Living Benefits

Life Insurance

You Can Use

While You're Still Living

At some point during life, many of us will be faced with one (or more) of the four major threats below:

1. Having too much Debt

2. Living so long that we outlive

our retirement savings

3. Getting sick

4. Dying too soon

We need protection from all of these threats, and it's available through some of the specialized Life Insurance programs that we offer. Many traditional life Insurance policies only payout when you die. But did you know that some life insurance policies can also provide access to your death benefit while you're still living ? We call it "Life Insurance that You Don't Have to Die to Use !" because it provides "Living Benefits" that can be used while you are still living.

Most Living Benefits come in the form of life insurance Riders attached to a life insurance policy. Sometimes they’re also known as Accelerated Death Benefits and are available on both term life insurance and permanent life insurance policies.

Living Benefits essentially allow the insured to access money from the policy’s death benefit while they’re still alive. These funds can be used to pay for expenses associated with a terminal or chronic illness, such as medical care, hospice or nursing home care, in-home caretakers and more. The trade-off is that accessing living benefits reduces the death benefit available to your beneficiaries when you die.

Living Benefits include:

Terminal illness

If you are given a terminal diagnosis with a life expectancy of six months to two years (exact timeline depends on the insurer), you can use this rider to cover end-of-life care and other associated expenses. Often, a terminal illness rider is automatically included in the policy without extra cost, but you should check with your insurer to find out.

Chronic illness

This rider applies if you’re diagnosed with a chronic illness that prevents you from performing at least two of the six “activities of daily living” (ADLs). These are bathing, eating, getting dressed, toileting, transferring and continence.

Critical illness

You can also access living benefits with a critical illness rider, covering qualifying illnesses that shorten life expectancy and have high medical costs. Examples include heart attack, stroke and kidney failure.

Long-Term Care

This rider allows you to access living benefits if you need to pay for long-term care services and you can’t perform at least two of the activities defined under ADL guidelines.

Keep in mind that to access living benefits in life insurance, you will need to submit a claim to your insurance company along with medical records and other documentation. You may receive living benefits as a lump sum or on an as-needed basis. Often, you’re limited in how much you can withdraw to a certain percentage or dollar amount of your policy’s death benefit, such as 80%.

Tax Free Cash Accumulation

Permanent life insurance policies accumulate cash in what is called a "cash value" account. As you pay your premium payments each month, a portion of your premiums is allotted to the policy's cash value account where it is guaranteed to grow at a pre-set and guaranteed amount every year, and to never decline in value. This cash value is separate from the death benefit of your policy, and after a few years of growth, you can access the money in your cash value account while you’re still alive. In fact, the cash value will return to the insurer after you die if you don't use it, so you will want to use it before you lose it - and three ways that you can use your cash value while you're still living are to:

Pay Off Debt
Supplement Retirement Income
Build Wealth