About Living Benefits

Historically, life insurance was purchased solely to provide death benefit protection for surviving family members immediately following the death of a loved one. A living benefit, called an accelerated death benefit rider, is provided at no additional cost to the holder of the life insurance policy. The living benefit enables the policyholder to receive a partial or full cash advance against the death benefit in the event he or she is diagnosed with a qualified medical condition, such as a chronic, critical, or terminal illness. The insured is allowed to receive a partial or full cash advance of the living benefit as a result of:

A chronic illness which renders him or her incapable of performing two out of six normal living activities including bathing, continence, dressing, eating, toileting, and transferring. 

A diagnosis of a critical illness, such as:

  • heart attack,
  • stroke, 
  • invasive cancer, 
  • end-stage renal failure,
  • major organ transplant, 
  • ALS, 
  • blindness,
  • paralysis, 
  • arterial aneurysms, 
  • central nervous system tumors, 
  • major multi-system trauma (major injury to three or more organs or systems), 
  • AIDS, 
  • severe disease of any organ (resulting ins significantly altered life expectancy), 
  • severe central nervous system disease (Parkinson's, Huntington's, Multiple Sclerosis, Encephalitis with long-term effects), 
  • major burns (<40% BSA, 3rd degree), or the
  • loss of limbs.

A diagnosis of a terminal Illness, such as an illness or condition that is expected to result in death within 24 months or less.

What is a Living Benefit to a business?

A living benefit enables a business to move forward even during a significant life event to an owner such as the diagnosis of a chronic, critical, or terminal illness. As policyholder and beneficiary, a business may use the cash advance against the death benefit of the policy to cover immediate business expenses. This may include: salary replacement during the key person's recovery, recruitment, training and compensation of a new employee, lost revenue, or, if necessary, to pay off debts, distribute money to investors, pay severance to employees, and close down the business in an orderly manner. A living benefit also gives investors, employees, creditors, clients and customers confidence regarding the viability of the business, and can give options other than immediate bankruptcy. 

Does your current life insurance policy:

  • Offer accelerated benefit options for terminal illness?
  • Offer accelerated benefit options for critical illness?
  • Offer accelerated benefit options for chronic illness?
  • Offer to continue paying premiums automatically during a disability?
  • Offer a stream of income that may supplement retirement income?
  • Offer an option to increase in value as your annual income or net worth increases?

If you answered "no" to any of these questions, we would love to provide you a Living Benefit Review at no cost .