You probably may have heard of the term “death benefits” and conclude that the advantages of life insurance only applies when death occurs, we’ll have to burst your bubble there. So, what living benefits are there in life insurance?
Generally, life insurance benefits your loved ones after your passing, it can also avail them (and you) before the inevitable arrives. The benefits enjoyed herein is what is known as the living benefits of life insurance.
While the basic understanding of life insurance benefits is how it can financially protect your loved ones before the inevitable happens, here are the benefits of life insurance while you’re still living.
The Living Benefits of Life Insurance
The Living benefits of life insurance refer to the cash advantages available to the insured after making premiums over a specific period. The cash value and endowments proceed that come with your life insurance are considered living benefits. Since, in contrast to a death benefit, that you can only get when the insured passes away, you can use the money while you’re alive.
Living benefits for Term Life
Term life insurance provides coverage for a fixed period or term. Your beneficiary will be the proceeds of your policy if you pass away during the period covered.
Term life living benefits
Accelerated death benefits: This means that a portion of your term life policy will be paid should you ever face terminal illness. This can be used to cover medical expenses, debt incurred and others. The following should be kept in mind concerning this living benefit:
Life expectancy for when the cash can be accessed will vary according to different insurers.
Your policy may need to be in force within a certain period before the living benefit is accessed.
Return of premium. In this living benefit, you will receive all the premiums you made the term provided you didn’t pass away during its running.
Permanent Life Living benefits
Just like term life insurance, this life insurance type has a death benefit, along with the plus of accumulating cash value that is usually tax-deferred.
You have access to needed funds throughout your lifetime with permanent life insurance in these ways.