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Prestations de vie
What is Living Benefits Insurance?
Living benefits insurance, also known as accelerated benefits or riders, is a type of insurance that provides financial support to policyholders while they are still alive, if they suffer from a severe illness, injury, or condition that significantly impacts their ability to lead a normal life. Unlike traditional life insurance, which only pays out a death benefit to beneficiaries after the policyholder’s death, living benefits insurance allows the policyholder to access a portion of their policy’s death benefit during their lifetime under certain qualifying conditions.
This type of insurance can be crucial in providing financial stability and peace of mind when dealing with serious health issues. It ensures that policyholders have the necessary funds to cover a range of expenses, including medical bills, long-term care, and everyday living costs, without having to deplete their savings or rely solely on other forms of financial assistance.
Benefits
Financial Relief: Provides immediate access to funds for medical treatments, home modifications, long-term care, and other expenses.
Flexibility: Funds can be used at the policyholder’s discretion, for medical bills, debts, or living expenses.
Peace of Mind: Reduces stress by ensuring financial resources are available, allowing focus on recovery or quality time with loved ones.
No Repayment Required: The amount accessed is subtracted from the death benefit, with no need to repay if the policyholder recovers.
Qualifying Conditions
Living benefits insurance typically covers the following conditions:
Critical Illness: Severe illnesses such as cancer, heart attack, stroke, or major organ failure. These conditions often require extensive and expensive treatment, which can significantly impact a person’s finances.
Chronic Illness: Long-term conditions that limit a person’s ability to perform basic activities of daily living (ADLs) such as bathing, dressing, eating, and mobility. Examples include severe arthritis, diabetes with complications, and advanced Alzheimer’s disease.
Terminal Illness: When a policyholder is diagnosed with a terminal illness and has a limited life expectancy, usually 12-24 months. This allows them to access funds to cover end-of-life care, bucket-list activities, or to ease the financial burden on their loved ones.
Living Benefits FAQ's
Qualifying conditions typically include critical, chronic, or terminal illnesses such as cancer, heart disease, stroke, Alzheimer’s disease, and severe injuries.
The amount varies by policy but generally ranges from 50% to 80% of the death benefit.
No, the amount you receive is subtracted from the death benefit, and you do not need to repay it.
Yes, most policies have a waiting period, typically ranging from 30 to 90 days after diagnosis before you can access the benefits.
Living benefits are generally not taxable if the policyholder paid the premiums with after-tax dollars. However, it’s advisable to consult a tax professional for specific cases.
