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Life insurance isn’t just for after you’re gone; it can support you while you’re still living.
When most people hear “life insurance,” they immediately think of a payout after death. But the right life insurance type can offer more than just a death benefit; it can help you build savings, plan for retirement, and cover unexpected costs while you’re still alive.
Thanks to features like cash-value life insurance and customizable riders, today’s life insurance has evolved into a flexible financial tool that supports your life goals, not just a safety net for your loved ones.
Why Life Insurance Matters (Even While You’re Alive)
Modern life insurance can offer more than just peace of mind. Some policies allow you to:
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Accumulate cash value over time
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Borrow against your policy for emergencies or big purchases
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Supplement your retirement income
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Pay premiums using your policy’s built-up value
If you’re curious about how these living benefits work, take a look at this guide on cash-value life insurance.
Term-Life Insurance: Simple and Affordable
Term-life insurance provides temporary coverage for a set number of years—usually 10, 20, or 30. If you pass away during that period, your beneficiaries receive a tax-free death benefit. This option is straightforward and budget-friendly.
Best for: Those looking for affordable coverage during key life stages (raising children, paying a mortgage, etc.).
Keep in mind: Term policies do not include a cash value component. Once the term ends, the coverage expires unless renewed—usually at a higher rate.
Whole-Life Insurance: Lifetime Coverage + Cash Value
For those who want permanent coverage and a built-in savings component, whole-life insurance may be the right fit. These policies include a guaranteed death benefit plus a growing cash-value account that earns interest over time.
Learn more in this in-depth breakdown of whole-life insurance.
Pros:
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Lifelong coverage (as long as premiums are paid)
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Fixed premiums that do not increase with age
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Access to the policy’s cash value for loans or withdrawals
Best for: Long-term planners who want stability, guaranteed returns, and a flexible financial asset.
Cash-Value Life Insurance: A Living Asset
Policies with a cash-value component (like whole life or universal life) give you access to funds while you’re still alive. The money you accumulate is tax-deferred, and you can use it for anything—from unexpected medical bills to future investments.
Dive deeper into how cash-value life insurance works and how it can complement your long-term financial strategy.
Just be aware: Borrowing too much from your policy without repaying it can reduce your death benefit and possibly trigger taxes.
Customize Your Policy with Riders
Want even more flexibility? Many insurance companies let you add riders to your policy. These are optional features that enhance your coverage.
Popular choices include:
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Accelerated death benefit rider – lets you tap into your death benefit early if you’re diagnosed with a terminal illness
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Waiver of premium rider – covers your payments if you become disabled
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Child rider – provides term coverage for your children
Check out this resource on life insurance riders to see which options might be worth adding to your policy.
Choosing the Right Type for You
Your ideal policy depends on your current goals, financial situation, and the kind of flexibility you want. Here is a quick breakdown to help you decide:
| Your Priority | Best Fit |
|---|---|
| Budget-friendly coverage | Term-life insurance |
| Lifetime protection with stable premiums | Whole-life insurance |
| Access to funds while you’re still alive | Cash-value policies |
| Tailored benefits and more control | Add riders to your policy |
For a full overview of all major life insurance types, including group, universal, and variable options, visit this guide from the Insurance Information Institute.
Final Thoughts
Life insurance isn’t just about planning for the worst—it’s also about building a financial cushion while you’re alive. Whether you want to protect your family, grow your savings, or gain financial flexibility, there is a policy designed to meet your needs. Take time to compare your options, understand the features, and choose a policy that supports both your present and your future. If you want to learn more about life insurance check our article How Health Insurance and Life Insurance Work Together to Protect Families.
Life Insurance Questions?
We hope that this information on life insurance type is useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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