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How can I use life insurance if I am alive?
There are three ways that you can use life insurance while you're still alive: accessing cash value (this doesn't apply to term policies), using your living benefits (these also have requirements) and selling your policy.
What happens to my life insurance if I don’t die?
If you've made it to the end of your term and you haven't died (let's hope this is the case), then typically one of two things happen: The policy will simply end and you'll no longer be covered, or your insurer may allow you to convert all or a portion of the policy into permanent life insurance.
What happens if you don’t die life insurance?
But if you don't die and your policy terminates before your death, then the funds will be abandoned. However, there is no need to feel disheartened as there is always some life insurance that pays back if you don't die. Return of Premium, also known as ROP, refunds your money if you do not die during the policy period.
Can you use a life insurance policy while you are still alive?
Permanent life insurance policies will allow you to access the cash portion of your account while you're alive. Term life insurance, meanwhile, does not have a cash element for policyholders to access. So, if you're planning on using your life insurance as a backup cash resource you'll want to avoid term policies.
What happens if you live past your term life insurance?
At the end of the agreed policy term, your cover will end and all premiums will have been paid. If you outlive your policy term (an agreed set period of time), the payout is obsolete and you life insurance cover will end.