Health insurance covers medical expenses like doctor visits, hospital stays, and treatments, but typically doesn't replace lost income or cover non-medical expenses. Living benefits, on the other hand, provide cash payments directly to you that can be used for any purpose—medical bills, mortgage payments, daily expenses, or even experimental treatments not covered by health insurance. They work as a financial safety net beyond what health insurance provides.

Disability insurance and living benefits serve complementary purposes. Disability insurance typically replaces a portion of your income if you're unable to work, but often has waiting periods and doesn't cover one-time expenses. Living benefits can provide lump-sum payments upon diagnosis of critical conditions, regardless of your ability to work, and can be used immediately for any expenses. Having both creates a more comprehensive financial safety net.

The amount varies by policy and carrier, but typically ranges from 50% to 95% of your death benefit depending on your condition. Critical illness riders might allow access to 25-50%, while terminal illness provisions often allow up to 75-95% of the death benefit. Any benefits accessed while living will reduce the amount paid to beneficiaries upon death. Our licensed professionals can help you understand the specific provisions of different policies.

Qualifying conditions typically fall into three categories: Critical illnesses including cancer, heart attack, stroke, major organ failure, and ALS; Chronic conditions where you can't perform at least two activities of daily living (such as bathing, eating, or dressing) for an extended period; and Terminal illnesses with life expectancies typically under 12-24 months. The specific qualifying conditions vary by carrier and policy, so it's important to review the details carefully.

Living benefits are generally received tax-free up to certain limits, similar to life insurance death benefits. However, there can be exceptions based on policy structure, premium payments, and specific tax situations. For chronic illness benefits, payments are typically tax-free up to the greater of per diem limits or actual costs of care. We recommend consulting with a tax professional regarding your specific situation.

In some cases, yes. Many insurance carriers offer riders that can be added to existing policies, though this may require additional underwriting. If your current policy doesn't offer this option, we can explore whether a new policy with living benefits would be beneficial or if standalone critical illness coverage would better meet your needs. Our team can review your current coverage and provide personalized recommendations.