Life insurance with living benefits, often referred to as “living benefits” or “accelerated benefits,” is a type of life insurance policy that goes beyond its traditional purpose of providing a death benefit to beneficiaries upon the policyholder’s passing. Instead, it offers benefits that can be accessed during the insured person’s lifetime under certain circumstances.
Types of Living Benefits
The following are some living benefits commonly associated with life insurance policies:
- Critical illness coverage can allow policyholders to receive a portion of their death benefit if diagnosed with a covered critical illness, such as cancer, heart attack, or stroke. These funds can help cover medical expenses, treatment costs, or even lifestyle adjustments.
- Chronic illness coverage can provide financial assistance to policyholders who cannot perform certain activities of daily living or need long-term care due to chronic illnesses. It can help cover the costs of caregiving, medical equipment, or facility-based care.
- Terminal illness coverage may allow the policyholder to access a portion of their death benefit for medical expenses, hospice care and other end-of-life needs if they are diagnosed with a terminal illness and have a limited life expectancy.
How Does Life Insurance With Living Benefits Work?
Life insurance with living benefits allows policyholders to access their policy’s death benefit while they’re alive, contingent upon specific policy criteria. These criteria can vary among insurance providers but often involve the diagnosis of a qualifying medical condition. To begin, you acquire a life insurance policy with living benefits. If a qualifying event occurs, like a diagnosis of a covered critical illness, you initiate the claim process by submitting necessary medical documentation and meeting policy-specific requirements. Once approved, you may receive a lump-sum payment from your policy’s death benefit, which can be used to cover medical bills, treatment or other expenses associated with your illness.
Why You May Need Life Insurance With Living Benefits
The following are a few reasons why you might consider life insurance with living benefits:
- Financial security—Living benefits help provide financial security during challenging times. They can help you avoid depleting your savings or retirement funds to cover unexpected medical expenses.
- Peace of mind—Knowing your life insurance policy can assist you if you face a critical or chronic illness and offer you and your loved ones peace of mind.
- Flexible use—The funds from living benefits can be used for various purposes, from covering medical bills to making necessary modifications to your home for better accessibility.
- Supplement other coverage—Living benefits can complement your health insurance or long-term care insurance by providing additional financial support in situations where these policies may have limitations.
If you’re interested in life insurance with living benefits, contact The Insurance Pad, LLC to find a policy that suits your needs and provides the appropriate level of coverage. This can ensure that you and your loved ones are well-prepared for life’s uncertainties.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.