Living benefits are life insurance riders linked to a life insurance policy that allow the insured to access money from the policy’s death benefit while they’re still alive. Sometimes they may also be known as accelerated death benefits and can be taken on both term life insurance and permanent life insurance policies.

Living benefits can be used for expenditures associated with terminal or chronic illness, like medical care, hospice or nursing home care, in-home caretakers, and more. 

Examples of common living benefits include:

Terminal illness: If you are diagnosed with a life expectancy of six months to two years, you can use this rider to cover end-of-life care and other associated costs. A terminal illness rider is often automatically incorporated into the policy without extra cost, but you should check with your insurer.

Chronic illness: If you’re diagnosed with a chronic disease that prevents you from performing at least two of the six “activities of daily living” (ADLs), like bathing, eating, getting dressed, toileting, transferring, and continence, you can use this rider to help out with your daily activities.

Critical illness: You can also access living benefits with a critical illness rider, covering qualifying illnesses that reduce life expectancy and have high medical costs. Some qualifying conditions are heart attacks, strokes, and kidney failure.

Long-term care: This rider allows you to access living benefits if you need to pay for long-term care services and can’t perform at least two activities defined under ADL guidelines.

To access living benefits, you must submit a claim to your insurance company, medical records, and other documentation. Your insurer may provide living benefits as a lump sum or on an as-needed basis. Often, you’re restricted to a certain percentage or dollar amount in how much you can withdraw from your policy’s death benefit, such as 80%.