Life Insurance You Don’t Have to Die to Use: A Guide to Living Benefits

When most people think of life insurance, they think of a safety net for their loved ones after they are gone. While that is still true, modern policies have evolved. Today, many plans include living benefits—features that allow you to access your policy’s face value while you are still alive.

If you are looking for a way to protect your financial future against the unexpected, understanding how living benefits work is essential.

What Are Living Benefits?

Living benefits are typically "riders" or built-in features of a life insurance policy that allow the policyholder to receive a portion of the death benefit under specific circumstances. Instead of the payout being triggered only by death, it can be triggered by a major health event or used as a source of supplemental funds.

3 Ways Living Benefits Protect Your Finances

1. Accelerated Death Benefits for Critical Illness

A "Critical Illness Rider" allows you to access a portion of your death benefit if you are diagnosed with a specific condition defined in the policy, such as a heart attack, stroke, or invasive cancer. These funds can be used for:

• Covering high-deductible health insurance costs.

• Replacing lost income while you recover.

• Paying for experimental treatments not covered by traditional health insurance.

  
  
  

2. Chronic Illness and Long-Term Care Support

If you become unable to perform daily activities (like bathing or dressing) or require cognitive supervision, a chronic illness rider can be a lifesaver. This allows you to "accelerate" the death benefit to pay for home health care or assisted living facilities, helping to preserve your retirement savings and assets.

3. Tax-Advantaged Supplemental Income

Certain types of permanent life insurance build cash value over time. This is a living benefit you can tap into for any reason—whether it’s a down payment on a home, a child’s college tuition, or supplemental retirement income. Because of the way life insurance is structured, these loans or withdrawals can often be accessed with significant tax advantages.

Why Living Benefits Are a "Game Changer"

Traditional health insurance and disability insurance are vital, but they often have limits. Living benefits provide a lump sum of capital exactly when you need it most. It transforms life insurance from a "death benefit" into a "life-cycle benefit" that supports you through every stage of adulthood.

Is Your Policy Up to Date?

Many older life insurance policies do not include these modern "living" features. If you haven't reviewed your coverage in the last few years, you might be missing out on protection that covers you both "if" you die too soon and "if" you live too long or get sick along the way. 

Our life insurance quoting tool can help you find a policy that offers "living benefits". Try it out and let us know if you have any questions!

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

The Final Expense Alternative

We have all seen the ads on TV for Final Expense insurance, which helps you pay for burial expenses. Most of these ads are for whole life insurance and can be more expensive than you'd expect. And most of the time the coverage is not enough.

When calculating final expenses, most people just consider the cost of a funeral. However, a missing cost are costs associated with dying. Many people don't just die suddenly. There may be a long illness or accident, resulting in a hospital stay and the ensuing medical bills. Not to mention other fees like attorney fees and meals (some like to eat at funerals). 

If someone is relatively healthy they can purchase a Guaranteed Universal Life (GUL) policy which may require some health underwriting, but can save a lot of money in premiums compared to the "guaranteed issue" policies seen on television. Not a lot of insurance carriers still offer GUL's but we have access to the ones that do. 

Let us help you by setting a phone appointment for a short conversation. We are your "friends with living benefits".

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. Please subscribe to this blog!

What Are Living Benefits In A Life Insurance Policy?

Life insurance is typically thought of as a way to provide financial security for your loved ones after you die. However, some life insurance policies also offer living benefits, which are features that can provide financial assistance to you while you're still alive.

There are many different types of living benefits, but some of the most common include:

• Accelerated death benefits (ADB): This type of living benefit allows you to access a portion of your death benefit while you're still alive if you have been diagnosed with a terminal illness. The amount of money you can withdraw will depend on the policy, but it typically ranges from 50% to 100% of the death benefit.
• Critical illness riders: These riders provide a lump sum payment if you are diagnosed with a specific critical illness, such as cancer, heart attack, or stroke. The amount of money you receive will depend on the policy, but it can be used to cover medical expenses, lost income, or other costs associated with your illness.
• Chronic illness riders: These riders provide a monthly income or lump sum payment if you are diagnosed with a chronic illness that limits your ability to work or perform daily activities. The amount of money you receive will depend on the policy, but it can be used to cover living expenses, medical costs, or long-term care.
• Return of premium rider: This rider ensures that you will receive all of the premiums you paid for your life insurance policy if you don't die during the term of the policy. This can be a valuable benefit if you outlive your policy, as you will have received the death benefit without having to pay any premiums.
• Disability waiver of premium rider: This rider allows you to skip your life insurance premiums if you become disabled and unable to work. This can help you keep your life insurance coverage in place even if you can't afford the premiums.

Living benefits can be a valuable way to supplement your income or pay for expenses if you become seriously ill or disabled. If you're considering buying life insurance, it's important to compare policies and find one that offers the living benefits that are most important to you.

Here are some additional things to keep in mind about living benefits:

• Living benefits are typically available as riders, which are additional features that you can add to your life insurance policy for an additional premium.
• The terms and conditions of living benefits vary from policy to policy, so it's important to read the fine print before you buy a policy.
• Living benefits may reduce the amount of your death benefit, so it's important to factor this into your decision when choosing a policy.

If you have any questions about living benefits, leave them in the comments section below or schedule a short phone with one of our licensed agents.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!