In recent years life insurance has changed dramatically for the better. In certain circumstances, you can access your death benefit while you are alive! You heard that right. In the event of a qualifying illness, a portion of your benefit amount can be advanced to you, so that you can use it while you are still living. 

We call this policy feature a “Living Benefit.” Often, there is no additional cost associated with these living benefits; they are built right into the policy. You can use the money to offset medical bills, replace lost income from missed work, or any other needs you and your family might have. 

With Living Benefits, life insurance protects not only your family, but it protects you as well. It’s a win-win. 

Let’s take a look at the (3) most common types of Living Benefits and the events that might trigger them: 

Chronic Illness 

This is commonly defined as a chronic illness that is not recoverable and the individual is unable to perform 2 out of the 6 “activities of daily living” or has a cognitive impairment such as Alzheimer’s or dementia. The 6 “activities of daily living” (or ADL’s) are defined as follows:  

• Bathing: the ability to clean oneself and perform grooming activities like shaving and brushing teeth. 
• Dressing: the ability to get dressed by oneself without struggling with buttons and zippers. 
• Eating: The ability to feed oneself. 
• Transferring: being able to either walk or move oneself from a bed to a wheelchair and back again. 
• Toileting: the ability to get on and off the toilet. 
• Continence: The ability to control one’s bladder and bowel functions. 

If you are unable to perform at least 2 of these 6 activities, you could qualify to use your life insurance Living Benefit. Most companies will accelerate up to 24% per year, meaning a $1,000,000 policy could yield your family up to $240,000 a year in the event of a chronic illness. Talk about peace of mind! (The net amount that you receive may differ based on the companies policy and contract terms, but the bottom line is that you will have access to benefits while you’re alive!) 

Critical Illness 

What if you’re not chronically ill, but have an acute illness? Here is a list of some major acute illnesses: 

• Invasive metastatic cancer 
• Major Burns 
• Stroke 
• Coma 
• Major Heart Attack 
• Aplastic Anemia 
• End-Stage Renal Failure 
• Benign Brain Tumor 
• Major Organ Transplant 
• Aortic Aneurysm 
• ALS (Amyotrophic Lateral Sclerosis) 
• Heart Valve Replacement 
• Blindness due to Diabetes 
• Coronary Artery Bypass Graft Surgery 
• Critical Illness Paralysis of two or more Limbs 

If one of these situations occurs you may be entitled to access your death benefit. Some companies will accelerate your death benefit up to 90 or even 100%! (The net amount that you receive may differ based on the companies policy and contract terms, but the bottom line is that you will have access to benefits while you’re alive!) 

Terminal Illness 

Terminal Illness is commonly defined as having less than 24 months to live. In this case, you may be able to receive up to 90 or even 100% of your death benefit. (Like the Critical Illness and Chronic Illness Living Benefit, the net amount you receive may differ based on the company policy and contract terms. However, this is a good guideline).