Living Benefits of Life Insurance

While Life Insurance’s main purpose is to protect someone against unforeseen circumstances such as a family member passing away unexpectedly, living benefits of life insurance can be leveraged in multiple ways.

Chronic or Terminal Illness Rider

Added at no cost to your IUL, this accelerated death benefit rider allows the insured to collect part of the death benefit early if the policy owner has a terminal or chronic illness. According to Mutual of Omaha’s IUL policy, for chronic illness, the rider will provide the accelerated benefit if the insured shows severe cognitive impairment, or is unable to perform at least two of the six ADLs (activities of daily living) for 90 straight days. The ADLs are bathing, continence, dressing, eating, using the toilet, and transferring.

This rider offers a maximum benefit of $1 million, or 80% of the total death benefit, and provides financially stable while still caring for your loved ones when they need it most.

Long-Term Care Rider

Another living benefit of life insurance is the long-term care rider which also provides an accelerated death benefit. With this option, you pay a fixed amount each month, and the maximum total benefits are chosen at the time of the policy being issued. One can choose a max benefit of $2 million at 1 or 2 percent, or $1.25 million at 4 percent. The difference with the LTC rider is the age restriction. Only insured persons between the age of 30-79 up to table 4 can qualify for this rider, while people of any age and all risk classes qualify for the chronic or terminal illness rider.

When choosing which rider is best for you, please consider all of these factors.


Annuities are designed to help the policy owner keep a steady income in retirement, which you can buy with a lump-sum or a series of payments. The three main types of annuities are fixed, variable, and indexed, each coming with their own risk.

Fixed annuities pay out a guaranteed amount. While this option might not bring the highest monetary return, it is the lowest risk of the three options.

Indexed annuities provide a greater risk than a fixed option, but also can provide a greater reward with a portion of the return being correlated with the market index.

Variable annuities provide the greatest risk and reward. With a variable annuity, your money goes into a mutual fund, which will dictate the return on your money.

While the balance of an annuity does grow tax-free, it is still considered income tax when you take money out of it.

We hope this information on Living Benefits of Life Insurance was helpful to you. If you have additional inquiries regarding an indexed universal life insurance policy, please do not hesitate to contact us.

Empower Brokerage is devoted to helping you educate clients on the insurance they need through webinars, one-on-one calls, seminars, or marketing resources. Give us a call if you have any questions 888-539-1633.

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