How Do Living Benefit Riders Work?

A Living Benefits Rider in a life insurance policy allows you to use some of the death benefit while you’re still living to pay for long-term care expenses.

“Life Quotes wants you to know that there is a whole new crop of life insurance riders in the market that provide cash payouts ahead of death if certain medical events occur,” said LifeQuotes President and CEO Robert Bland, CLU. “These are called ‘Living Benefit Riders’ or ‘Accelerated Benefit’ riders.”

Because of the low cost of these riders, we now recommend them to every applicant wherever available. This gives a whole new meaning to the value of your term or permanent life insurance policy.

This is not long-term care insurance, but a simple cash advance of the death benefit that can be used for long-term care or any purpose should a serious medical event happen.

The best of these riders, which vary by company, pay under three broad scenarios:

  1. A specific critical illness medical event such as heart attack, cancer or stroke
  2. When you become chronically ill and need care and cannot do at least 2 of 6 daily activities
    on your own and
  3. If you become terminally ill

A recent survey of 500 adults indicated that eighty-four percent of those surveyed said they would be likely to buy a life insurance policy with living benefits. The problem is most life insurance shoppers don’t know that these riders are available. We quote and display them at on
every quote request.

The purchase of a life insurance policy that contains a living benefit rider requires some homework and understanding. When a living benefit is paid, it will cause the death benefit to be reduced, often substantially if the payout occurs in the early policy years. Before you purchase a living benefits life insurance policy, we urge you to read the consumer brochure carefully and then discuss your understanding of the coverage with our Customer Service Agents, who will gladly take the time to explain how claims with living benefit riders.

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