Life insurance
Living benefits
In plain EnglishFeatures on a life insurance policy that let you use part of your death benefit while you’re alive if you get seriously ill.
What it is
Living benefits — also called accelerated death benefits — let you receive part of your policy’s death benefit early if you’re diagnosed with a qualifying illness. Whatever you use is subtracted from what your family receives later.
There are usually three kinds: terminal illness (a short life expectancy), chronic illness (unable to do basic daily activities like bathing or dressing, or a serious cognitive impairment), and critical illness (such as a heart attack, stroke or cancer — the list varies by carrier).
How it works
Step by step.
- They come with your policyLiving benefits come free on almost every policy we offer — term, whole life, IUL and more.
- If a qualifying illness happensYou file a claim with your medical records.
- You receive a lump sumA portion of your death benefit — often less than the full amount you accelerate, based on the carrier’s calculation.
- The rest stays for your familyYour beneficiaries receive whatever death benefit remains.
The honest version
What’s good, and what to watch.
Every product has trade-offs. We’d rather you hear them from us now than discover them later.
What we like
- Free on almost every policy we offer
- Money when you need it most
- You decide how to use it — treatment, bills or lost income
What to watch
- It reduces what your family receives later
- You usually receive less than the amount of death benefit you use
- Which illnesses qualify — and the definitions — vary by carrier
- It can affect eligibility for benefits like Medicaid
Frequently asked questions
Straight answers.
Does it cost extra?
No. Living benefits come free on almost every policy we offer — there’s no extra premium for having them.
Is it the same as long-term care insurance?
No. Long-term care insurance is separate coverage. A chronic illness benefit can help with some of the same costs, but the rules are different.
Is the money taxed?
For terminal and chronic illness it’s generally tax-free within IRS limits. Ask a tax professional about your situation.
Often paired with
Related coverage.
Term life insurance
The most coverage for the lowest price, for the years your family depends on you most.
Learn more →Indexed universal life (IUL)
Lifelong protection plus cash value linked to a market index — with a guaranteed floor when the index drops.
Learn more →Mortgage protection
Life insurance sized to your mortgage, so your family keeps the house if something happens to you.
Learn more →General information, not tax or legal advice. Features, availability and rules vary by insurance company, product and state — we’ll walk you through the details of any policy before you apply.
Is this right for you?
Tell us a little about your family and goals. We’ll compare your options side by side — no pressure, no obligation.