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What Is Life Insurance with Living Benefits?

While life insurance protects your family when you die, living benefits may offer protection while you are still alive. You can add living benefits to your term or permanent life insurance policy through a rider, which costs extra. You can generally access your life insurance policy’s living benefits once a triggering event occurs, such as a terminal illness or disability. The exact cost, benefits, triggering event and exclusions may vary by company.

When can I claim living benefits?

You can generally access living benefits when a qualifying event occurs. These events are usually specified in the living benefits rider in your contract details. These riders may include, but are not limited to:
  • Long-term care rider
  • Terminal illness rider
  • Critical illness rider
  • Chronic illnesses
These qualifying events that you may experience leave the insured person with a health condition that:
  • Requires major medical intervention to survive
  • Limits their life expectancy to 24 months or less
  • Requires confinement in a facility for the rest of their life
  • Drastically reduces their life expectancy without significant medical intervention

Does all life insurance have living benefits?

As people live longer, there are more situations in which living benefits riders may be an attractive option. You might develop a terminal illness or permanent disability and need money to pay your medical expenses. Unfortunately, however, not all life insurance policies automatically include living benefits. While some life insurance policies may have built-in living benefits at no extra charge, other life insurance policies may require an additional fee to add living benefits riders.

How much does life insurance with living benefits cost?

The cost of your life insurance premiums varies by company, policy type and term length, if applicable. Other factors that may affect premium costs include your age, health, smoking status and riders such as living benefits. While some policies may have built-in accelerated death benefits, this is not the case with every company. In general, the younger and healthier you are, the lower your premiums will be. For example: $500,000 in 20-year term life insurance coverage averages $27.46 for a 30-year-old man and $21.88 for a 30-year-old woman. These policies may or may not include living benefits riders, depending on the company. Data from: https://www.policygenius.com/life-insurance/basics/intent