life insurance in college station texas

 

Life insurance is a policy that many people choose to purchase to ensure that when they die, their loved ones are financially protected. Yet what many people who invest in life insurance services may not know is that some of these policies offer living benefits as well.

If you are going to speak with a life insurance agency about buying a policy, learn about living benefits and how they can be payable before a covered person passes away.

What Are Living Benefits?

There are two types of benefits paid out by life insurance policies: death benefits and living benefits. All policies pay out death benefits after the policyholder dies. Some policies also offer living benefits that are payable in certain circumstances while the policyholder is still alive.

Living benefits are not an automatic benefit that comes with every policy. This benefit can be added to term life insurance policies sold by a life insurance agency with an accelerated benefit rider.

Under What Circumstances Are Living Benefits Payable?

If you have opted to add an accelerated benefit rider to a term policy purchased from a life insurance services provider, living benefits are payable under these three circumstances:

  • Critical Illness - You suffer from a critical illness such as a stroke, heart attack, renal failure, cancer, or must undergo a major organ transplant.
  • Chronic Illness - You have been diagnosed with a chronic illness and cannot perform two or more Activities of Daily Living such as getting out of bed, bathing, eating, dressing, are incontinent, or require assistance to get around and more.
  • Terminal Illness - You have been diagnosed with a terminal illness and your life expectancy is one year or less.

How Do Living Benefits Work?

When living benefits are added to term policies sold by life insurance services, they can be very helpful in the event a person must deal with one of the above circumstances.

These funds could be critical in helping you pay unexpected medical and living expenses should you become critically, chronically, or terminally ill. Still, it is important to understand how these benefits affect a term life insurance policy before claiming them.

Accelerated benefit riders can usually be added to a term life policy issued by a life insurance agency. These riders essentially offer the right to redeem a portion of your death benefit while you are still alive, under one of the three qualifying circumstances discussed above.

The amount you redeem prior to death affects the remaining amount of your benefit and premiums.

What Does This Mean in Terms of Benefits?

What this means is that if you have a death benefit of $100,000 and add an accelerated benefit rider of 50% of the death benefit, you can exercise this benefit and receive $50,000. The policy death benefit is then reduced to the remaining $50,000 and your premium is adjusted based on this benefit.

Living benefits can be advantageous if you are diagnosed with one of the three qualifying types of illness. Since this will affect the amount of money your spouse and/or loved ones receive upon your death, accelerated benefit riders do require careful consideration and planning.

Buying the right life insurance is an important decision to make on behalf of your family. Living benefits added to a term insurance policy by a life insurance agency can provide essential funds in the event of a critical, chronic, or terminal illness. Experienced life insurance services can help determine whether an accelerated benefit rider is right for you and how it will affect your family both during your life and after your passing.

Need A Life Insurance Agency In College Station?

Jones & Associates Offers Complete Life Insurance Services!

Call (979) 599-7532!