Purchasing life insurance with living benefits can help make day-to-day finances more manageable during a medical crisis.

One reason people give for not buying life insurance is that it lacks an instant return. Yes, there is comfort in knowing that loved ones have been protected. But, the fact remains, the policyholder isn’t going to be around to enjoy its benefits.

But things have changed. Today, there is life insurance that you don’t need to die to use. With accelerated benefits riders, or living benefits,1 you may access your death benefit while still alive.

Life insurance with living benefits provide flexibility and options in the case of a critical, chronic or terminal illnessWhat Are Accelerated Benefits Riders?

Accelerated benefits can be added to an insurance policy in the form of a “rider.” For policyholders facing a critical illness or injury, living benefits can help manage the associated medical expenses. Without benefits in place, a medical crisis can be financially devastating.

How Do They Work?

No one wants to think about becoming seriously ill or dying, but sadly, it happens. Being prepared is your best defense to protect your family, assets, and quality of life.

Living benefits may be paid to the insured for the following events:

  • Terminal illness diagnosis, with death expected within a specified period
  • A catastrophic illness or the need for extraordinary medical intervention
  • Long-term care
  • Permanent nursing home confinement.

The policyholder decides how to spend the benefit. It can be used for anything that makes life more manageable during this difficult time. This may include household expenses, bills, home modifications, nursing care, the mortgage, or even, a family trip. 

Chronic, critical or terminal illness, accelerated benefit riders, indexed universal life insurance, living benefitsHow Do Living Benefits Affect the Death Benefit? 

Living benefits are deducted from the total death benefit amount. Payments are made in monthly installments or as a lump sum. The amount varies by policy. It’s normally between 50 to 80% of the total death benefit. Some, however, can be as much as 100%.

As you plan for your needs, keep in mind that living benefits will reduce the overall death benefit payment. If 100% of the death benefit is paid in living benefits, the policy will cease.

It’s important to continue making the policy’s premium payments while the living benefits are paid. This keeps the remainder of the policy current.

What’s Next?

Life insurance is no longer simply about a death benefit. Policies and features have evolved to meet the needs of the insured and their families in both life and death. Living benefits provide flexibility, allowing you to plan for the unexpected. Is there any reason to not consider buying a life insurance policy?

Speak to your insurance agent about buying life insurance or updating an existing policy. Learn how living benefits can help you better prepare for life’s ups and downs and effectively protect your family’s future.

1Living benefits are not available in every state or in conjunction with every product.