Over the last several years, the term "life hack" has come into vogue. A life hack is an object or process used to make a small part of your life easier, usually by taking a common object and repurposing it for something that it wasn't originally made for. Examples include using old socks as wearable dusting rags during spring cleaning, a contact lens case for pill storage during an overnight trip, or a muffin tin as a condiment holder for an outdoor barbecue.
In a sense, a life insurance policy acts as a financial "life hack." After all, it can be utilized for something other than providing a death benefit upon someone's passing. Here are ten innovative ways that a life insurance policy can be used:
- As a safeguard against being uninsurable. People who are very old and/or unhealthy may not be able to obtain a new life insurance policy. But if you already have a term life insurance policy, you can extend the term or convert it to whole life insurance before it expires - so your coverage never lapses.
- As collateral. If you ever need to apply for a loan of any sort, you can use the cash value of a whole life policy as a source of collateral in order to receive a higher amount or a lower interest rate.
- As an investment tool. The value of a whole life policy will always grow and never decline, which is more than can be said for many other investments on the market. Some policies even pay dividends to the policyholder.
- As a way to pay for college. With the costs of tuition rising, you can tap into the cash value of your whole life policy to help pay the costs of higher education for your children or grandchildren.
- As a way to pay off your debts. If you ever need to repay loans, you don't have to wait until you die to access your payout. Just draw upon the cash value of your whole life insurance policy to settle those debts.
- As an additional source of retirement income. If Social Security and your retirement savings do not provide enough income during your golden years, you can arrange to withdraw a regular stipend from your whole life policy - or even surrender the entire policy in favor of the cash value.
- As funding for long-term care. Many older adults require partial or round-the-clock medical care, which can be expensive. Funds from your whole life policy can be allocated toward these long-term care costs while you are still living.
- As a way to fund a favorite charity. If you want to support a cause or organization that has become important to you, part or all of the death benefit of your life insurance policy can be earmarked for that charity upon your passing.
- As a way to help pay taxes. If you've accumulated significant wealth, your heirs may be left with a hefty estate tax bill upon your death. As a result, many people acquire life insurance policies in order to offset or pay off any post-death tax bills.
- As financial security for your heirs. If your loved ones know that they will receive a portion of your life insurance death benefit as part of their inheritance, they can enjoy the peace of mind of having a fiscal safety net while they are alive.
Obtaining quotes for a life insurance policy is easy. Just visit the IntelliQuote website, fill out a basic form, and you'll receive price quotes from several insurers so you can compare premiums and policies side by side. When you think about it, you can really view IntelliQuote as a sort of "life hack" with regard to shopping for life insurance!