Life insurance is often associated with the protection it provides for loved ones after the policyholder’s death. However, it can also benefit the policyholder during their lifetime through living benefits, which are game-changers in financial planning.
What Are Living Benefits? Living benefits are built into some life insurance policies, allowing the policyholder to accelerate part or all of the death benefit in case of a qualifying event during their lifetime. Events that can trigger these benefits include:
Critical Illness: If diagnosed with a critical illness like cancer, a heart attack, or a stroke, you can receive a lump sum from the life insurance policy to cover medical bills, treatment costs, or other expenses.
Chronic Illness: For chronic illnesses requiring long-term care, periodic payments or a lump sum can be used for health care, home modifications, or professional caregiving services.
Terminal Illness: In the case of a terminal illness, benefits can help cover end-of-life care, hospice services, or fulfilling last wishes.
Financial Flexibility with Living Benefits: Living benefits provide financial flexibility, enabling you to use your life insurance policy as a resource during life’s difficulties. They facilitate recovery and reduce the strain that financial difficulties can place on individuals.
Asset Preservation: Living benefits help preserve assets and savings, ensuring that retirement funds and emergency savings remain intact during critical periods.
Peace of Mind: Living benefits offer peace of mind, knowing that your life insurance policy can be a financial source of security when you need it most. Most living benefits are tax-free, providing an extra hedge against expenses without additional tax burdens.
Are Living Benefits Right for You? Assess your health history, coverage needs, and the type of policy you have to determine if living benefits suit you. Discuss with your insurance advisor to find the best living benefits riders for your comprehensive needs. Integrating living benefits into your financial plan provides peace of mind, allowing you to focus on your health and well-being.
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