Is Life Insurance with Living Benefits Worth It?
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Life insurance with living benefits are policies that include features you can access while you’re alive. These features can give you extra financial support, and there are two common types of living benefits.
A living life insurance policy rider is an add-on that you can use to get extra benefits. For example, some riders let you access some or all of your policy’s death benefit if you’re diagnosed with a serious illness, like cancer. You can then use those funds to access the care that you need.
Long-term care riders are also common. This type of rider will pay out part of the death benefit to help cover the costs of long-term care. You can use those funds to cover expenses that your insurance won’t cover.
Other riders include a return-of-premium and waiver of premium rider. With a return-of-premium rider, if you outlive your policy term, you’ll receive a refund for some or all of your premiums. A waiver of premium rider lets you keep your policy while suspending your premium payments if you become disabled and are no longer able to work.
These life insurance policy riders each offer different types of support, and they can provide valuable financial help if you experience unexpected life events, like an illness diagnosis. You can add the riders onto a life insurance policy, but you’ll pay more for them. Many riders that pay out money to you while you’re alive will take the funds from your death benefit, so your loved ones will receive a smaller benefit when you pass away.
What are the living benefits of whole life insurance? Permanent or whole life insurance policies usually feature a cash value component. You can access that cash value while you’re alive through a policy loan or withdrawal, and your life insurance policy becomes a financial support.
Living benefits life insurance can help you navigate tough financial times. Between insurance riders and cash value components, there are several different ways that you can use your life insurance even while you’re still alive.
However, if you access your insurance benefit, that will leave your beneficiaries with less or even no benefit. These riders and whole life insurance policies also cost more than other types of life insurance, so you’ll need to carefully weigh whether buying these products makes financial sense.
Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
