While every adult American can benefit from having a life insurance policy, only about 60% of people have one. There are additional benefits with life insurance that aren’t as well known to people who don’t have these benefits. You can even get life insurance with living benefits to ensure that the benefits of a life insurance policy aren’t lost on the living near the end.
Here are 4 things you need to know about life insurance with living benefits
1. Not Available Everywhere
A live insurance policy with living benefits can be a major selling point of a policy. However, these types of policies aren’t available everywhere. Getting a living benefits rider will depend on which state you live in or who your policy provider is.
These types of policies can be powerful in times of crisis or when you find that you haven’t calculated your financial need well enough.
With these types of policies, you can get a policy payout previous to the release of death benefits. One of the most common reasons for offering these payouts is when the insured has a life expectancy of less than a year. Another reason is if the policy payment would be required to give the insured the most dignified and comfortable remaining time left alive.
2. Helpful With Medical Bills
When people are going through a difficult terminal illness, they may be faced with insurmountable medical bills. When dealing with the struggle of being terminally ill, the last thing to have to worry about is high medical bills. If there’s not enough money to cover them and there isn’t much time left, living benefits can be given out in advance of death.
Even if you’ve got a great policy, often the money in them is considered to be “off limits” until death. Living benefits allow the insured to bend the rules and get part of an eligible policy released in advance.
3. Funding is Better Than a Policy Loan
When a life insurance policy releases money, it is most often given via a policy loan that will have a rate relative to what’s left in the account. In other cases, there might be a condition of policy surrender that’s required for release of the funds.
Thankfully, with living benefits, this isn’t usually the case. They can provide more by giving out payments that are based on the policy’s face value.
Be mindful that this money can usually only be released once.
4. Can Be Added To New Or Existing Policies
Adding living benefits is often possible with existing policies. If you didn’t add this element to a policy when you bought it, you might be able to add this benefit for a fee.
If you elect to add living benefits, you only need to submit proof of a terminal illness.
Life Insurance With Living Benefits is a Smart Move
If you’re in the market for a life insurance policy, buying one with living benefits is a just plain smart idea. Life insurance with living benefits ensures that no matter what happens near the end of life, no one is left without the basic comforts owed to them.
If life insurance is a big part of your financial future, check out our guide to ensure your retirement is as healthy as it can be.