the proceeds of the SPIA are used to fund a permanent death benefit using Universal Life. This arbitrage is magnified at older ages, and when a medical impairment can produce substantially higher payments from a medically underwritten SPIA. RMD maximization, where an IRA owner is facing required minimum distributions (RMD), but has no need for current income, and desires to leave the IRA for heirs. The IRA is used to purchase a qualified SPIA that maximizes the current income from the IRA, and this income is used to purchase a UL policy. Creditor/predator protection. A person who earns a high income, or who has a high net worth, and who practices a profession that suffers a high risk from predation by litigation, may benefit from using UL as a warehouse for cash, because in some states the policies enjoy protection from the claims of creditors, including judgments from lawsuits. Living benefits of life insurance Many people use life insurance, and in particular cash value life insurance, as a source of benefits to the owner of the policy (as opposed to the death benefit, which provides benefit to the beneficiary). These benefits include loans, withdrawals, collateral assignments, split dollar agreements, pension funding, and tax planning. Loans Most universal life policies come with an option to take a loan on certain values associated with the policy. These loans require interest payments to the insurance company. The insurer charges interest on the loan because they are no longer able to receive any investment benefit from the money they lent to the policy holder. Participating loans are generally associated with certain Index Universal Life policies. Since these policies will never incur a loss on the investment portion due to hedging, participating loans are secured by the policy's Account Value, and allow whatever index strategy that was in place prior to creating the loan to remain in place and unaffected as to whatever index return is realized. Standard loans require conversion of any ongoing index allocations to be terminated, and an amount at least equal to the loan moved into the policy's Fixed Account. Repayment of the loan principal is not required, but payment of the loan interest is required. If the loan interest is not paid, it is deducted from the cash value of the policy. If there is not sufficient value in the policy to cover interest, the policy lapses. Loans are not