Life Insurance with Living Benefits
Life insurance is often thought of as financial protection for your loved ones after you pass away. However, policies with living benefits can provide critical financial assistance while you’re still alive, making them a versatile and valuable tool. Living benefits allow policyholders to access a portion of their death benefit in specific circumstances, such as critical illness, chronic illness, or terminal illness. This feature can ease financial burdens during challenging times, ensuring peace of mind and financial security. Here, we will explore what living benefits are and provide a detailed comparison of offerings from National Life Group, Nationwide Insurance Company, and North American Insurance Company.
What Are Living Benefits?
Living benefits, also known as accelerated death benefits, enable you to use part of your life insurance policy’s death benefit while still alive. These benefits are typically triggered by certain qualifying events, including:
- Critical Illness: Conditions such as heart attacks, strokes, or cancer diagnosis.
- Chronic Illness: A situation where you’re unable to perform at least two of the six activities of daily living (ADLs), such as eating, bathing, or dressing, for an extended period.
- Terminal Illness: A medical prognosis with a life expectancy of 12-24 months or less, depending on the policy.
Living benefits can be used to cover medical expenses, pay off debts, or maintain your quality of life during difficult times. Let’s examine how the top companies provide these features.
1. National Life Group
National Life Group is well-regarded for its innovative and comprehensive living benefits. All of their permanent life insurance policies automatically include living benefits without additional cost.
Key Features:
- Critical Illness Coverage: Provides access to your death benefit in case of illnesses such as cancer, stroke, or heart attack.
- Chronic Illness Coverage: Offers financial support if you lose the ability to perform two or more ADLs.
- Terminal Illness Coverage: Allows access to your policy’s benefit if your life expectancy is 24 months or less.
- Alzheimer’s Rider: This rider provides additional financial support for individuals diagnosed with Alzheimer’s disease or other severe cognitive impairments. It helps cover costs associated with care, including specialized medical services and long-term care needs.
Unique Advantage: National Life Group stands out for its flexibility. The policyholder can use the accelerated benefits in any way they choose—whether for medical treatments, paying off a mortgage, or other personal expenses. This feature is embedded in the policy and doesn’t require additional riders.
2. Nationwide Insurance Company
Nationwide offers living benefits through optional riders that can be added to most of its life insurance policies. This provides more customization but may come at an additional cost.
Key Features:
- Critical Illness Rider: Covers major health events such as organ transplants, cancer, or strokes.
- Chronic Illness Rider: Offers financial aid if you’re unable to perform two or more ADLs.
- Terminal Illness Rider: Available if you’re diagnosed with a terminal illness with a life expectancy of 12 months or less.
Unique Advantage: Nationwide’s living benefits are highly customizable, allowing policyholders to tailor coverage to their specific needs. However, unlike National Life Group, these features are not automatically included and may increase premiums.
3. North American Insurance Company
North American Insurance Company provides living benefits through accelerated benefit riders included in many of their life insurance policies.
Key Features:
- Critical Illness Accelerated Benefit: Covers medical conditions like heart attacks, organ failure, or strokes.
- Chronic Illness Accelerated Benefit: Supports individuals who cannot perform ADLs or require long-term care.
- Terminal Illness Accelerated Benefit: Allows access to the death benefit if diagnosed with a terminal illness with a 12-month life expectancy.
Unique Advantage: North American Insurance Company offers a streamlined claims process and flexibility in how funds are used. Their living benefits are included in many policies at no additional cost, similar to National Life Group.
Key Differences Between Companies
Feature | National Life Group | Nationwide Insurance Company | North American Insurance Company |
---|---|---|---|
Automatic Inclusion | Yes | No | Yes |
Customizability | Limited (embedded features) | High (optional riders) | Limited (embedded features) |
Cost for Living Benefits | Included in policy | Additional cost for riders | Included in policy |
Qualifying Illnesses | Comprehensive | Customizable based on rider | Comprehensive |
Flexibility of Use | High | High | High |
Conclusion
Living benefits can transform your life insurance policy into a multifaceted financial tool. National Life Group, Nationwide Insurance Company, and North American Insurance Company each offer robust options, but their approaches differ. National Life Group and North American Insurance Company include living benefits in many policies without additional cost, providing great value. Nationwide Insurance Company’s customizable riders are ideal for those seeking tailored coverage.
When selecting a policy, consider your health, financial situation, and preferences. A financial advisor can help you navigate these options and choose the best policy for your needs.