Living Benefits vs Death Benefits

Life insurance has many unique benefits associated with it, especially for individuals looking to protect themselves and their loved ones from possible financial hiccups later in life.

To increase their reach, insurance companies have designed several policies to appeal to people from different backgrounds. However, it remains a complicated industry for the layman. In fact, according to an insurance report from Lendedu, 54% of Americans own life insurance but are confused about how it works.

More and more people are beginning to think of life insurance as something that you cannot enjoy in life and must pass on to your beneficiaries. Today, however, life insurance can offer you the advantages of both living and death benefits.

Living Benefits vs Death Benefits
What Living Benefits and Death Benefits Stand for

What Living Benefits and Death Benefits Stand for

Living Benefits

Living benefits are just as they sound, life insurance benefits that can be enjoyed by the policyholder while he or she is still alive. They are mostly associated with permanent life insurance coverage are also referred to as “accelerated death benefits”. The policy guarantees to pay a certain amount of the death benefits as income to the insurance holder while still alive. This is an optional piece of coverage that is available through many life insurance providers.

To qualify for accelerated death benefits, the insured must have been diagnosed with a particular terminal illness that is assumed to result in the death of the policyholder. The accelerated death benefit is not subject to tax on the benefits and they might be used to supplement uncovered costs by your insurer.

A typical living benefits insurance rider will pay you between 24 and 100% of your benefits. Depending on the insurance company, actual payment will be specified according to the terms of the policy rider, and payment usually will attract some discounted values. In most cases, a discounted offer is determined by your medical condition at the time the claim is made.

Calculating the premiums of your living benefits policy often varies from one insurance company to another. Therefore, you may have to look around for the company that offers the best rates.

Living benefits also include the accrual of cash value on your policy, which can be borrowed against for loans, medical bills, and educational expenses.

Death Benefits

The major difference between living benefits and death benefits is in the beneficiary and the period of maturity. Living benefits pay insurance benefits to the insured while alive, but death benefits are available after the insured has passed.

Therefore, death benefits occur when the insurance company pays a lump sum of money, pension, or annuity to a designated beneficiary upon the death of the insured. An alternative to giving a lump sum is monthly or annual payment based on a certain percentage of the insured’s annuity. Payouts are not subject to tax.

Death benefits insurance riders are available for purchase from different insurance companies. One of the most sought-out death benefits riders is the enhanced death benefit rider that offers monthly or annual payouts.

Why You Should Consider Life Insurance With Living Benefits

Life insurance offers both immediate and long-term benefits that you need to meet your financial academic and career goals. As such, when you are buying a life insurance policy as a medical student, you should do so having both a short-term and a long-term mindset to ensure no stone is left unturned. Therefore, the following tips should be considered:

Living benefits can protect you when life-threatening health conditions like critical illness, chronic illness, and terminal illness strike. Yes, your life insurance policy will protect your family after you pass, but what if an illness threatens their financial security while you are still alive?

According to the recent cancer facts and figures from The American Cancer Society, it was estimated that there were over 1.7 million new cancer cases diagnosed in 2018. Consequently, 609,640 cancer deaths were recorded in the United States in the past year.

Additionally, The American Centers for Disease Control and Prevention (CDC) have raised concern over the prevalence of cardiovascular-related diseases, which have become the leading cause of death globally. In America alone, over 600,000 people die each year due to heart diseases.

Furthermore, living benefits provide handy funds for taking care of things like living facilities, adult day care, hospice care, nursing homes, respite care, cash benefits, and so on.

Sadly, many are not prepared for situations like these. For that reason, an insurance policy with living benefits is a valuable tool that can meet your financial needs when a terminal illness arises.

Why You Should Consider Life Insurance With Living Benefits

The traditional life insurance is primarily used as a safety net for your dependent family members after your passing. But the ultimate purpose is to give you peace of mind, knowing that your loved ones have what they can fall back to when you’re gone.

The death benefits of a life insurance policy can serve many purposes. One of the key advantages is that the policy allows you to leave a financial legacy for your spouse and your children or other dependent family members. You can also leave a legacy gift for a charity cause, local association, or an organization.

Death benefits can also provide cash to cover for final expenses like burial costs and other additional costs. Additionally, death benefits help pay for your children’s college and can offset mortgages plus any other debts. The payouts can help relieve your loved ones from financial hardship, allowing them to live a normal lifestyle after your passing.

How Gold Coast Life Insurance Can Help

We here at Gold Coast Life Insurance provide a customized policy that will enable you to protect your loved ones on your own terms – all through a seamless process.

Our main goal is to ensure that your financial future and that of your loved ones are secure. We believe that everyone deserves protection irrespective of their health status. We accept high-risk applicants and even those with pre-existing conditions without discrimination.

Take advantage of our free quote and experience the long-term benefit of your biggest asset.

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