Understanding Insurance Living Benefits

Shawn Plummer

CEO, The Annuity Expert

What are Living Benefits?

Living benefits are features of an insurance policy that offer financial assistance during the policyholder’s lifetime, especially in times of medical crises or chronic illness. These benefits can provide a safety net, ensuring financial stability when it’s needed most.

What Are Living Benefits

Types of Living Benefits

  1. Accelerated Death Benefits (ADB): Allows you to access part of your death benefit if you’re diagnosed with a terminal illness.
  2. Critical Illness Benefits: Offers a lump-sum payment if you’re diagnosed with specific critical illnesses like cancer or heart attack.
  3. Long-Term Care Benefits: Provides coverage for expenses related to long-term care services, either at home or in a facility.
  4. Disability Waiver of Premium: Waives policy premiums if you become disabled and unable to work.

Real-Life Scenarios

  • Scenario 1: John, diagnosed with terminal cancer, accessed his ADB to cover his medical expenses, easing his family’s financial burden.
  • Scenario 2: Emily received a lump-sum payment after her heart attack diagnosis, which helped her manage her treatment costs without draining her savings.

Navigating the Process

  1. Policy Review: Understand the specifics of your policy’s living benefits.
  2. Consultation: Talk to your insurance advisor for clarity and guidance.
  3. Application: Submit necessary medical documents and application for benefit access.
  4. Utilization: Strategically use the funds to cover essential expenses.
Types Of Living Benefits

Living Benefits At a Glance

Benefit TypePurposeEligibility Criteria
Accelerated DeathMedical expenses, end-of-life careTerminal illness diagnosis
Critical IllnessLump-sum for critical illnessDiagnosis of covered illness
Long-Term CareHome or facility care costsInability to perform daily activities
Diagnosis of a covered illnessPremium relief during disabilityCertified long-term disability

Types Of Insurance That Offer Living Benefits

Living benefits are available in various types of insurance policies, each serving a unique purpose to provide financial support during the policyholder’s lifetime, especially in challenging situations. Here are the key types of insurance that often include living benefits:

  1. Life Insurance:
    • Term Life Insurance: Some term life policies offer living benefits as riders. These might include accelerated death benefits for terminal illness or critical illness benefits.
    • Whole Life Insurance: Whole life policies often include living benefits like accelerated death benefits, and some may offer options for cash value loans or withdrawals.
    • Universal Life Insurance: Similar to whole life, universal life insurance can provide living benefits along with flexible premium and death benefit options.
  2. Health Insurance:
    • Critical Illness Insurance: Specifically designed to provide a lump-sum payment if you are diagnosed with a listed critical illness like cancer, heart attack, or stroke.
    • Long-Term Care Insurance: Focuses on covering costs associated with long-term care services, whether in-home care or care in a specialized facility.
  3. Disability Insurance:
    • Short-Term and Long-Term Disability Insurance: These policies provide income replacement if you’re unable to work due to a disability. The living benefit here is the regular income stream during the disability period.
  4. Annuities:
    • Fixed and Variable Annuities: Some annuities offer living benefits in the form of guaranteed income streams or withdrawals, which can be valuable for retirement planning.
  5. Riders and Add-Ons:
    • Many insurance policies allow for additional coverage options or riders that can enhance the living benefits. Examples include waiver of premium riders in case of disability, long-term care riders, or chronic illness riders.


Living benefits in insurance policies are not just about the payout after a policyholder’s death but also about providing financial support when life throws unexpected challenges. Understanding these benefits can be a game-changer, offering peace of mind and financial security when it’s needed most. With the right knowledge and planning, you can leverage these benefits to safeguard your and your family’s future. Contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, 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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