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Although you may be familiar with the benefits of life insurance, such as how it can financially protect your loved ones in case of death, there are still many things you don't know. Did you know that life insurance can provide benefits while alive?

The cost of a policy that includes life insurance with living benefits depends on your underwriting premium and the riders you add. The premiums for term-life insurance vary based on age, health history, coverage amount, and many other factors.

Living benefits enable the insured to take money out of the policy's benefit upon death while they are still living. These funds can help pay for expenses associated with terminal or chronic diseases, such as nursing home or hospice care, in-home caretakers, and medical care.

called the living benefits of life insurance —

Critical illness rider

You may have a basic understanding of life insurance and how it can benefit your loved ones financially if you pass away. Life insurance can also offer benefits while you are still living.

Cash value withdrawal. Withdrawing cash allows you to access a part of your permanent policy's cash value. This withdrawal is exempt from taxes if it is less than your premium payments. You will be taxed if you receive any interest, dividends, capital gains, or other income. You should also be aware that any amount you withdraw from the policy will be deducted from its death benefit if it isn't repaid.

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If you are diagnosed with a terminal and critical illness, your life benefits will pay you a portion of the death benefit. Even though your beneficiaries' cash benefits may be reduced, living benefits can still help you cover expensive end-of-life medical expenses that your loved one doesn't have.

No additional fee or living benefits can be added to your life insurance policy. Term life policies include a terminal disease rider that is included for free. Ask your insurance agent about any charge, critical illness, and chronic illness riders.

Life insurance policies provide financial security for your loved ones during your death. Life insurance policies that include living benefits can be used to gain some of the death benefits even if you are still alive. These riders are optional.

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Rider for terminal illness:

You can get cash value or an acceleration of the death benefit with some policies while you are still alive. These options are commonly referred to as "living benefits" and could be the best-kept secrets of life insurance. Consider the times in your life that surprise you. Having an additional source would be very helpful.

While life insurance can benefit your loved one after you die, it can also provide benefits for them (and you) before that time. This is known as living benefits.

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Ask insurance companies about adding living benefits to your policy if you are interested in this option.

Long-term care (LTC) rider:

Ask insurance companies to discuss your options if you are looking for living benefits.

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Long-term care (LTC) rider:

Living benefits protect your family from being responsible for your end-of-life care costs. Your gifts will reduce your lump-sum payments to beneficiaries. So you'll have to decide how much.

Policy surrender. You can cancel your permanent policy and receive the cash value as a lump sum. This amount will be less than any outstanding loans or unpaid premiums.

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Permanent life insurance is a type of term life insurance with a death benefit. However, permanent life insurance also offers the opportunity to accumulate cash value tax-deferred, which is what a term policy does.

A 35-year-old nonsmoker could pay as little as $25-30 per Month for a $500,000 policy (20-year) with a terminal illness rider. This same person could pay significantly more if they added a long-term care rider.

Cash value withdrawal. You can withdraw a portion of the cash value of your permanent insurance policy. If the amount you start is less or equal to your premium payment, you won't be liable for taxes. You may owe taxes if any part of the amount you withdraw is interest, dividends, or capital gains. If the policy is not repaid, the amount you start will be removed from the policy's death benefit.

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