What are living benefits in life insurance?

Living benefits in life insurance refer to the advantages that policyholders can utilize while they are still alive, rather than solely upon their death. These benefits may include options such as accessing a portion of the death benefit in cases of terminal or chronic illness, allowing the insured to receive funds to cover medical expenses or other urgent needs. This feature provides policyholders with financial flexibility and support during difficult times, making it a valuable aspect of certain life insurance products.

In contrast, benefits that are only accessible after the policyholder's death, like a traditional death benefit, do not fall under the category of living benefits. Additionally, while tax benefits can be associated with life insurance policies, they are not specific to the concept of living benefits. Benefits that accumulate at retirement age do not reflect the intent behind living benefits, which are designed to provide immediate access to funds in the event of a qualifying circumstance. Thus, the focus on leveraging these benefits while alive distinguishes them within the context of life insurance.