Broker Check
Term Life Insurance with Accelerated Living Benefits

Term Life Insurance with Accelerated Living Benefits

October 02, 2023

Term life insurance with Accelerated Living Benefits allows policyholders to access a portion of their life insurance death benefit while they are still alive, under certain circumstances. These benefits can provide significant advantages over generic, basic term insurance and offers financial security, financial support, and peace of mind in difficult situations. Not all life insurance carriers offer this benefit or even have it available as an option.

Term life insurance with Accelerated Living Benefits provides:

  1. Financial Assistance during Critical Illness: If the policyholder is diagnosed with a critical illness specified in the policy, such as cancer or stroke, they can receive a portion of the death benefit to cover medical expenses, treatment, and other financial needs.


  1. Debt Repayment: Funds obtained through Accelerated Living Benefits can be used to pay off outstanding debts, such as mortgages, loans, or credit card debt, alleviating the financial burden on the insured and their family.


  1. Flexibility: Accelerated Living Benefits provide flexibility in how the policyholder can use the funds. It can be used to pay medical bills, make home modifications, and even cover travel costs for specialized treatment. There are typically no restrictions on how the money is spent.


  1. No Additional Premiums: Some carriers include Accelerated Living Benefits as a standard policy benefit. In other cases, policyholders may be able to obtain this as a rider on the term life insurance policy at no extra cost.


  1. Maintaining Financial Security: Accessing a portion of the death benefit can help policyholders maintain their financial security and avoid financial hardship during a difficult time. This can prevent them from depleting their savings or retirement funds to cover medical expenses.


  1. Peace of Mind: Knowing that there is a financial safety net in place if a critical illness occurs can provide peace of mind to the policyholder and their loved ones. It can relieve some of the stress associated with a serious medical diagnosis.


  1. Death Benefit Protection: It's important to note that using the accelerated living benefits does not deplete the entire death benefit of the policy. A portion of the death benefit is typically paid out, and the remainder is still available to the beneficiaries upon the insured's death.


  1. No Taxation: The funds received through accelerated living benefits are often tax-free, which means that policyholders do not have to worry about income tax on the money they receive.


  1. Survivorship Planning: Benefits can also be used for survivorship planning. For example, they can help with end-of-life care expenses, settling outstanding debts, or simply improving the quality of life for the policyholder during their remaining time.


  1. Care Where You Need It: If the insured requires care due to a critical or chronic illness, the accelerated benefits can be used to help finance the costs associated with assisted living facilities, in-home care, or nursing homes.


It's important to note that the specific terms and conditions of accelerated living benefits can vary among insurance companies and policies. Policyholders should carefully review their policy documents and speak with an insurance professional or financial professional to fully understand how these benefits work and what illnesses or conditions are covered. Additionally, accelerated living benefits are subject to certain limitations and may reduce the overall death benefit of the policy, so it's crucial to weigh the pros and cons and consider individual needs and circumstances.

Contact us today to discuss this further, and let us show you the importance of this type of protection. 

2023.10.01 RegEd ID: 5983682.1