What are living benefits? In reference to life insurance, living benefits are a set of riders that allow you to access all or a portion the death benefit (face amount) of your life insurance policy while you are alive. For the longest time we have purchased life insurance for the benefit of others. Today, living benefits riders on your life insurance policy can be a great tool to help you protect in the event of many of today’s illness risk in addition to securing your families financial future when you are gone. The three most significant living benefits riders are: terminal, chronic, and critical illness riders.
Terminal Illness Rider
- Access a portion or all of the death benefit of your life insurance policy if you are diagnosed with a terminal illness.
- Usually allows access on a lump sum basis.
- This riders goal is to provide resources to allow you get your affairs in order before death.
Chronic Illness Rider
- Access a portion of the death benefit of your life insurance policy if you are diagnosed with a chronic illness.
- Usually allows access on a monthly basis.
- Provides resources that could be used to pay bills associated with being chronically ill.
Critical Illness Rider
- Access a portion or all of the death benefit of your life insurance if you are diagnosed with a critical illness.
- Usually allows access on a lump sum basis.
- Provides resources that could be used to pay hospital bills resulting from major critical illnesses such as cancer, heart attacks, strokes, and other major illnesses.
This post is intended make you aware of and give you a basic understanding of living benefits riders. Keep in mind that the living benefits riders availability, qualification requirements, and cost will vary greatly from company to company. Many people purchase regular life insurance policies today because they simply do not know these benefits exist. When you meet with an insurance professional ask if the program they are showing you includes living benefits and if so, at what cost? You might be surprised when you find that there are companies that give you these living benefits riders at no additional cost.
Daniel Wilgocki
706-955-0201
Great info Daniel. That’s stuff that most people don’t think about until it’s too late!