Most people understand that the real benefits of life insurance occur after you die. However, life insurance carries some benefits while living, too. Policies may have additional riders to provide extra coverage before death. The team at Medical Profiles Inc is here to talk about the living benefits of life insurance in Houston, TX.
What Are Living Benefits for Life Insurance?
Living benefits for life insurance are additional riders that life insurance companies sell to enhance term life insurance and permanent life insurance policies. Living benefits, or accelerated benefits, provide benefits while the policyholder is still alive.
Living benefits are a good addition because they allow people to settle their affairs before they pass away. A trade-off of accelerated benefits is they lower the final death benefit your beneficiaries receive.
Below are some of the most common types of living benefits for life insurance in Houston, TX.
Terminal Illness
A terminal illness rider will allow you to access the death benefit to pay for end-of-life care and other costs. Many life insurance policies already include a terminal illness rider as a basic element of the policy. Generally, you must have a life expectancy diagnosis of six months to two years, though the exact life expectancy depends on the specific policy and insurer.
Chronic Illness
Chronic illness riders allow accessing death benefits to pay for chronic conditions that affect your daily living. Each insurance company typically has defined living activities that determine whether you are eligible to use the chronic illness rider.
Critical Illness
Critical illness riders let you use the death benefit to pay for care related to critical issues that shorten your life expectancy. For example, you can use a critical illness rider to pay for care related to a heart attack or stroke. Critical illness coverage is only valid for specific, named conditions.
Long-Term Care
With a long-term care rider, you can use death benefits for long-term care to help you through your day. Similar to chronic illness coverage, you must not be able to perform a certain number of defined daily living activities.
How Do Living Benefits Work?
Here is an example of how living benefits work:
- John is 40 years old and owns a $500,000 20-year term life insurance policy that he pays $50 a month for. Ten years later, John suffers a heart attack and asks his life insurance to access $250,000 of the policy. If they accept, the remaining death benefits will be $250,000.
How Much Do Living Benefits Cost?
The cost of living benefits depends on the kind of life insurance policy you have. Some life insurance companies automatically include riders on specific policies. Generally, riders cost an additional monthly premium on top of regular monthly payments for the policy. You can ask your insurance company about any riders they offer.
Are Living Benefits for Life Insurance Worth It?
As average age expectancy rises, people are living and working longer. Medical advances also mean that people are living longer after critical illnesses and sicknesses. Medical science has made it so many people can continue their lives with some semblance of normalcy.
However, medical costs for procedures, treatment, and care can be high. Living benefits for life insurance provide an outlet for financial relief as you set your affairs in order. Living benefits for life insurance in Houston, TX, can protect your family and cover unexpected end-of-life costs.
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