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  • Writer's pictureMichael Andrews

The Modern Take on Traditional Life Insurance: Understanding Living Benefits

When it comes to life insurance, traditional policies often only cover death benefits. Policyholders pay premiums and their beneficiaries receive the payout when they pass away. However, in recent years, the insurance industry has evolved to provide policyholders with more comprehensive coverage that includes living benefits. In this article, we'll explore living benefits in more detail and provide critical analysis to help readers make informed decisions.

What Are Living Benefits?

Living benefits are a type of coverage that allows policyholders to access a portion of their death benefit while they are still alive. The payout can be used to cover costs such as medical bills, mortgage payments, food, extra care, alternative treatments, or anything else policyholders may need while going through a medical condition.

Living benefits are designed to help those who face financial challenges while dealing with a medical condition. In the US, over 800,000 people suffer from a heart attack every year, and while some survive, they may struggle to pay for medical treatment and other expenses afterward. Living benefits can provide the necessary financial assistance in such cases.

How to Qualify for Living Benefits?

To qualify for living benefits, policyholders need to have a policy that offers an accelerated benefit rider. An accelerated benefit rider allows policyholders to accelerate their death benefit if they are diagnosed with a terminal condition, chronic condition, or critical condition.

A terminal condition is where the doctor expects the policyholder to die within the next 12 to 24 months. A chronic condition is where the policyholder cannot perform two out of the six activities of daily living, including bathing, dressing, eating, transferring, toileting, and continence. A critical condition includes heart attack, stroke, invasive cancer, major organ failure, etc... See Michael Andrews for additional details as these vary based on the State you reside in and Insurance Carriers.

If a policyholder meets any of these qualifying medical conditions, they can file a claim against their death benefit and receive a lump-sum payout. The policyholder does not need to pay the money back, and the money can be used for anything they need.

Living Benefits vs. Cash Value

It's important to note that living benefits and cash value are not the same things. Cash value is a feature of permanent life insurance policies and refers to the amount of money that accumulates over time as premiums are paid. While policyholders can access the cash value, they may need to let it accumulate for years before using it.

On the other hand, living benefits can be accessed within as little as 30 days of owning the policy if the policyholder meets the qualifying medical conditions. Policyholders don't need to accumulate a certain amount of funds in the policy to access living benefits.

Potential Drawbacks of Living Benefits

While living benefits can provide valuable financial assistance to policyholders dealing with medical conditions, it's important to consider some potential drawbacks. For example, some policies may have restrictions on how policyholders can use the living benefits payout, or the payout may be subject to income tax. Additionally, living benefits may not provide as much coverage as a separate disability insurance policy, which may be more appropriate for some individuals. Contact Michael Andrews for details of your specific situation.


Living benefits offer a new modern take on traditional life insurance, providing policyholders with more comprehensive coverage that includes living benefits. By qualifying for an accelerated benefit rider, policyholders can access a lump-sum payout without needing to repay the money. However, it's important to consider the potential drawbacks of living benefits and determine whether they are the best option for your needs.

Contact Insurance Expert Michael Andrews

If you are interested in learning more about living benefits and how they can benefit you, contact Insurance Expert Michael Andrews. With over 18 years of experience in this industry, Michael is well qualified to provide you with expert advice and guidance to help you make the best decisions for your needs. Call 1-800-882-6920 to speak with Michael today.

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