Living benefits of life insurance

A unique feature of whole life insurance is the living benefits it can provide. Through the cash-value accumulation in the policy, a policyowner has a ready source of funds that may be borrowed at reasonable rates of interest. These funds may be used for a personal or business emergency. For example, insurance cash value could be used to help pay for a child’s education, to pay off a mortgage, or to supplement retirement income. It’s not a requirement of the policy that the loan be repaid. However, if a loan is outstanding at the time the insured dies, the amount of the loan plus any interest due will be subtracted from the death benefit before it’s paid.

Policy “loans” really are more like benefit advances than they are loans. In addition, because life insurance is considered property with a quantifiable cash value, it may be used as collateral or security for loans. One of the greatest living benefits of life insurance is that not only is cash value accumulation tax-deferred, but access to cash values also is legally tax-free.

Eternal life insurance carries with it many living benefits that are enumerated in Scripture. The outworking of the Holy Spirit in the life of the person who is in covenant with God is the evidence of that person’s eternal protection. The Holy Spirit guarantees a person’s eternal life insurance (Ephesians 1:13-14, 4:30), and (Galatians 5:22-23) “the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control; against such things there is no law.”

Elsewhere in apostolic teaching, it is written, (I John 3:19, 4:15-17, 19) “Whoever keeps his commandments abides in God, and God in him. And by this we know that he abides in us, by the Spirit whom he has given us … Whoever confesses that Jesus is the Son of God, God abides in him, and he in God. So we have come to know and to believe the love that God has for us. God is love, and whoever abides in love abides in God, and God abides in him. By this is love perfected with us, so that we may have confidence for the day of judgment, because as he is so also are we in this world … We love because he first loved us.”

We have the promise that the living benefits of eternal life insurance pay modal dividends into its death benefit, for Christ taught, (Matthew 6:20-21) “Lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”

Jesus through parables also instructed about the compounding-interest effect that proper and wise investment on this side of heaven can have on our rewards in heaven (Matthew 25:20-23, Luke 19:15-26).

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Covenant theology