Hi Toofuzzy. In a sense XIV is somewhat like capturing that little bit extra.
Instead of 50/50 stock/bonds, 10/90 XIV/Bonds, that broadly track each other reasonably. Simulating XIV data using 5x daily Dow changes over the 2008/9 financial crisis period indicates that monthly rebalanced 10/90 XIV/cash would have maxDD (maximum drawdown from prior highest peak to lowest point), since mid 2008, drawn down around 25% for both. Which if taken as the additional amount of 'cash' that had to be injected to maintain target weightings still >50% of cash reserves. Given the relatively likelihood of not having to call upon 50% of cash for liquidity it can be invested elsewhere (tied up) for likely higher reward than if potentially needed at any point in time (for liquidity). Or even be used to support other AIM's (loans of sort) when they might be shouting loudly for cash to invest.
That aside and there's little other benefit of using XIV over holding stocks, excepting perhaps costs/taxes, one or the other might be the more 'efficient' holding. A risk is that XIV has to be treated with respect, 10/90 XIV/cash instead of 50/50 stock/cash type mindset, it could however be enticing for some to over-do it (leverage inappropriately).