Article Date:
June 2025


Word Count:
2049

 

 

Life Insurance: You Don’t Have to Die to Collect


Looking for a quick infusion of tax-free cash? Your life insurance policy may provide one. And you don’t have to die to collect.

 

Permanent vs. Term Life Insurance

 

To get money out of your life insurance policy without dying, you must have the right type of policy. Life insurance policies come in two basic types: permanent and term.

 

Term life insurance lasts only for a set number of years—typically, 10 to 30. If you die during the term, your beneficiaries get a death benefit. If you die after the term expires, your beneficiaries get nothing. You can’t get money from a term policy while you’re alive.

 

Permanent life insurance lasts for your whole life (so long as you pay the premiums). It pays a death benefit to your beneficiaries when you die.

 

Permanent policies also include a savings component. A portion of your premiums are placed into a cash value account, and this sum grows on a tax-deferred basis. Over time, the interest earned on the policy’s cash value can grow larger than the total amount of premiums you pay. Moreover, you can access your policy’s cash value while you’re alive.

 

Permanent policies come at a price. They cost much more than term life insurance—ten times as much, or ... Log in to view full article.

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