Why You Need Living Benefits Life Insurance!

Understanding how life insurance with living benefits will work can be confusing; and figuring out what pays out for the living benefits can seem like you are going in circles.

But what if I told you: 

That having a living benefits life insurance policy is well worth it and that some companies include the option at no additional cost. 

In this post, I will cover what an accelerated death benefit is and how it works, the more modern updates to living benefits and how to get a living benefit term life insurance policy.

What Is Living Benefits Life Insurance?

Living benefits life insurance is a type of insurance rider (the accelerated death benefit) that pays out a percentage of the death benefit; up to 90% while you are still living. The benefits from this rider gives you the opportunity to manage your own end of life journey and to spend time with your family on your own terms before passing. It also helps you deal with a life long chronic illness like a heart attack. 

What Does Life Insurance With Living Benefits Cover? 

Critical Illness

If you are diagnosed with something like cancer, a heart attack, or a stroke, that is considered a critical illness. And if your policy has this benefit, it will pay out up to the allowed percentage of the death benefit.

Chronic Illness

In the event you are diagnosed with a chronic illness and are unable to perform two activities of daily living, like bathing, dressing, or eating, this benefit would pay out a percentage of your benefit on an annual basis.

Terminal Illness

I don’t think anyone wants to get a terminal diagnosis; however, if this does happen to you and you are given between 12 and 24 months to live, the policy will pay out a lump sum amount to cover things like experimental medicine, final expenses, or to just spend time with family.

How Much Of The Death Benefit Can You Accelerate?

You can accelerate usually 75% up to 90% of the death benefit with a living benefits life insurance policy, some companies also may have an “Up To” dollar amount set.  The amount of the benefit that you are able to accelerate or get in advance will vary by the company.

For Example:

Let's say you have a $500,000 policy and use the terminal illness accelerated death option with a 75% payout. The company would pay out $375,000, and then upon your death, they would pay out the remaining $125,000.

Be mindful that the living benefit rider is a one time use so be sure it is the best course of action before you use it.

Which Life Insurance Policies Have Living Benefits? 

Since it's really policy and company specific; any life insurance product can have a living benefit attached to it.  Below we cover the most common living benefit policies.

Term Life Insurance With Living Benefits

Whole Life Insurance With Living Benefits

Universal life insurance with living benefits And Cash Value

How Much Is Life Insurance With Living Benefits?

Up to 25% more per month - A life insurance with living benefits policy can increase your monthly premiums by up to 25%. However; some companies include this benefit at no additional cost or already include the cost in your final quote.

Can I Get Life Insurance With Living Benefits Quotes?

The best way to get quotes for life insurance with living benefits is to use our quote tool below. 

Who Has The Best Life Insurance With Living Benefits?

• Ethos

• Bestow

Pros And Cons Of Living Benefits Life Insurance

Pros

Cons

Is Life Insurance With Living Benefits Worth It?

In my professional and personal opinion these benefits are absolutely worth it. First of all, most companies offer these at no additional cost, so you aren't paying anything additional for them, making this the living benefits well worth it; you will also have:

Peace of Mind & Pre-Planning - Knowing that if you get diagnosed with a terminal illness, you can help with your family's financial transition. There is nothing worse than not knowing, this is the best way to know what everything will go as it should before you pass away. It gives you the opportunity to pre-plan everything from funeral arrangements to how much will be distributed to your family.

Funding Medical Care - Another ability you will have is being able to maybe pay for some advanced treatments that aren't available unless you have a specific amount of cash. If you get diagnosed with something terminal and a special treatment is available that your insurance won't cover, you could use it for that.

Final Days With Family - Some people just want to spend their last days, happy and with their family. Not cooped up in a hospice waiting to pass away, some people would even prefer to go though this experience in the comfort of their home. Either way, having access to these benefits is great and you shouldn't pass up on the opportunity.

Coverage For A Chronic Illness - There are policies that will also pay out if you get a chronic illness or have a heart attack.  Those are also great benefits because they will support whatever you need to manage a chronic illness over time.

Is Living Benefit Life Insurance Taxable?

No, According to the Office of Personnel Management, any living benefit payout received after January 1st, 2017 will be paid out tax-free. Keep in mind that there is a chance you could pay a state tax depending on where you live so be sure to know how this will work before you move forward in your specific state.

How Do I Get A Living Benefits Life Insurance Policy?

Getting a Life insurance with living benefits policy is not complicated, usually you just need a solid company and they will offer it as part of the policy. There is no reason to wait for life insurance coverage for you and your family. You can click on any of the above buttons to get a quick life insurance quote and get covered.