PALIG Perspective: Surprising Benefits of Life Insurance (for the Living!)

Yes, many people buy life insurance to provide for their loved ones after their death. That’s a terrific reason to own life insurance, but it’s not the only one.

You may be surprised to learn that death benefits are just one aspect of permanent life insurance, which includes whole and universal life policies.

Get familiar with life insurance’s lesser‑known benefits—the ones you can leverage to make life better in the here and now!

1. It’s a Powerful Cash Access Vehicle

A major advantage of permanent life insurance is that it accumulates cash access over time, automatically.

That’s because, with permanent life insurance, a portion of every premium payment is deposited into a cash account that’s attached to your policy. This is called your policy’s cash value. With every premium payment, the cash value grows—and those funds are yours to use over your lifetime however you like.

2. You’ll Earn Interest on Your Cash Value

One reason cash value accumulates so effectively is because you’ll earn regular interest on those funds, which really adds up over time.

How much interest? That depends on the policy.

With whole life insurance, cash value grows at a fixed interest rate, so it’s guaranteed. With indexed universal life (IUL), interest rates are often linked to the performance of a specific stock market index.

3. You’ll Enjoy Major Tax Benefits

Permanent life insurance offers many tax advantages you won’t find with many investment vehicles, specifically:

The cash value growth within your life insurance policy is tax‑deferred, so you don’t pay taxes on your gains as long as the funds stay within the policy. (This helps your cash value grow faster.)
Policy loans are generally tax‑free, because you’re essentially borrowing your own money.
Death benefits are generally income tax‑free for beneficiaries, so they won’t need to pay taxes either.

4. You May Take Some Death Benefits Early—If You’re Sick

Many permanent life insurance policies offer an option called accelerated benefits riders. These riders allow policyholders access a portion of their death benefit while they’re still alive, provided they meet certain criteria, usually a terminal or critical illness diagnosis.

Policyholders can use these funds however they choose, whether to pay medical bills, finance long‑term care costs or cover their family’s living expenses. This frees policyholders and their families to focus on what matters—other than their financial obligations—providing peace of mind during a difficult time.

5. You Can Take a Loan…from Yourself

One way to use your cash value is to take out a loan against it. It’s an easy process, and there’s no credit check, so it doesn’t affect your credit rating. Plus, cash value loans typically have lower interest rates than traditional bank loans—and you’re only paying back yourself.

That means that you can earmark your cash value as an emergency fund or to save for large purchases, like a mortgage down payment or college tuition.

Another plus: usually, taking a loan won’t decrease your death benefit, so your life insurance remains intact as long, provided you repay it. (You can also access your cash value by withdrawing it permanently or even surrendering your policy, but then you’ll lose some or all of your life insurance protection.)

Takeaway: Life Insurance is for the Living!

Yes, permanent life insurance is a great way to ensure financial security for your loved ones, whether funding their future or covering final bills and expenses.

But it’s also a valuable, versatile financial asset you can use to your advantage throughout your lifetime—and this is just the tip of the iceberg.

If you’re considering life insurance, you’ll want to insist on a policy that’s tailored to your specific situation, goals and budget. That’s where a professional insurance advisor can help. At Pan‑American Life Insurance Group (PALIG), we have offered quality life insurance solutions for more than 113 years—and our advisors are among the best in the business.

To learn more about solutions available to you,

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This article has been prepared for informational purposes only, and does not constitute personal advice. Consult with your own financial and tax advisor with respect to your personal situation. Some products may not be available in every jurisdiction where Pan‑American Life is licensed to do business. All products are subject to exclusions and other applicable terms and conditions.