Skip to main content

111621 What are living benefits of life insurance?

While life insurance generally benefits your loved ones after you

pass away, it can also benefit them (and you) before that time

comes through something known as living benefits.

 

Term Life Living Benefits

 

Term life insurance covers you for a set amount of time, or term.

It provides funds to your beneficiary (or beneficiaries) if you pass

away during that time.

Living benefit options for term life include...

 

Accelerated death benefits. This living benefit pays out a portion

of your term life policy if you ever face a terminal illness. This gives

you needed cash to cover medical expenses, debt and more. Many

people also use the funds to take a dream vacation or make other

memories with their loved ones. Here are four things in mind when

it comes to this living benefit…

Different insurers have different life expectancy timelines for when

you can access the cash.

The policy may need to be in force for a certain amount of time

before you can access the living benefit.

You may be charged interest on the portion of the accelerated death

benefit that you use.

The advanced amount is typically subtracted from the total amount

your beneficiaries receive after you pass away.

A variation on this option is called a “critical illness rider” that lets you

access your death benefit if you’re afflicted by a specific ailment or

disease.

Return of premium. With this living benefit, all the premiums you paid

during the term are returned to you so long as you don’t pass away

during the term. You typically pay more for this kind of policy than you

would for a traditional term life policy.

Disability waiver of premium. This living benefit lets you skip your

premium payments in the event you suffer from a long-term disability

for six months or more. While not a true cash benefit, it nonetheless is

a valuable option to have since there’s a three in 10 chance you’ll face

a disability that keeps you out of work for 90 days or longer at some

point during your working career.

 

Permanent Life Living Benefits

 

Permanent life insurance (whole life) has a death benefit like term life

insurance, along with the ability to accumulate cash value on a

tax-deferred basis, which a term policy does not.

Some permanent life insurance policies give you the option of

accelerated death benefits like term life insurance does.

Permanent life insurance lets you tap into needed funds throughout

your lifetime in four other important ways as well:

Cash value withdrawal. A withdrawal lets you access a portion of

the cash value of your permanent life policy. You won’t owe any taxes

on this withdrawal if the amount you withdraw is less than or equal to

your premium payments. However, you will owe taxes if any portion

of the amount you withdraw is from interest, dividends or capital gains.

Also be aware that the amount you withdraw will be subtracted from

the policy’s death benefit if it’s not repaid.

Policy loan. You’ll be charged interest if you take out a loan against

your permanent life policy, but it’s usually lower than the interest

charged by other lenders. You also won’t have to undergo a credit

check or abide by a long list of restrictions.

Policy surrender. A policy surrender is when you cancel your

permanent life policy to access the cash value portion as a one-time

lump sum. The insurer will give you that amount, less any outstanding

loans and/or unpaid premiums.

Long-term care benefits. Adding a long-term care benefit to your

permanent life policy lets you tap into the death benefit to cover

long-term care expenses that your health insurance doesn’t cover.

The death benefit is typically reduced by the amount of the long-term

benefit that you use. It’s a valuable living benefit to have when you

consider that 70 percent of people turning 65 today will need some

form of long-term care in their lives.

 

Learn More About Living Benefits of Life Insurance

 

A licensed insurance agent can help you explore living benefits of

life insurance and answer any other questions you have.

 

The key is to start today.

 

Hayden Childs

Alabama Licensed Agent

(205) 269-1382

Shcmail34@yahoo.com

www.haydenchilds.net

 

 

https://lifehappens.org/life-insurance-101/what-are-living-benefits-of-life-insurance/

 



Comments

Popular posts from this blog

022823 The 9 Benefits of Whole Life Insurance...

(1) Provide for Loved Ones…   It’s the basic need everyone thinks about. You have a young family. You are the major breadwinner. Something happens to you. How is Your family supposed to make ends meet? It’s a form of protection. Peace of mind.   (2) Key Man Insurance…   You and your partner own a business. It’s grown. Many employees Depend on you. If something happens to your partner, it’s likely their Spouse or family will inherit their share of the business. Cash would Be a lot more useful to them. Life insurance on both partners can Provide the cash to buy out heirs and keep the business intact.   (3) Emergency Loans…   Hopefully your client lives a long life. The whole life policy accumulates Cash value, eventually growing to the full face value, or beyond. Many Policies allow you to borrow money against the cash value. You would pay interest.   (4) Funding Estate Taxes…   Your client owns a farm. It’s your major asset. It’s illiqui

081022 Is Life Insurance Worth It?

The decision to buy life insurance is personal. So many of the insurance calculations depend on your circumstances, Financial situation and future plans.   Even individuals who don’t currently have dependents, a business, Or significant debt may want to look into getting life insurance. That’s because the cost will go up as you age, which means that right Now is likely the cheapest time for you to buy a policy.    Even the best planners can’t predict the financial fallout of your demise. Carrying some life insurance can provide a layer of financial protection For your beneficiaries.   Thinking through the potential financial issues that could arise after your Death can help you answer the big questions: when, and how much Life insurance you should buy, if any.   - Emily Guy Birken   https://www.thebalance.com/who-needs-life-insurance-2645793#toc-why-buy-life-insurance     Hayden Childs Alabama Licensed Agent (205) 269-1382 www.haydench

050922 How Much Does Life Insurance Cost?

The cost of life insurance varies significantly depending on several different factors. One of the biggest cost factors will be the type of life insurance you buy. For example, a term life insurance policy is significantly less expensive than a Whole life insurance policy for the same amount of coverage.   Here are some of the most common factors affecting life insurance rates…   Age…   The younger you are when you buy a policy the less you’ll pay. That’s because your chance of death is smaller.   Sex…   Females have a life expectancy that is nearly five years longer than males, according to the National Center for Health Statistics. This means that men generally pay more for life insurance than women (except in Montana where insurers must provide gender neutral life insurance rates).   Health…   Your health has a major impact on your life insurance rates. The insurer will evaluate your past and current medical conditions in order to