Is a living benefits rider a good idea?

If you're diagnosed with a terminal illness or need to move to a nursing home, it's important to make sure you and your family are prepared. A living benefit rider can offer extra peace of mind, whether or not you end up needing it. Some life insurance companies are starting to offer living benefits at no extra cost. Be sure to ask one of our agents about the options for your policy.

What will I receive from my living benefits life insurance rider?

Most living benefit riders will pay out benefits if you’ve been diagnosed with a critical illness, chronic illness, or terminal illness. They’ll need to see proof of your diagnosis before making the payment. If you become ill, your insurance company can typically offer anywhere from 25% to 100% of your death benefit as a tax-free cash payment. Any remaining money will still go to your loved ones after you pass away while the policy is in effect.

How much will my living benefits rider cost?

The cost of a living benefit rider depends on the provider. Some life insurance companies include living benefits in their standard policy premiums, so you don't need to pay anything extra for this benefit. Your premium is typically based on a number of factors, like your age, health, and pre-existing conditions, and you may need to take a medical exam. Other companies charge extra to add a living benefit rider to your insurance plan. Our agents can help you understand the cost of your specific rider when you choose your policy.

How much living benefit life insurance coverage do I need?

The right amount of coverage depends on your unique circumstances. To determine the best coverage level for your living benefit rider, start by asking yourself the following questions: What do you need the rider to do? Are you adding it just in case, or do you have serious concerns about your health? How many beneficiaries do you want to cover and what expenses do they have? What can you afford to pay, based on your current income? Do you need to pay a mortgage or any other debts, such as credit cards or college loans? What medical bills and end-of-life expenses do you need to consider? Do you have any other types of life insurance? How much money do you currently have in savings?

Can I use a living benefits rider more than once?

Generally, you may make only a single claim on your living benefits rider. After you take money out of your policy to support your condition, your insurer will reduce the death benefit or the cash surrender value accordingly.

Living benefit rider

Living benefit riders let you access your life insurance funds immediately if you’re diagnosed with a serious health condition covered by your rider, helping to cover you and your family’s expenses.

What are living benefit riders?

Finding a life insurance policy is one of the most crucial steps in planning for your family’s financial future. No policy is one-size-fits-all, which is why most insurers offer life insurance riders. These are optional features you can add to your life insurance to help personalize your coverage.

One of the most common riders is the living benefit rider, also known as accelerated death benefit riders or accelerated benefit riders. Living benefit riders let you access your life insurance funds immediately if you’re diagnosed with a serious health condition covered by your rider, helping to cover you and your family’s expenses. Here’s what you need to know about supplementing your whole or term life insurance with a living benefit rider.

Understanding life insurance with living benefits

Serious health conditions can affect your ability to work and put financial pressure on your family. The living benefit rider is designed to help you get through tough times by paying out some or all of the death benefit, right when you and your loved ones need it. You can use the payment as extra income or for any medical expenses, debts, or end-of-life costs.

You can add living benefit riders to a new life insurance plan, or it may be possible to add them to your current policy. While adding a rider comes with an additional cost, the protection it provides can make a big difference when you need it.

The different types of living benefits insurance riders

Living benefits insurance riders can pay for certain end-of-life expenses. Some of these riders may be included at no added charge, while others require a premium. There are various living benefit riders, but here are some of the common ones:

Terminal illness riders: Also called an accelerated death benefit rider, a terminal illness rider may be included in your policy for free or at a low cost. A terminal illness rider lets you access an advance on your policy in a situation where recovery from an illness is unlikely.
Chronic illness riders: With a chronic illness rider, you can pay for long-term care and other costs if you’re diagnosed with a chronic illness. However, the rider must be active before you’re diagnosed.

Benefits of living benefits insurance riders

Adding a living benefit rider to a policy is easy, convenient, and affordable for many policyholders. With an accelerated benefit rider, you can:

Access funds while you're still living

Access funds while you're still living
Create a customized life insurance policy

Create a customized life insurance policy
Add riders to a new or existing life insurance policy

Add riders to a new or existing life insurance policy

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How much living benefits insurance do I need?

The ideal amount of whole or term life insurance – including living benefits – is different for everyone. When considering your needs, think about all your financial obligations. If you were to pass away or could no longer provide any income to make ends meet, what would your loved ones still need to pay off? For most families, this includes:

Debts like mortgages, credit cards, and college loans
Expenses for your children or other dependents
Your medical bills and end-of-life expenses
An extra financial cushion to maintain the same quality of life

You’ll want enough combined coverage to help your family meet these needs if you become terminally ill or die suddenly. Write down these expenses and give us a call – we’re happy to help you figure out the right amount of insurance to support your family.