Living Benefit Riders

**FINANCIAL CONSIDERATION: Overlooking Life Insurance Policies in Long-Term Care Planning**

**Living Benefit Riders on Life Insurance Policies**

Living Benefit Riders, also referred to as endorsements, on life insurance policies enable the insured individual to access a portion of their death benefit while they are still alive, contingent upon specific events. Often, these riders are integrated into a policy at no additional cost*. The primary types of Living Benefit Riders include:

1. **Terminal Illness Riders** – These riders permit individuals diagnosed with a terminal illness to access a fraction of their death benefit during their lifetime. This crucial benefit offers additional funds to cover expenses such as medications or specialized treatments not included in standard health insurance plans.

2. **Critical Illness Riders** – These riders allow individuals suffering from certain critical illnesses to access a portion of their death benefit. The illnesses covered may vary by contract but frequently include conditions such as heart attack, cancer, stroke, major organ transplants, or kidney failure. They provide necessary financial support to replace lost income, address health deductibles, or cover medication costs.

3. **Long-Term Care Riders** – These riders are designed for individuals requiring long-term care, whether for a permanent or temporary condition (sometimes as brief as 90 days). Benefits are triggered by severe cognitive impairments or an inability to perform daily living activities for a minimum of 90 days. Funds can typically be accessed to cover expenses related to home care, nursing homes, or assisted living facilities. Some policies even extend benefits after the death benefit has been fully utilized (refer to Life Insurance as a Long-Term Care Alternative).

4. **Chronic Illness Riders** – Functioning in a manner similar to long-term care riders, these riders often specify that the insured can access death benefit proceeds solely for permanent situations requiring long-term care assistance. Benefits are generally activated by significant cognitive impairment or a permanent inability to perform daily living activities. Funds can usually be allocated for home care, nursing homes, or assisted living facilities. Notably, these benefits may come at no additional cost on competitive policies and can serve as a valuable backup for long-term care planning.

Could a life insurance policy serve as a backup plan for your long-term care needs?

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*Please note that policy benefits and conditions vary depending on the specific contract.

For more details, refer to our Professional Disclaimer.