Life · Chapter 10 · Personal Uses
Personal Uses: Lump-Sum vs Income Needs
Definition
Lump-sum (immediate cash) needs: final expenses, debt repayment, emergency fund, mortgage redemption, estate protection/conservation, charitable gifts. Income needs: survivor income, education funding, retirement supplement, cash accumulation & liquidity.
Exam tip
Cash value gives LIVING benefits too: collateral for loans, low-net-interest policy loans, and tax-free access up to total premiums paid (the cost basis).
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms