Deaths are inevitable, and everyone tends to think about the end. Assuming that we will leave everyone behind is the second thought that comes in mind, but the first one is thinking about the dependents. One member of the family is always there on which other members are dependent partially or fully for their needs. This is the phase when life insurance gets into play. Life insurance is a great way to take care of your dependents, even in your absence. It is unpleasant to think about all this, but it is essential to consider. Life insurance is a kind of agreement where the insurance company agrees to pay a specified amount after the death of a person who had done the insurance. The life insurance policies give assurance to the insured person that they will provide financial protection to their family.
There is a wide variety of life insurance that you can choose according to your financial condition and needs. It is better to invest in life insurance that offers the best benefits at the lowest cost. Many people are confused about life assurance vs life insurance, and the fundamental difference between them is that life assurance provides you coverage for your whole life. In contrast, life insurance offers you coverage for a limited period. Life insurance is usually bought to provide benefits to your family after you die, but there are some cases in which you can get benefitted from the insurance policy while you are alive.
Cases in which you are allowed to avail the benefits of life insurance while you are alive
Long term illness
Long term severe illnesses, better known as chronic diseases or terminal illness, is a condition in which the policyholder is allowed to avail of the benefits of the life insurance policy while he is alive. But before allowing you to avail of the death benefits being alive, the insurance company first ensures that you are suffering from real illness. You must get the illness or disease certified from the doctors who will confirm that the policyholder is suffering from a chronic disease, and he is unable to do minimum two of the regular day-to-day activities such as eating, bathing without any additional support.
It is such an illness in which the person is expected to die after a certain period. In such a situation, a doctor ensures after a medical examination that the insured person will be dead within the next two years.
Tapping into the cash value of the policy
There are two significant types of insurance policies; term life insurance and permanent life insurance. Term life insurance is the best option for people who cannot afford to buy expensive insurance policies as it is quite affordable but only offer a claim if the insured dies while the policy is active. Permanent life is more costly but offers many more benefits, such as investment aspects, cash value, etc. Permanent life insurance allows you to build a good cash value of your policy, which you can withdraw anytime and use it for any purpose.
Sell the policy
It is another way to get profits from your life insurance policy while you are alive. You can sell your insurance policy and get a payment worth in return. The payment may be made in a lump sum amount or can also be offered in small regular payments. There are various investors who are willing to purchase your insurance policy at a higher amount than its cash value, but you will get a lower amount than the real value of your policy.