YouTube Review: Why Living Benefit Riders Matter

Why Living Benefit Riders Matter

You may have a decent understanding of the benefits of life insurance, like how it can help financially protect your loved ones in the event you were to pass away. But did you know that life insurance can also provide benefits while you’re still living?

What Does Living Benefits of Life Insurance Mean?

Life insurance allows you, the policy owner, to build cash value through your life insurance policy that accumulates over your lifetime. This is considered a living benefit of life insurance because, in contrast to a death benefit that pays out when you pass away, you can use the money while you’re still alive.

What are Living Benefit Riders?

A living benefit rider is additional coverage on your basic life insurance policy that provides supplementary benefits and protection to you, sometimes at an extra cost. A rider comes in handy when you have specific needs that aren’t covered by a standard insurance policy. Basically, a rider is used to customize your policy to fit your needs.

For example, if you’re terminally ill, an accelerated death benefit rider may pay out a portion of your death benefit while you’re still alive. You could use the payout for things like medical expenses, among other uses, and when you pass away, your beneficiaries will receive a reduced life insurance benefit since you used a portion of the policy already.

The living benefits of life insurance can help provide additional layers of protection — just one more way life insurance helps protect what matters most. Talk to your American Family Insurance agent to see if your American Family Life Insurance Company policy has living benefits. In the meantime, check out our life insurance coverages to see which option is best for you and your loved ones.

Riders offer supplemental coverage to your life insurance policy and accommodate unexpected events that aren’t built into your policy. Some common life insurance riders – like the term conversion rider , which allows you to convert your policy into a permanent one at the end of the term – are included for free. But others – such as the waiver of premium rider, which pays out in cases of disability – cost extra and can be hard to qualify for.

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