
Living benefits are provisions that allow policyholders to use their life insurance for more than just final expenses. In fact, 44% of life insurance owners purchase it to help with income or expenses during their lifetime, according to LIMRA. While a policy’s main purpose is to provide a tax-free death benefit, living benefits offer critical financial support during emergencies.

Many Indexed Universal Life (IUL) policies include living benefits, making them a popular choice for permanent coverage. Here’s how these benefits can work for you:

Accessing Death Benefits While Living
Living benefits are often provided through accelerated benefit riders, which allow you to access part or all of your death benefit if you face:

1. Terminal Illness – A diagnosis of a condition likely to result in death within a set period.


2. Critical Illness – Conditions like cancer or heart issues that meet the insurer’s criteria.


3. Chronic Illness – Inability to perform daily activities like bathing or eating, certified by a doctor.



These funds can be used for anything, including household expenses, medical care, or even a dream vacation. You can request a full payout or retain part of the benefit for your beneficiaries.

Using Cash Value
An IUL policy’s cash value grows tax-deferred and can be tapped into for routine needs:

Financial emergencies

Reducing premiums

Supplemental income


You can access this cash value through loans or withdrawals:

Loans: Borrow against your policy’s cash value, typically after a year. Interest applies, so timely repayment is crucial to maintain coverage.

Withdrawals: Take a portion of the funded cash value without repayment, though this reduces your death benefit and may increase premiums.


Considerations Before Accessing Benefits
Living benefits are not the same as surrendering your policy. Always consult a financial professional to understand the impact on your policy and potential tax implications.

A Versatile Financial Tool
With both death benefit protection and the ability to grow cash value, IUL policies with living benefits provide a safety net for life’s uncertainties. They’re a smart addition to long-term financial plans, offering peace of mind whether you’re preparing for the unexpected or planning for the future.

Learn more about the complete living benefits visit https://vandjlife.com or shoot an email to [email protected]. Need to chat? Call or text (832) 885-2067. We’re open Mondays through Thursdays, 8AM to 5PM, and Fridays 8AM to 12NN (PST).