Some life insurance policies may provide access to certain benefits while the insured person is still living if specific qualifying conditions are met.
These features are often provided through policy provisions or riders.
But they are not all the same, and not every life insurance policy includes them.
Don't simply ask whether a policy has living benefits. Ask how they actually work.
What Does "Living Benefits" Mean?
Traditionally, people think about life insurance as money paid to beneficiaries after the insured dies.
Certain policies may also contain provisions allowing access to a portion of the death benefit under qualifying circumstances.
Depending on the policy, qualifying events may involve circumstances defined by the contract, such as terminal illness, chronic illness or certain critical illnesses.
The exact definitions matter.
Here's Where People Can Get Confused
Hearing "This policy has living benefits" isn't enough information.
Ask:
- What specifically qualifies?
- How does the policy define the qualifying condition?
- Is the feature included or added by rider?
- Is there an additional charge?
- How much of the benefit may be available?
- What happens to the remaining death benefit?
- Are there waiting periods or other limitations?
- What documentation is required?
An Important Distinction
Accessing an accelerated benefit can reduce the amount ultimately available to beneficiaries.
Policy provisions, riders, costs and eligibility vary.
That's why the actual contract matters more than a marketing phrase.
Questions Worth Asking
- Does my existing policy contain living-benefit provisions?
- What events qualify?
- How is eligibility determined?
- What happens to my death benefit if I use the feature?
- Are there costs or limitations?
GEMACE Perspective
Don't simply ask: "Does this policy have living benefits?"
Ask: "How do the living benefits actually work?"
Understanding the difference can matter.
You don't have to become an insurance expert. But you should understand enough to ask better questions, recognize what matters and make more informed decisions.
How Does This Fit Into Your Life?
GEMACE LifeMap™ begins with your family, responsibilities, goals, concerns and what you're already counting on before discussing possible solutions.
You don't have to become an insurance expert. But you should understand enough to ask better questions, recognize what matters and make more informed decisions.
Educational Information
This material is provided for general educational purposes only and is not intended as individualized insurance, financial, investment, tax or legal advice. Individual circumstances vary. Insurance products, features, availability, eligibility, costs and policy provisions vary by insurer, product and applicant. Review actual policy documents and consult appropriately licensed or qualified professionals regarding your individual circumstances.