Does Life Insurance Cover Medical Bills?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Does Life Insurance Cover Medical Bills?

Life insurance is primarily designed to provide financial support to your beneficiaries after your death. It does not typically cover medical bills incurred during your lifetime. However, there are some aspects to consider:

  1. Death Benefit: The primary function of life insurance is to provide a death benefit to your beneficiaries. This benefit is a lump sum payment made upon your death.
  2. Terminal Illness Riders: Some life insurance policies include a terminal illness rider, allowing you to access a portion of the death benefit if you are diagnosed with a terminal illness. This can indirectly help pay medical bills.
  3. Living Benefits: Certain types of life insurance, like whole life or universal life, may accumulate cash value over time. You can borrow against this cash value to cover expenses, including medical bills.
  4. Final Expenses: Life insurance can cover final expenses, which may include medical bills incurred immediately before death, but this is typically a small portion of the overall benefit.
Does Life Insurance Cover Hospital Bills

Examples of Life Insurance Not Covering Medical Bills

  1. Regular Hospitalization: If you are hospitalized for a non-terminal illness or injury, life insurance does not cover these costs.
  2. Ongoing Medical Treatment: Costs for ongoing treatments, such as chemotherapy, are not covered by life insurance.

Life Insurance Coverage

FeatureCovers Medical Bills?Notes
Death BenefitNoPaid to beneficiaries after death
Terminal Illness RiderIndirectlyCan be used for medical bills
Living BenefitsYesIf policy accumulates cash value
Final ExpensesPartiallyMay cover immediate pre-death medical bills
Can Medicaid Take Your Life Insurance


Life insurance is not a direct means to cover medical bills, with the exception of situations involving terminal illness riders or living benefits from certain policy types. It is crucial to understand the specific terms of your policy. For more detailed information and to discuss your unique needs, contact us today for a free quote.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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