Most people think of life insurance as money that arrives after you're gone. Living benefits change that. They let you use part of your own death benefit while you're alive if you're diagnosed with a qualifying critical, chronic or terminal illness.
That matters more than it sounds. A serious diagnosis usually brings two problems at once: the medical bills, and the income that stops while you deal with them. Living benefits are designed to put money in your hands during that window. That way your family can focus on you instead of the mortgage.
Some companies use the phrase "living benefits" to mean borrowing against a policy's cash value, an amount that builds up inside some permanent policies. That's not what I mean. I mean accelerated death benefit riders. A rider is an extra feature built into or added to the policy. Several of the carriers I work with include these riders on term life policies at no added premium. Which riders you get, and what each one covers, varies by carrier. That's exactly why working with an independent agent matters here.
Important to know about life insurance with living benefits
- Living benefits are provided through accelerated death benefit riders.
- Availability, qualifying conditions, benefit amounts and any charges vary by carrier, policy and state.
- Benefits paid may be taxable and may affect eligibility for Medicaid, Supplemental Security Income or other public assistance programs. Consult a tax professional.
- This is a general description only; the policy and rider documents control.