Life insurance mostly provides financial security to loved ones after the policyholder’s demise. Many of these policyholders do not look at their insurance policy as an asset at all. Instead, they see it as a monthly bill or payment from which they will never get any personal benefit.
But that is not the case. Many people are unaware that life insurance can benefit them while they are still alive. These benefits, called living benefits, provide invaluable support during tough times. All you need is to understand how to use life insurance while alive from a financial advisor. This way, you can unlock its full potential by making it a small strategy while planning your financial security.
In this blog post, we will explore how you can benefit from life insurance while alive and how to make it work.
How can you use life insurance while alive?
Here we are going to discuss how to utilize life insurance while alive. Let’s get started!
Understanding Living Benefits
Living benefits refer to the features that allow you to access some of your life insurance benefits while you are still alive. Generally, a life insurance payout is made upon the policyholder’s demise, but living benefits expand the utility of your insurance policy to cover unexpected circumstances during your lifetime.
These benefits have become very important as they provide financial relief and assistance to you. These benefits include assisting you when facing a critical illness, chronic disease, or other long-term care needs.
What are the types of living benefits you can avail of from your life insurance while alive?
Following are some of the types of living benefits you can avail:
I- Accelerated Death Benefit
This benefit will allow you to get a portion of your death benefit if you are diagnosed with some terminal illness. It will also help you manage your medical expenses, end-of-list costs, and any other financial obligations when facing a hard time. Your payout can be used as desired, giving you flexibility and peace of mind.
II- Critical Illness Coverage
It offers financial assistance to the policyholder of life insurance who are diagnosed with severe medical conditions. These conditions may include heart attack, cancer, organ failure, or stroke. The Critical illness coverage provides a lump-sum payout that can be used to cover your medical treatments, experimental therapies, or other expenses related to the illness. It helps you to minimize the burden of medical bills, allowing you to focus on your recovery rapidly.
III- Chronic Illness Support
Chronic illness support, also called long-term care benefits, helps policyholders with chronic illnesses or disabilities that need ongoing care and assistance. It also allows you to access a portion of your life insurance plan to cover expenses associated with medical care. These may include nursing homes, assisted living facilities, home healthcare, or other long-term care needs.
IV- Disability Income Rider
Some life insurance plans offer a disability income rider that gives income replacement if the policyholder becomes disabled and unable to work. It will also assure a steady income stream during the disability period, protecting you from financial stability and allowing you to maintain your quality of life.
What are the benefits of utilizing life insurance while alive?
You may find a lot of advantages to using a life insurance policy while alive. Here are some of them:
1- Financial Security
Using life insurance during their lives provides a safety net to the policyholders. It allows individuals to maintain their financial security during challenging times. They are allowed to access a portion of their life insurance benefits. With the help of this, they can cover their medical bills, treatment costs, and other expenses without depleting their savings or resorting to additional borrowing.
2- Flexibility and Control
Living benefits allow you to assign funds as you see fit. This will allow you to make decisions according to your specific needs. You are free to decide whether to pay for your specialized medical treatments, modify your living arrangements, or give financial support to your family.
3- Supplement Coverage
The benefits you are getting from your life insurance policy while you are alive may act as supplemental coverage. It allows you to complement your existing health insurance or disability plans. In this way, they fill the gaps in coverage and deliver additional financial assistance while ensuring complete protection during unexpected health crises.
4- Mental Satisfaction
Knowing that life insurance will give support during challenging times brings peace to your mind. As a result, you can focus on your well-being or your beloved ones, knowing that you have financial resources and assistance to rely upon if any need arises.
Life insurance policy’s benefits are not only limited to untimely demise. The advantages of your life insurance, while you are alive, offer you great support during your entire life. From accelerated death benefits to severe illness coverage and chronic illness support, it has features that empower you to face unexpected health issues without compromising your financial stability.
Moreover, understanding the potential of living benefits will help you make informed decisions while selecting life insurance plans. After that, you are sure that you will receive comprehensive coverage that fulfills both your current and future needs.