Living Benefits


What are “Living Benefits”? Why are they more important than ever?


The majority of people who buy life insurance do so to provide financial security to a beneficiary when they die. But oftentimes traditional life insurance won't cover the burdensome costs involved when a chronic, critical, or even terminal illness strikes.

There is a solution, though—one that provides relief from the financial demands of such an illness. Some life insurance policies offer an add-on called living benefits, which, in the event of a long-term, catastrophic, or terminal illness, can be accessed while the policyholder is still alive. Here's what you need to know about living benefits and how they might help.

Let's say you develop a chronic illness that's going to require a long-term approach to getting better. Or, you experience a heart attack or stroke, or you find out you have cancer. In each of these cases, there's a good chance that you could recover and continue to live a full and meaningful life; if you're able to afford the cost of proper treatment and care. Unfortunately, your health insurance coverage will likely offer only a partial solution. Wouldn't it be beneficial if you could access your life insurance death benefit to help pay for those costs, rather than digging into your savings?

“Growing numbers of people simply can't afford to get the care we know they need,” said John Seffrin, CEO of the American Cancer Society. “We hear about a growing number of people turning down treatment.”

Some insurance companies will accelerate most of your death benefit if you qualify as terminally ill, but that seems like more of a death benefit for a death sentence. With living benefits added to your life insurance, you can be covered in three separate areas:

Critical illness. Typically pays one lump sum if you have a serious illness such as cancer, or a heart attack or stroke.

Chronic illness. Typically pays a monthly benefit if you've been diagnosed as chronically ill and you are unable to perform two activities of daily living, such as bathing, dressing, or eating. This benefit could pay up to a quarter of the amount of your death benefit annually.

Terminal illness. Typically pays a benefit if you are diagnosed with a terminal illness and are told that your life expectancy is 12 to 24 months. These funds can be used for experimental medicine, preparing for final expenses, or any other purpose you deem necessary.


If you should experience any qualifying critical, chronic, or terminal illness; such as a heart attack, stroke, or cancer, to name a few, you would have the option to collect part of your death benefit to help pay for expenses associated with your illness.

Of course, the amount of money your beneficiary would receive as part of your death benefit would be reduced by that amount. But, having the option to accelerate your death benefit funds could be a critically important step in helping you and your family through an unexpected and unfortunate crisis. It might even be the difference in helping you enjoy a long and healthy life after your illness.

If you have the “OLD life insurance”, without living benefits, this is just one very important reason why to review your life insurance policy with an independent insurance professional that can assist you in presenting the options and solutions you need to protect yourself and your loved ones from the suddenlies of life.