Living benefits let you get part of your death benefit early, while you are still alive, if you get very sick. They usually come from an accelerated death benefit rider.
Living benefits are also called accelerated benefits. The policy pays some or all of the death benefit to you before you die.
You usually must have a qualifying condition. Examples are a terminal illness, a need for long term care, or a serious illness named in the policy.
Whatever you take early comes out of the death benefit. So your family gets less later.
Some insurers charge a small extra premium. Others add it for free but charge when you use it. The company may also pay you a bit less to make up for paying early.
These riders started mostly on permanent policies. The Alabama Department of Insurance says some insurers also offer them on term policies.
- Terminal illness
- Long term care need
- Specified serious illness
- Ask what it costs and when it can be used
More questions
Does using it lower what my family gets?
Yes. The amount you take is subtracted from the death benefit.
Can I add it later?
It is usually offered when you buy the policy. Ask about it before you sign.
Words to know
- Accelerated death benefit
- A feature that pays some of the death benefit early if you have a terminal illness, a certain disease, or a long term care illness.
- Premium
- The amount you pay an insurance company for your policy.
- Rider
- An add on to a policy that changes what it covers. It can add benefits, lower them, or leave some things out.
