Life insurance with living benefits offers more than just a death benefit payout to beneficiaries upon the insured’s passing. It provides additional benefits that can be accessed during the insured’s lifetime, offering financial protection in various situations. This guide explores life insurance with living benefits, its features, benefits, and considerations for choosing the right policy.
What are Living Benefits in Life Insurance?
Living benefits in life insurance allow policyholders to access a portion of their death benefit while they are still alive under certain circumstances, such as critical illness, chronic illness, or terminal illness. These benefits provide financial support to policyholders and their families during difficult times.
Types of Living Benefits
Critical Illness Benefit
Critical illness benefit provides a lump-sum payment if the insured is diagnosed with a covered critical illness such as cancer, heart attack, stroke, or organ transplant. The funds can be used to cover medical expenses, treatment costs, or other financial obligations.
Chronic Illness Benefit
Chronic illness benefit provides accelerated death benefits if the insured is unable to perform two or more activities of daily living (ADLs) or requires substantial supervision due to a chronic illness. It helps cover long-term care expenses or other needs.
Terminal Illness Benefit
Terminal illness benefit allows the insured to access a portion of the death benefit if they are diagnosed with a terminal illness and have a life expectancy typically ranging from 6 months to 2 years. It can help cover end-of-life expenses or provide financial support.
Benefits of Life Insurance with Living Benefits
Financial Protection During Critical Illness
Living benefits provide financial support when you need it most, such as during a critical illness diagnosis, helping cover medical bills, treatments, and other expenses.
Access to Funds Without Surrendering Policy
Policyholders can access funds from their life insurance policy without surrendering the policy or waiting until death, providing flexibility and peace of mind.
Supplemental Retirement Income
Living benefits can serve as a supplemental source of income during retirement if the policyholder faces a chronic or terminal illness, helping maintain financial stability.
Tax-Free Benefits
Benefits received from living benefits are typically tax-free, providing a significant advantage compared to taxable income sources.
Considerations When Choosing Life Insurance with Living Benefits
Coverage Options
Evaluate the coverage options provided by different insurers, including the types of living benefits offered, coverage limits, and eligibility criteria.
Premiums and Costs
Consider the cost of the policy, including premiums and any additional fees associated with living benefits. Ensure it fits within your budget.
Policy Flexibility
Choose a policy that offers flexibility in accessing living benefits and allows customization based on your needs and circumstances.
Financial Stability of Insurer
Select a reputable insurance company with a strong financial rating and a track record of fulfilling claims promptly.
Best Life Insurance Policies with Living Benefits
Prudential
Prudential offers life insurance policies with comprehensive living benefits, including critical illness, chronic illness, and terminal illness riders. They provide flexibility and customization options.
AIG
AIG provides life insurance policies with living benefits riders, offering coverage for critical, chronic, and terminal illnesses. They offer competitive rates and flexible policy options.
Lincoln Financial Group
Lincoln Financial Group offers life insurance with living benefits riders, providing financial protection for various health-related situations. They have a strong financial reputation and customizable policies.
Mutual of Omaha
Mutual of Omaha offers life insurance policies with living benefits riders, including critical illness and chronic illness riders. They provide straightforward coverage and excellent customer service.
Conclusion
Life insurance with living benefits offers financial protection not only in the event of death but also during critical, chronic, or terminal illnesses. Understanding the types of living benefits available, their benefits, and considerations for choosing the right policy is essential. By selecting a policy with living benefits from a reputable insurer, you can ensure financial security for yourself and your loved ones during challenging times.