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Frequently Asked Questions
Common Questions Answered about Living Benefits for your convenience.
What Are Living Benefits
Living benefits allow policyholders to access a portion of their life insurance policy's death benefit while still alive. This feature is particularly useful in cases of serious illness or injury, providing financial support during critical times.
How Do Living Benefits Work?
Policyholders may activate living benefits when diagnosed with a qualifying condition, such as cancer, heart attack, or stroke. For example, a policyholder with a $405,000 life insurance policy diagnosed with stage 3 cancer could access up to $343,000, tax-free, to cover medical expenses and lost income.
What is the Financial Flexibility of Living Benefits
Living benefits provide immediate cash flow to cover medical bills and living expenses. Unlike traditional life insurance policies, which do not offer early access to benefits, living benefits enhance the value of life insurance by providing financial security when it’s needed most.
Why Insurance Companies Offer Living Benefits?
Insurance companies use a formula to determine the offer based on the present value of the future death benefit and the severity of the illness. This ensures that the company remains financially stable while providing valuable options to policyholders. Offering living benefits helps insurance companies sell more policies by providing added value to clients.
What is the Importance of Living Benefits
Living benefits may be included at no extra cost. They provide essential financial support during challenging times, allowing policyholders to focus on recovery. If you currently have a traditional life insurance policy without living benefits, consider upgrading to a policy that includes these essential features.
Who are living benefits for?
Living benefits are designed for individuals facing serious health challenges, providing access to life insurance funds while still alive. They are particularly valuable for those with chronic illnesses, families with dependents, and individuals planning for retirement. Caregivers can also benefit by covering caregiving costs, while health-conscious individuals and those in high-risk jobs gain peace of mind against unexpected health issues. Ultimately, living benefits enhance financial security and alleviate stress during difficult times.
