Life Insurance
July 11, 2017

What Is Living Benefits Life Insurance?

By admin

Living benefits life insurance is a type of life insurance policy that allows the policyholder to access some or all of the death benefit while they are still alive. This can be done through a variety of riders, such as:

  • Accelerated death benefit: This rider allows the policyholder to access a portion of the death benefit if they are diagnosed with a terminal illness and have a life expectancy of less than two years.
  • Critical illness benefit: This rider allows the policyholder to access a portion of the death benefit if they are diagnosed with a critical illness, such as cancer, heart attack, or stroke.
  • Long-term care benefit: This rider allows the policyholder to access a portion of the death benefit to pay for long-term care expenses, such as nursing home care or home health care.
  • Cash value withdrawal: This rider allows the policyholder to withdraw some of the cash value that has accumulated in their policy.

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Living benefits life insurance can be a valuable tool for people who are facing a serious illness or who need financial assistance to pay for long-term care. However, it is important to note that these benefits typically come with higher premiums than traditional life insurance policies.

Here are some of the pros and cons of living benefits life insurance:

Pros:

  • Access to funds while you are still alive: This can be helpful if you are facing a serious illness or need financial assistance to pay for long-term care.
  • Can help you avoid probate: If you use living benefits to access funds from your life insurance policy, the money will not go through probate, which can save your beneficiaries time and money.
  • Can help you maintain your lifestyle: Living benefits can help you pay for medical expenses, long-term care, or other expenses that can be expensive.

Cons:

  • Higher premiums: Living benefits life insurance policies typically have higher premiums than traditional life insurance policies.
  • Surrender charges: There may be surrender charges if you withdraw money from your policy before it matures.
  • Policy restrictions: There may be restrictions on how you can use the living benefits, such as the amount of money you can withdraw or the type of expenses you can use the money for.

If you are considering living benefits life insurance, it is important to weigh the pros and cons carefully and talk to a licensed life insurance agent to get more information.