Living Benefits
We consider living benefits an essential component of what we call Family Systemic Risk Management. They can be included as part of a life insurance policy or purchased separately as an additional rider.
Living benefits allow you to access a portion of your death benefit while you’re alive, specifically if you face a critical illness, chronic illness, or terminal illness. This money can be used for medical expenses, lost income, long-term care, or anything else you need.
Common Riders and Benefits
Term Conversion Rider
Allows conversion of a term life insurance policy to a permanent policy without a medical exam.
Example: Convert to whole life insurance to build cash value for retirement or estate planning.
Return of Premium Rider
Refunds all premiums paid if the policyholder outlives the term.
Example: Receive a lump sum refund to invest or use for retirement.
Waiver of Premium Rider
Waives premium payments if the policyholder becomes disabled.
Example: Maintain life insurance coverage without financial burden during disability.
Disability Income Rider
Provides monthly income if the policyholder becomes disabled and unable to work.
Example: Replaces lost income, helping to maintain living expenses during disability.
Accelerated Death Benefit Rider
Allows access to a portion of the death benefit if diagnosed with a terminal illness.
Example: Use funds to cover medical expenses or take a dream vacation with family.
Accidental Death Benefit Rider
Provides an additional payout if the insured dies in an accident.
Example: Offers extra financial support to beneficiaries in case of unexpected accidental death.
Guaranteed Insurability Rider
Allows purchase of additional coverage without a medical exam at specified times.
Example: Increase coverage after major life events like marriage or the birth of a child.
Child Protection Rider
Offers term life coverage for the policyholder's children.
Example: Provides financial support for funeral expenses if a child passes away.
Long-Term Care Rider
Uses the death benefit to pay for long-term care services.
Example: Covers nursing home or in-home care costs.
Family Income Benefit Rider
Provides regular income to beneficiaries instead of a lump sum.
Example: Ensures steady financial support for family members after the policyholder's death.
Cost of Living Rider
Adjusts the death benefit based on inflation.
Example: Ensures the death benefit retains its purchasing power over time.
Automatic Premium Loan Provision
Pays premiums automatically from the policy's cash value if a payment is missed.
Example: Prevents policy lapse due to missed payments.
Spousal Rider
Provides life insurance coverage for the policyholder's spouse under the same policy.
Example: Offers financial protection for both partners without needing separate policies.
Estate Protection Rider
Increases the death benefit to cover potential estate taxes.
Example: Helps preserve the policyholder's estate for heirs by covering tax liabilities.
No-Lapse Guarantee Rider
Ensures the policy remains in force even if the cash value is insufficient to cover premiums.
Example: Provides peace of mind that coverage will not lapse due to cash value depletion.
Overloan Protection Rider
Prevents the policy from lapsing due to excessive loans against the cash value.
Example: Maintains policy integrity and coverage even with substantial borrowing.
Joint and Survivor Rider
Covers two lives, typically used for couples, with the benefit paid after both have passed.
Example: Useful for estate planning and ensuring financial security for heirs.
Annual Renewable Term Rider
Adds temporary coverage that can be renewed annually.
Example: Provides additional coverage during high-need periods, like when children are young.
Charitable Giving Rider
Provides an additional death benefit to a charity of the policyholder's choice.
Example: Supports charitable causes without reducing the benefit to heirs.
Living Needs Benefit Rider
Similar to the accelerated death benefit, allows access to funds for specific living needs.
Example: Use for major life expenses like college tuition or unexpected medical costs.
Survivor Purchase Option
Allows a surviving spouse or partner to purchase a new policy without medical underwriting.
Example: Ensures continued coverage for the surviving partner after the first death.
Cash Value Withdrawal
Access a portion of the cash value in a permanent life insurance policy.
Example: Use funds for home renovations or to pay for a child's wedding.
Policy Loan
Borrow against the cash value of a permanent life policy.
Example: Invest in a business or handle a financial emergency.
Supplemental Retirement Income
Use cash value to provide a steady stream of income during retirement.
Example: Supplement Social Security benefits or other retirement income sources.
Debt Consolidation
Use cash value to pay off high-interest debts.
Example: Improve financial stability by reducing debt burden.
Charitable Contributions
Use living benefits or cash value for significant donations to charities.
Example: Support favorite causes or set up a charitable trust.
These riders and benefits enhance the flexibility and utility of life insurance policies, providing financial security and opportunities for policyholders to meet various life needs and goals.