3 Unusual Reasons Why People Purchase Permanent Life Insurance

We seldom think about the worst-case scenarios in life, but having permanent life insurance allows you to protect your income in the event of illness or disability. When you can’t work for prolonged periods, this kind of insurance can give you some financial support in terms of regular income.

You can also use permanent life insurance to pay back debts, fund a charitable organization, or provide living expenses to your loved one. There are also other unusual reasons why people go for this type of insurance policy. Without further ado, here are the top 3 unusual benefits of permanent life insurance:

  1. Balancing the Scales in Property Divisions

There are times when it can be difficult to divide property equally, especially if there is one item in the property with a higher value like a painting or a special piece of real estate. While the next generation can sell the property in question and split the cash, there may be concerns about the legacy of the item. To handle the imbalance among your heirs in such situations—and prevent bickering or unnecessary interest battles—you can give an approximately equal value of the property in life insurance proceeds to one heir and the actual property to the other.

  1. Zero-Tax Wealth Transfer

You can also use permanent life insurance to pass wealth to your future generations. In most states, life insurance payments are not taxed. This means that if you name your children as the main beneficiaries, you can use life insurance to pass your wealth to them without being subjected to real estate tax.

The transfer may not happen directly though. In most cases, your policy is used to finance some irrevocable trust, which can be managed by a trustee on behalf of your children or preferred beneficiaries. There are other complex strategies that can be leveraged by real estate experts and attorneys, but the most important thing to remember is that permanent life insurance can be handy in avoiding real estate taxes.

  1. Covering your baby

You can also lock permanent life insurance coverage and give your baby some source of savings from the very start of his or her life. When he or she becomes an adult, the dividend payments can either provide a good amount of money as income or pay the entirety of the insurance policy premiums. This kind of coverage can also cushion you against the economic hurdles of your child passing away, including medical bills and burial arrangements.


Permanent life insurance is a viable investment option for many people, especially high net worth individuals. It is also great for people who are looking for conservative but dependable investment vehicles or those with specialized needs. As you can see from the above highlighted unusual uses, permanent life insurance can provide much more affordable protection. You can get coverage for a lot of issues for less money and you can buy the policy to cover you as long as the protection is resourceful to you.