Living Benefits | Maximizing Life Insurance Today
What is life insurance with living benefits?
This insurance offers the traditional death benefit of a life policy, plus early access to part of the benefit in certain cases like terminal, chronic, or critical illness, providing financial flexibility when most needed.
How do living benefits in a life insurance policy work?
If diagnosed with a qualifying illness, you can access a part of the death benefit while still alive, using it for medical expenses, lost income, or other needs, easing financial stress during a difficult time.
What illnesses are typically covered under living benefits?
Living benefits usually cover terminal illnesses (with life expectancy typically 12 months or less), chronic illnesses affecting daily activities, and critical illnesses like cancer, heart attack, or stroke.
Does accessing living benefits reduce the death benefit?
Yes, using living benefits reduces the total death benefit, with the remaining amount paid to beneficiaries upon death.
Are there tax implications for using living benefits?
Funds from living benefits are generally tax-free, but consulting with a tax professional for your specific situation is advisable.
How does having living benefits impact policy premiums?
Policies with living benefits might have slightly higher premiums but offer greater flexibility and comprehensive coverage, making them a valuable investment.
Can living benefits be used for non-medical expenses?
Yes, there are no restrictions on using funds from living benefits; they can cover medical costs, daily expenses, debt payments, or any other financial needs.
How to qualify for living benefits in a life insurance policy?
Qualification typically requires a diagnosis of a qualifying illness by a medical professional, with specific terms and conditions outlined in your policy.
What happens if living benefits are not used?
If not used, the life insurance policy functions like a traditional policy, and the full death benefit is paid to beneficiaries upon death.
Should everyone consider a life insurance policy with living benefits?
While it’s a personal decision, a policy with living benefits can be a prudent choice for those seeking comprehensive coverage. It offers the security of a traditional life insurance death benefit, plus added financial protection in case of a serious health event, making it an attractive option for many.