Living Benefits in Life Insurance
Life Insurance Isn't Only About Dying
What if a serious illness changed your ability to work and provide for your family?
Life insurance is traditionally designed to provide a death benefit to your beneficiaries when you die. But many life insurance policies may also offer Accelerated Benefit Riders (ABRs)—often called Living Benefits—that may allow you to access a portion of your death benefit while you're alive after a qualifying event. Depending on the insurance company and policy, certain ABRs may be included at no additional rider premium.
What You'll Learn on This Page
We'll explain:
✓ What Accelerated Benefit Riders (ABRs) are
✓ The different types of Living Benefits that may be available
✓ What can trigger a benefit
✓ How the benefit may be calculated
✓ How accessing a benefit can affect your death benefit
✓ How to find out what your current policy actually includes
Important: Living Benefits are not identical from one insurance company or policy to another. A policy may include all, some, or none of the benefits described below. Carriers may also use different rider names, definitions, qualifying conditions, benefit calculations, and limitations.
What Are Accelerated Benefit Riders?
An Accelerated Benefit Rider (ABR) is a life insurance rider that may allow the insured to receive a portion of the policy's death benefit before death after experiencing a qualifying event defined by the policy. Instead of the entire benefit being available only after death:
Life Insurance Death Benefit
Qualifying Event Occurs
Policyholder may qualify to accelerate a portion of the death benefit
Money Is Available While Living
Accelerating benefits generally reduces the death benefit available to beneficiaries and may also affect other policy values.
Living Benefits That May Be Available
Different insurance companies structure their Living Benefits differently. Depending on the policy, you may see riders covering:
Critical Illness
When a serious medical event changes your life. Certain policies may provide an accelerated benefit following specifically defined critical illnesses. Depending on the carrier and rider, covered conditions could include specified events such as:
Cancer • Heart Attack • Stroke and potentially other conditions specifically listed by the policy. Having a diagnosis alone does not necessarily guarantee a benefit. The illness must meet the rider's specific definition and requirements.
Chronic Illness
When you need substantial help with everyday activities. Certain policies may provide benefits when the insured meets the policy's definition of a qualifying chronic illness. Qualification may involve being unable to perform a specified number of Activities of Daily Living (ADLs) without substantial assistance. These commonly include: Bathing • Dressing • Eating • Toileting • Transferring • Continence Certain policies may also include qualification based on severe cognitive impairment. The exact requirements, duration requirements, certification requirements, and benefit amounts depend on the policy.
Terminal Illness
When you're diagnosed with a qualifying terminal condition. Certain policies may allow you to accelerate a portion of the death benefit following a qualifying terminal illness. The required life expectancy can differ by carrier, policy, rider, and state. This benefit can provide financial flexibility at a time when the insured and family may be facing significant financial and personal decisions.
Your Policy May Have Other Living Benefits
Not Every Insurance Company Uses the Same Riders—or Even the Same Names.
Depending on the insurance company and policy, additional accelerated benefits may be available for other qualifying events, such as certain critical injuries, or carriers may categorize and name their benefits differently. That's why you should never assume: “My policy has Living Benefits, so I'm covered for everything.”
One policy might include: Terminal + Chronic
Another could offer: Terminal + Chronic + Critical Illness
Another may offer additional benefits. And another policy may have very limited Living Benefits.
The actual policy and rider provisions determine the coverage.
The Benefit Is Flexibility
What Could Living Benefits Help You With?
Instead of telling people they must use the money for medical bills, explain the flexibility carefully.
Depending on the benefit and policy provisions, funds received from an accelerated death benefit may provide resources for needs such as:
🏡 Keeping Up with Your Home
Help manage mortgage, rent, utilities, and other household expenses.
💵 Replacing Lost Income
Provide financial resources when an illness affects your ability to work.
👨👩👧 Supporting Your Family
Help with groceries, childcare, transportation, and everyday expenses.
💳 Protecting Your Savings
Additional resources may reduce the immediate need to rely entirely on personal savings during a qualifying event.
❤️ Focusing on What Matters
Financial flexibility can help families concentrate on their circumstances rather than only on the next bill.
Health insurance may help with medical expenses. Living benefits may help when an illness affects your income and everyday life.
See the Difference
🛡️ DEATH BENEFIT
You pass away
↓
Beneficiaries receive benefit
Protection for the people you leave behind.
❤️ LIVING BENEFITS
Diagnosed with a qualified illness
↓
Access portion of death benefits while alive
Protection that may help while you're still here.
Are These Living Benefits Really Included at No Extra Cost?
Sometimes but this needs an explanation.
Certain life insurance companies make specific Accelerated Benefit Riders available with eligible policies without an additional rider premium. That doesn't mean receiving the benefit is necessarily free. Depending on the rider, an accelerated benefit could involve: A discounted benefit amount • Administrative charges • Actuarial adjustments • Reductions to the death benefit • Reductions to other policy values The method varies by carrier and rider.
That's different from an optional premium rider.
Some policies also offer enhanced Chronic Care or Long-Term Care riders that require an additional premium or charge.
We cover those separately:
Premium Chronic Care
Long-Term Care (LTC)
This distinction is excellent for your website because you're educating consumers that an included ABR and a separately purchased LTC/chronic-care benefit aren't automatically the same thing.Imagine This...
You have life insurance to protect your family if you die. But what happens if you don't die? You survive a serious illness, but you can't work for months. Your paycheck may stop. But your family's life doesn't.
🏡 The mortgage is still due.
🛒 Your family still needs groceries.
🚗 The car payment continues.
💡 The lights still need to stay on.
👧 Your children still need to be cared for.
And now your spouse may even need to work less to take care of you.
This is the bigger picture.
Certain life insurance policies with living benefits may allow you to access a portion of your death benefit after a qualifying illness.
It's not just about paying medical bills. It's about helping your family keep going financially while you focus on getting through one of life's most difficult moments.
Eligibility, benefits, and qualifying conditions vary by policy. Accelerating benefits generally reduces the remaining death benefit.
Your Life Insurance Should Answer Two Questions
1. What happens to my family if I die?
That's your death benefit.
2. What happens to my family if I survive a serious illness but can't work?
That's where living benefits may become important.
A good life insurance conversation should consider both.
Living Benefits Are Not Health Insurance
Health insurance and life insurance serve different purposes.
Health insurance generally helps pay eligible healthcare expenses according to the health plan.
Life insurance living benefits may allow access to part of the death benefit after a qualifying event according to the life insurance policy.
You shouldn't think of one as replacing the other. They address different financial risks.
Does Your Policy Have Living Benefits?
Pull Out Your Current Life Insurance Policy.
Can you answer these questions?
Does it include accelerated death benefit riders?
Does it cover terminal illness?
Does it cover chronic illness?
Does it cover specified critical illnesses?
What triggers each benefit?
How much could potentially be accelerated?
What happens to your remaining death benefit?
If you don't know the answers, that's exactly why you should review your coverage.
We'll Help You Understand What You Already Have
Frequently Asked Questions
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Potentially. Certain policies include living benefit provisions that may allow access to part of the death benefit following a qualifying event.
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Certain policies include specified cancers under critical-illness provisions. Eligibility depends on the exact policy definition and severity or other requirements
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Some policies include specified heart attacks or strokes as qualifying critical-illness events. The policy's definition controls eligibility.
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Accelerated death benefits are not necessarily structured as reimbursement for specific medical bills. How benefits can be used depends on the policy and applicable rules.
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Generally, yes. Accelerating part of a death benefit typically reduces the amount remaining for beneficiaries and may affect other policy values.
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No. Features vary significantly by product, carrier, state, and policy
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There is no universal percentage. Available benefits depend on the policy, rider, qualifying event, contractual maximums, and other factors.
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Many policies include certain living benefits at no additional premium cost. However, some carriers, riders, or additional benefits may have a cost. Benefits and terms vary by policy.
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Generally, accelerated death benefits aren't loans that you simply repay. Instead, accessing a benefit typically reduces the death benefit remaining for your beneficiaries and may affect other policy values.
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You must experience an illness or condition that meets the specific definition in your policy and satisfy the carrier's claim requirements. A diagnosis alone doesn't necessarily guarantee eligibility.
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The policy may continue with a reduced death benefit and potentially adjusted policy values, depending on how much was accelerated and the terms of the contract.
Don't Wait Until You're Sick to Find Out What Your Life Insurance Covers.
The time to understand your coverage is before you need it.
Whether you already have life insurance or you're looking for a new policy, we'll help you understand the available options and what your coverage actually provides.
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