Life Insurance With Living Benefits

Key Points

• Certain life insurance policies may provide access to benefits while you are still living.

• Living benefits may be available for qualifying terminal, chronic, or critical illnesses depending on the policy.

• Accessing living benefits will affect the death benefit available to beneficiaries.

Protection While Living

Life insurance is usually intended to provide financial protection to the beneficiaries on the occasion of the insured's death, but some policies also include living benefits which enable a portion of the death benefit to be accessed during the insured's lifetime if certain qualifying conditions are fulfilled. Such benefits are typically offered via accelerated death benefit clauses or riders and differ from policy to policy.

Qualifying Events

Depending on the policy, living benefits may be available following a terminal illness, a chronic illness, or some critical illnesses. Definitions, eligibility requirements, and benefit amounts can vary widely. When reviewing a policy, know which conditions are covered, what documentation is needed, and how benefits are calculated.

Financial Flexibility

A serious illness can affect more than health. It may also disrupt income, increase caregiving needs, and create unexpected financial pressure. Living benefits may provide additional financial flexibility during qualifying circumstances. However, accessing these benefits can reduce the death benefit available to beneficiaries and may affect other policy values.

Know Your Policy

Not all life insurance policies offer the same living benefits. Before choosing a policy, consider the qualifying events, exclusions, benefit limits, rider costs, and effect on the remaining death benefit. Understanding both the protection available during life and the benefit provided after death can help families make a better-informed insurance decision.

Take time to understand how life insurance with living benefits may support your family, and schedule an appointment to explore the options available to you.

This material is for general educational purposes only and is not intended as tax, legal, investment, or individualized insurance advice. Policy features, eligibility, costs, exclusions, and benefits vary by insurer and contract.