Beyond Death Benefits: How Living Benefits Can Transform Your Life Insurance
January 7, 2025
All too often, life insurance is associated with the death benefit that family members receive upon the passing of the policyholder. While it’s true that life insurance delivers financial security to beneficiaries, it’s important to keep in mind that life insurance can also be used throughout the policyholder’s lifetime.
A living benefits rider can be advantageous for policyholders who would like to access a portion of their death benefit so they have the financial support they need when they need it most. Our dedicated, reliable team at 1891 Financial Life sells a wide variety of life insurance policies, each with a living benefits rider automatically included. This added layer of protection can help ease financial burdens should a health crisis arise at any stage of life.
What Is a Living Benefits Rider?
You can think of a rider as an add-on to your life insurance policy. A living benefits rider, specifically, essentially gives you access to your life insurance policy’s death benefit while you are still alive. Think of it as receiving part of your death benefit early due to circumstances related to your health.
Living benefits can be obtained if you have been diagnosed with a serious illness or chronic condition or have received a terminal diagnosis. The money you receive from living benefits can help you pay for surgeries and other medical expenses, such as medications, hospital stays, and in-home care. If your health is in decline, living benefits afford you the important opportunity to focus on your recovery or care.
Addressing the Misconception
A common misconception concerning life insurance is that it has a singular purpose: to provide for the policyholder’s beneficiaries upon the policyholder’s death. In reality, a policyholder experiencing health challenges has the option to utilize the living benefits rider to withdraw funds from the policy to alleviate financial stresses.
Receiving an unexpected diagnosis, encountering long-term health issues, or suffering a major medical emergency can cause medical bills to accrue quickly. Living benefits make health expenses more affordable during an already overwhelming time.
Advantages of Living Benefits in Life Insurance
One of the biggest advantages of living benefits within an insurance policy is the financial flexibility this rider offers. There’s comfort in knowing that you’ll have the financial backup you need if your health and quality of life become compromised. Also, should you not have to use your living benefits, your beneficiaries can expect to receive your policy’s tax-free death benefit in full.
How To Use Living Benefits
If you think you may be eligible to receive living benefits from your life insurance policy, talk to your trusted life insurance agent, who can carefully review your policy to ensure that you meet the requirements and criteria. If you do, then you can begin the process of initiating a claim.
Because life insurance policies can be customized, keep in mind that the amount of living benefits funds that become available to you will depend on the terms and conditions of your policy.
It’s also worth noting that the funds you use from your living benefits will reduce or potentially deplete the overall death benefit that your beneficiaries will receive. Consult with your trusted insurance agent to review policy specifics and, if necessary, make modifications.
Explore the Advantages of Living Benefits
Living benefits enhance the overall value of insurance policies. Even if you are currently in good health, a living benefits rider can give you peace of mind throughout the rest of your life.
At 1891 Financial Life, we’re passionate about tailoring your life insurance policy so it addresses both your current and future financial needs. Contact us today to learn more about the terms of your life insurance policy or to establish an insurance policy that includes a living benefits rider. Taking this forward-thinking approach can help you feel empowered as you age.
About 1891 Financial Life
Our culture is about looking out — for you, for others, for family, for the community. That is how we go “Beyond Life Insurance.”
At 1891 Financial Life, we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. In 2023, 1891 Financial Life was listed by Forbes as one of "The World's Best Life Insurance Companies."
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.