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Life insurance policies primarily provide financial benefits for a policyholder’s loved ones after they pass away. However, life insurance with living benefits offers features and protections that provide value while you’re still alive. Let’s explore how these life insurance policies work and the different types of living benefits that may be available to you.
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Living benefits of life insurance are policy features that can provide additional financial support to you and your loved ones, such as cash value, an accelerated death benefit rider, or long-term care rider. Living benefits are available on either term life or permanent life insurance policies:
Depending on your life insurance policy, you may opt for several living benefits. Some of the most common include:1
An accelerated death benefit rider, or ADB rider, may let you access a portion of your death benefit early if you’ve been diagnosed with a qualifying illness. This benefit can help you pay for hospital bills, nursing home care, hospice and more expenses related to a terminal or serious illness.
A critical illness rider activates when you’ve been diagnosed with a covered critical condition like a stroke, heart attack, or cancer.2 This rider can help you access your death benefit early but will likely reduce the amount received by your beneficiaries after your death. If you don’t want to tap into your benefits, however, you can also consider a standalone critical illness insurance policy.
Like a critical illness rider, a chronic illness rider allows you to access your death benefit if you’ve been diagnosed with a chronic illness.2 Insurers have different guidelines for what constitutes a chronic illness and you may have to have a healthcare professional confirm you cannot perform activities of daily living, like bathing or dressing.
If you outlive a term life insurance policy, a return of premium rider refunds some or all of your premium payments. Keep in mind that this rider can significantly increase the cost of your policy.3
If you require long-term care not covered by traditional health insurance, a long-term care rider gives you access to a lump sum or percentage of your death benefit each month. Like an ADB rider, it will likely reduce the payout to your beneficiaries, but it can support long-term care costs during your life.1
Permanent life insurance offers cash value, a savings component that grows over time as you continue paying premiums. You can access the cash value component of your life insurance policy in several ways:
Usually, cash value withdrawals are non-taxable as long as you don’t take out more than you’ve already paid in premiums. If you surrender your life insurance policy, however, you’ll forfeit your policy and may have to pay taxes on policy gains.4
Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.
Get StartedLiving benefits of life insurance can offer several key benefits:
If you’re interested in a life insurance policy with living benefits, there are a few simple steps to take:
A life insurance policy can help your family after you pass on. Policies with living benefits, however, can help supplement a fixed income or provide added financial support for medical and long-term care expenses. Aflac offers life insurance with living benefits, including cash value and an accelerated benefit rider. Start chatting with an agent and get a quote today.
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Learn more about the differences between term vs. permanent life insurance so you can decide which type of policy is right for you.
Does term life insurance build cash value? Find out if these policies have a cash value component and whether cash value life insurance is right for you.
Learn more about the differences between term vs. permanent life insurance so you can decide which type of policy is right for you.
Does term life insurance build cash value? Find out if these policies have a cash value component and whether cash value life insurance is right for you.
1 NerdWallet – What Are Life Insurance Living Benefits? Updated January 11, 2024. Accessed March 31, 2025. https://www.nerdwallet.com/article/insurance/living-benefits-life-insurance.
2 Investopedia – What Is Life Insurance With Living Benefits? Updated March 26, 2025. Accessed March 31, 2025. https://www.investopedia.com/what-is-life-insurance-with-living-benefits-8606326.
3 Investopedia – Are Return of Premium Riders Worth It? Updated October 13, 2021. Accessed March 31, 2025. https://www.investopedia.com/articles/pf/08/return-of-premium.asp.
4 Investopedia – Cashing In Your Life Insurance Policy. Updated August 1, 2023. Accessed March 31, 2025. https://www.investopedia.com/articles/pf/08/life-insurance-cash-in.asp.
5 NerdWallet – Term Life vs. Whole Life Insurance: Key Differences and How to Choose. Updated October 21, 2024. Accessed March 31, 2025. https://www.nerdwallet.com/article/insurance/term-vs-whole-life-insurance.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans – A68000 series: Term Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68200, A68300 & A68400. In New York, Policies NY68200, NY68300 and NY68400. Whole Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368100. In Delaware, Policy A68100. In New York, Policy NYR68100. B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Not available in Delaware. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.
Receipt of accelerated death benefits may affect eligibility for public assistance programs. Benefits may also be taxable, and are not expected to receive the same favorable tax treatment as other types of accelerated death benefits that may be available.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY, VA or VT. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.
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