While the majority of the individuals will invest in a life insurance coverage typically to offer death benefit proceeds, but life insurance policies of late have introduced some alternate concepts pertaining to how insureds are capable of using the policies funds when they are alive. This is known as the living benefits of the policy. Life insurance policies are no longer used only after the demise of a person, but now the policy benefits has been more customized for various other needs which is helping people to use their policies for their different needs and goals.
The living benefits also called as the accelerated death benefits may be included in the life insurance policy as a rider during the purchase or afterwards. Such advantages will enable terminally ill people in accessing a part of the proceeds of their insurance death benefit before their demise.
Following the increasing health care expenditure, the majority of the people is faced with terrible financial hardship during their difficult times. As a person has to face the difficulty both emotionally and physically, the financial assistance which funds from the living benefits of the policy can offer will serve as a welcome relief. Such funds, along with relieving the stress on a person will also relieve the stress of the loved ones.
A policy holder will be capable of accessing their living benefits for the following,
• Suffering from a terminal disease and their demise may take place shortly
• Will be confined to a hospital or nursing home permanently
• Not capable of performing specific activities of day to day living via their own
• Have been diagnosed with a specific catastrophic disease or needs special medical care like an organ transplant
• Needs constant life support services
The benefits from a life insurance policy typically can be accessed through a policy loan or a policy surrender. Living benefits in essence serve as a form of lien against life insurance policies. It will cut down the death benefits which are actually payable to beneficiaries as well as cut down the sum which is accessible for loans along with the policy’s cash value. In fact the lien will be equivalent to the payment amount of the living benefits which the policyholder will get along with accrued interest. With life insurance policies continuing to evolve, the advantages which are provided through such plans is likely to persist to offer for the changing and unique requirements of the policy holders and on a broader scale.