Navigating Insurance Policies
Empowering clients with informed decisions for financial support during critical times
Calculate How Much Life Insurance You Need
Life insurance is traditionally viewed as a financial safety net for loved ones after the policyholder’s death. However, modern life insurance policies often come with living benefits, providing financial support while the policyholder is still alive. These benefits can be crucial in managing unexpected health issues and ensuring financial stability during challenging times.
What is Living Benefits?
Living benefits, also known as accelerated death benefits, are features or riders attached to life insurance policies that allow policyholders to access a portion of their death benefit while they are still alive. These benefits are typically triggered by specific conditions such as terminal illness, chronic illness, or the need for long-term care.
Types of Living Benefits
Terminal Illness Rider: This rider allows policyholders diagnosed with a terminal illness, with a life expectancy of six months to two years, to access a portion of their death benefit. This can help cover end-of-life care and other associated expenses.
Chronic Illness Rider: If a policyholder is diagnosed with a chronic illness that prevents them from performing at least two of the six activities of daily living (ADLs) such as bathing, eating, or dressing, they can use this rider to cover necessary care costs.
Critical Illness Rider: This rider provides access to funds if the policyholder is diagnosed with a critical illness like a heart attack, stroke, or kidney failure. The funds can be used to cover high medical costs and other related expenses.
Long-Term Care Rider: This rider is designed to help cover the costs of long-term care services if the policyholder cannot perform at least two ADLs. It can be used for nursing home care, in-home caretakers, and other long-term care needs.
Benefits of Life Insurance with Living Benefits
Financial Flexibility: Living benefits provide financial support during critical times, helping to cover medical expenses, long-term care, and other costs without depleting savings or retirement funds.
Peace of Mind: Knowing that there is a financial safety net in place can reduce stress and allow policyholders to focus on their health and well-being.
Comprehensive Coverage: These riders enhance the overall value of a life insurance policy, making it a more versatile financial tool.
Considerations
While living benefits offer significant advantages, it’s important to consider the following:
Reduced Death Benefit: Accessing living benefits will reduce the death benefit available to beneficiaries upon the policyholder’s death.
Cost: Some living benefit riders may come with additional costs, although some insurers include certain riders at no extra charge.
Eligibility: The availability and terms of living benefits can vary by insurer and policy type, so it’s essential to review the policy details and consult with an insurance advisor.
Life insurance with living benefits provides a valuable layer of financial protection, offering peace of mind and support during life’s most challenging moments. By understanding the options and benefits available, policyholders can make informed decisions that best suit their needs and those of their loved ones.
