6 ways a living benefit rider can make you healthier and happier


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A living benefit rider can help you stay in control when your health is failing you.

Key points

  • Most living benefit riders are designed to pay death benefits before you die.
  • The accelerated death benefit is the most common type of living benefit.

To better understand how living benefits work, it helps to understand what a rider is. A life insurance rider is optional coverage or a feature added to your life insurance policy. Each endorsement adds something more to the policy, allowing you to customize your coverage with the type of protection you desire. One of these riders is called a “living benefit”.

Read more: Life Insurance Riders: Which are Right for You?

Types of living benefits riders

To be clear, there is more than one type of living benefits rider, and depending on the life insurance company, you may see the term “living benefits” used widely. This is because they use it to describe any benefit you receive before you die. Some companies even refer to loans taken out on whole life policies (a type of life insurance that pays out money) as a subsistence benefit, while others offer discounts for medical care. and fitness centers.

For the sake of simplicity, we divide living benefits riders into the three most serious camps:

Chronic disease

Suppose you are diagnosed with a serious illness or physical condition that should permanently affect your ability to manage on your own. In this case, some insurers will allow you to receive death benefit funds from your life insurance to help pay for this assistance.

critical illness

A critical illness rider allows you to access death benefits if you are diagnosed with an acute illness such as cancer, sudden cardiac arrest, paralysis or stroke. Funds are also available if you need a major organ transplant, are diagnosed with kidney failure, or need a heart valve replacement. The funds you receive reduce the amount of death benefit distributed to your heirs after your death.

terminal illness

A terminal illness living benefit rider provides early payment of death benefits if you have 12 to 24 months to live (depending on the insurance company). Rather than waiting for you to die and distributing your policy proceeds to heirs, the insurance company lets you access the funds while you’re still there. The idea is to make your free time as comfortable and serene as possible.

Also, depending on the insurance company, you may be allowed to claim all or part of the death benefit amount.

Funds can be used however you see fit. You can pay for medical care, home modifications, or take your family on a cruise. You do not have to tell the insurer how you are spending the money and you are not required to provide receipts. It is your money that will be used tax-free.

Some insurance companies include living benefits in their policies, while others charge extra to add them. Still, depending on your situation, it may be worth paying a bit more for coverage. Here are 6 ways living benefits can improve your life:

  1. Can allow you to stay at home. No matter what happens in life, most of us prefer the familiarity of our own homes. Let’s say you have been diagnosed with something that will lead to the need for a wheelchair. By accessing Living Benefits, you will have the money to modify your home in a way that will allow you to continue living in it.
  2. Covers the cost of home help. If you need money to pay for things that are getting harder and harder for you, like mowing the lawn or cleaning the house, Living Benefits can help pay for those services.
  3. Take the burden of care off your family’s shoulders. If you have family, chances are they want to make your life as easy as possible no matter what’s going on in their own lives. You can help alleviate some of their worries by having the funds to pay other people to help you, even if it’s part-time.
  4. Makes your last days more enjoyable. If your doctors have told you that you don’t have long to live, having the money to do what you want can help create new memories and make your final days more comfortable.
  5. Allows you to control how the money is spent. One of the benefits of living benefits is that you don’t have to answer to anyone for how you spend the money. Do you want to buy something special for each of your grandchildren or go out for a family meal once a month? How the money is spent is entirely up to you.
  6. Can leave more money for your beneficiaries. Paying out of pocket for medical care, household assistance, and other financial issues can quickly deplete the accounts you’ve worked hard to build over the years. If leaving a little something for your loved ones is important to you, living benefits help make it possible.

Read more: How to choose your life insurance beneficiaries

As mentioned, different insurers use the term “living benefits” differently. If you’re buying a new policy or want to add a rider to an existing policy, make sure you know what type of living benefits coverage you’re most interested in before contacting an agent.

Providing peace of mind for life’s moments

Insurance isn’t something we often think about until we need it and that usually means you don’t spend a lot of time researching what’s best for you and your personal situation. Taking the time to learn about the basics of insurance, whether it’s how to get discounts on your home insurance policy or the best way to get a car insurance quote, will help you save money and ensure you have the right insurance coverage for your needs. .


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