Traditional life insurance is designed to protect loved ones financially after the policyholder's death, but life insurance with living benefits takes this protection further. With living benefits, policyholders can access a portion of their death benefit during their lifetime if they experience a qualifying event, such as a terminal, chronic, or critical illness. This ensures financial support when it is needed most, helping individuals manage the high costs associated with health crises.
Living Benefits Coverage
Living benefits, also known as accelerated benefit riders (ABRs), are available at no additional cost with many life insurance policies. These riders can be activated in case of:
These benefits can provide tax-free payments that help ease the financial burden, allowing policyholders to focus on recovery rather than medical bills.
Financial Impact of Illness in the U.S.
The costs of managing chronic and critical illnesses are overwhelming for many Americans. According to the American Heart Association, the average lifetime cost for a heart attack is over $1 million. Cancer treatments in the U.S. average around $150,000 per year, depending on the type of cancer and treatment plan. Additionally, long-term care for chronic illnesses like Alzheimer's can cost over $80,000 annually, and those figures are expected to rise.
Health insurance often doesn't cover all the associated costs, such as non-medical expenses (e.g., home modifications, caregiving, and lost income). This is where living benefits from a life insurance policy can make a significant difference. They provide immediate cash that can be used flexibly, offering financial relief during challenging times.
New Riders for Expanded Protection
In response to growing health needs, some life insurance providers have expanded their offerings. For example, National Life Group now offers a rider specifically for Alzheimer’s Disease and Lewy Body Dementia, ensuring that policyholders facing these cognitive conditions receive additional support. Additionally, the new Fertility Journey Rider provides financial assistance for couples navigating fertility treatments, adding another layer of support.
A Valuable Addition to Life Insurance
Living benefits transform life insurance into a more versatile financial tool, providing peace of mind during a policyholder's life. By covering chronic and critical illness costs that can derail personal finances, these benefits offer a safety net. In a country where healthcare costs continue to rise, life insurance with living benefits can bridge the gap between health insurance and the true costs of major health events, ensuring that families have financial protection when life happens.