Living Benefits
Living Benefits
Life insurance is insurance you can buy to protect your loved ones after you pass. It works like this: you find a type of life insurance you like, you apply, and, if accepted, pay a monthly premium until you pass, at which point your loved ones receive the death benefit.
The benefits of life insurance don’t just stop with the death benefit – there are ways to use the policy to your own advantage during your lifetime. One way is through living benefits. Living benefits are different riders you can add to your life insurance policy to protect you during times of chronic illness or financial instability. Keep reading to learn more about living benefits.
Living Benefits Basics
Living benefits are a catchall term for how you can use your life insurance policy while alive. There are different types of life insurance. The type of life insurance you have will determine the living benefits available to you.
We are committed to helping you realize your health and financial goals by making you aware of all your options so that you can make the best choice for yourself and your family.
Term Life Insurance Living Benefits
With term life insurance, you can add riders to your policy. While these riders cost extra, they can provide you with living benefits while alive.
Disability Waiver of Premium
If you develop a disability, you can stop paying your premiums while keeping the policy.
Return of Premium Rider
If you don’t pass away during the term, the policy will return your premiums to your family.
Terminal Illness Rider
If you develop an illness and are expected to pass within two years, you can use your death benefit during these last few years if you want.
Critical Illness Rider
If you develop an illness with high medical costs and shortened life expectancy, you can use part of your death benefit to pay for these costs while you are still alive.
Chronic Illness Rider
You can use your policy if you develop a chronic illness and need to use your death benefit to cover costs while alive.
In the cases of the terminal, critical, and chronic illness riders, any benefits you receive while alive will be deducted from your death benefit.
Permanent Life Living Benefits
Permanent life insurance policies, such as whole and universal, allow you to use the policy as an investment. When you pay your premium, the insurance company puts a part of the premium into a high-interest or investment bank account. As this amount, called the cash value, builds up, your cash value increases. This gives you a host of living benefit opportunities.
Surrender
You can cancel your policy and cash out your cash value. However, you will no longer be protected.
Loans
You can use your cash value to get a loan at a competitive rate. It will likely be deducted from your death benefit if you do not pay it back.
Withdrawal
You can withdraw from your cash value as you would a bank. However, this will likely be deducted from your death benefit.