Short answer: Living benefits are policy features, usually called accelerated death benefit riders, that let you access part of your life insurance death benefit early if you're diagnosed with a qualifying terminal, chronic or critical illness. The money goes to you, while you're alive, to use however you need.
Why living benefits matter
Most people think of life insurance as something that only pays after you're gone. But a serious illness can hit a family's finances long before that. Lost income, travel for treatment, and bills that health insurance doesn't cover add up fast.
Living benefits turn your life insurance into a tool you might use during the hardest stretch of your life, not just after it.
The three common types
Terminal illness rider. Lets you access part of the death benefit if a doctor certifies a life expectancy of generally 12 to 24 months or less, depending on the policy.
Chronic illness rider. Pays if you can't perform a set number of activities of daily living (like bathing, dressing or eating) or have a severe cognitive impairment.
Critical illness rider. Pays after a qualifying event such as a heart attack, stroke or certain cancers. The covered list varies by carrier.
How the money works
- Whatever you accelerate reduces the death benefit your beneficiaries receive.
- Some carriers include these riders at no upfront cost and apply a discount when you use them; others charge a premium for the rider.
- In many cases, accelerated benefits receive favorable tax treatment, but rules vary. Check with a tax professional.
What to ask before you buy
- Which riders are included, and which cost extra?
- How is the payout calculated if I use the rider?
- Is there a maximum amount or percentage I can access?
- What illnesses or conditions qualify?
Term or permanent?
Living benefit riders are available on many term, whole life and IUL policies. The right fit depends on your budget, how long you need coverage, and whether you want cash value.
Have a question before you call?
Start with Jarvis, a free AI concierge open to the general public, and get answers in plain English. You can ask which riders a policy might include before you ever talk to anyone, no download needed. When you're ready, a licensed Moving Mountains advisor takes it from there. Prefer a person right away? Call (813) 739-9877.
