The main purpose of life insurance is to provide a death benefit to your surviving family members to provide financial security or a legacy ensuring your loved ones are taken care of at a stressful time. But today, due to medical technology and lifestyle changes, people are living longer than ever before. While there are many benefits to a longer life, it’s likely that additional preparation may make financial sense since it also means that you are more likely to be impacted by a chronic, critical or terminal illness simply due to a longer life span.

Due to this potential, it might make sense that the life insurance death benefit you purchase can also be extended to include living benefits to you, the insured, in certain circumstances, to cover potential pre-death difficult financial times you may face. These “Living benefits” are known in the industry as ‘Accelerated Death Benefits’ (ADB’s).  

In fact, according to, there is a very good chance that you may become chronically or terminally ill if you live long enough. 7 in 10 people who are age 65 will need some form of chronic illness care later in life for illness like Alzheimer’s disease, a serious stroke, crippling arthritis, heart attack, etc.

This could create a life changing emotional and financial impact to you and your family. Not only would you have to face the challenges of living with a chronic, critical or terminal illness, your family may be forced to take time away from work and their personal life or spend their own money to care for you. You may need to leave your career earlier than planned which will affect your income and retirement funds. This might also have a big affect on your spouse’s current and future retirement plans.

What types of Life Insurance are available for Living Benefits?

Both Permanent and Term life insurance coverage may provide living benefits. There may be a fee for a specific additional rider on a policy or built into the policy pricing depending on the insurance carrier and product structure. Each carrier and product that offers these benefits will state their own requirements, limitations, additional fees and waiting periods for when the ADB cash will become available after a policy is in force. In addition, they will state the amount of the death benefit available and in what increments and time periods.  We will educate you, help you determine the most efficient policy type and find the appropriate carriers and policies for your specific needs and situation. 

Below are the different types of possible coverage: 

Terminal Illness:

You are diagnosed with a terminal illness typically resulting in life expectancy of less than 6 or 12 months. This benefit payment can be used for experimental medicine, prepare for final expenses or any other purpose you feel necessary.

Chronic Illness:

You become diagnosed as chronically ill and unable to perform on your own two of the six activities of daily living such as bathing, dressing, eating, continence,  toileting, transferring or due to cognitive impairment.

Critical Illness:

A lump sum benefit is paid should you suffer from a triggering event illness such as cancer, heart attack, stroke, blindness due to diabetes, kidney failure or major organ transplant, and more…there are a number of plans available dependent on your medical history, for example, if you currently have a specific medical condition, you would most likely be excluded from coverage for that particular illness, but would be permitted to take coverage on other illness categories available..again there also may be wait periods as determined by u/w as to your eligibility for coverage.


Some carriers today offer Long Term Disability protection through accessing the death benefit of a term policy.

Additional potential Living Benefits are available through carefully structured permanent cash value life insurance planning, such as building a potentially large sum of cash for tax free retirement distribution planning, college savings, major purchases, debt reduction, etc. These concepts are discussed in the sections labeled: Cash Value Life Insurance and Tax Free Retirement Planning.

Activities of Daily Living (ADLs) Defined: (A Chronic illness)

  • Bathing Washing yourself by sponge bath; or in either a tub or shower, including the process of getting into and/or out of the tub or shower.
  • Continence: Ability to maintain control of bowel and bladder functions; or when unable to maintain control of bowel or bladder functions, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag).
  • Dressing: Putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs. This includes buttoning buttons and tying shoes.
  • Eating
    Ability to, without the aid of another person, maintain an adequate food and fluid intake consistent with dietary needs.
  • Toileting
    Getting to and from the toilet, getting on and off the toilet and performing associated personal hygiene.
  • Transferring
    Moving into or out of a bed, chair or wheelchair. Transferring does not include the task of getting into or out of the tub or shower.

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