As part of the coverage couple’s FAQ series, we’ll be answering the most important aspect of life insurance: Living Benefits.
You’ll hear us refer to Living Benefits as bulletproof protection no matter what, because unlike traditional “death insurance” of the past, providers have finally responded to consumer desire and demand with a perfect solution. Living Benefits are the cure-all for the challenges and even objections built into what we call “death insurance.” Simply put, you no longer have to die in order for your policy to payout (after all, it’s your money).
This is a gigantic game changer, and since it’s recent introduction to the insurance and investment industry we’ve never proposed a protective plan for clients and families that didn’t have this literal life-saving feature. The defining advantage of Living Benefits is your ability to be your own bank, when tragedy strikes. What that means is you’re able to use the insurance companies money — not your own — when you’re diagnosed with a chronic condition, suffer a critical illness, or develop a terminal illness.
According to every person, ever, they’d rather use someone else’s money to pay for things — especially things they didn’t want and can’t afford! This is where the perk of Living Benefits, and having a properly structured policy for your needs, comes in. Not only are you using the insurers tax-free money, but it’s guaranteed to be there, unlike stocks, mutual funds, retirement, or the shoebox under your bed with baseball cards you’re securing it for less than pennies on the dollar.
The best way to explain how Living Benefits function is once a trigger is activated (and there are up to 23 triggers) a large portion of your total benefit is released from the ‘vault’ of your policy. This money is NOT taxed, and on top of that it’s deposited into YOUR account — not a doctor, hospital, funeral home, bill collector, government, probate court, or anyone else! Something else to keep in mind is you never have to pay back those funds — it’s not a loan, it’s YOUR money. Living Benefits are a measured risk the insurance company takes upon themselves.
When you partner with us at The Coverage Couple, we don’t merely become your advisors, more importantly we become your advocates. We communicate and file any documentation with the carrier on your behalf. This not only saved you time and headache, but because of our time in the industry we know many of the executives and underwriters on a first-name basis, ensuring you’re taken care of without getting lost in the shuffle.
To explain the mechanics of Living Benefits with an example, if you have a million-dollar policy and are diagnosed with any chronic condition, suffer a debilitating injury, unable to do things like get dressed and prepare meals, or experience a heart attack, stroke, cancer, kidney failure and so forth, depending on the weighted scale of benefit liquidation, you’ll be the direct and irrevocable recipient of up to $950,000, of that original $1,000,000. While some carriers will advance you up to 100% of your death proceeds prior to your actual death, it’s a best practice to keep a portion secured in your policy for final expense needs.
Due to the influx of Living Benefit popularity and consumer desire for this phenomenal feature, many carriers have disingenuously added pseudo-benefits into their policies that falsely appear to be Living Benefits at first glance. Once you take a deeper look, you’ll find that it’s nothing more than a carrot you’ll never actually get. Pretty sneaky (and common place, sadly). We’ve encountered this shady practice countless times, where life insurance companies claim their coverage includes “Living Benefits,” simply because they release some funds to the policyholder upon the diagnosis of imminent death via a physician’s terminal illness affidavit. This is NOT a genuine Living Benefits clause, and an unethical way to prey on consumers.
NOTE: It’s a legal mandate insurers must abide by to ‘unlock’ funding for a policyholder upon documentation they have an anticipated life expectancy of 12-24 months. It reminds me how they put “gluten-free” on oatmeal containers at the grocery store, when oats don’t even have gluten, or how packaged meat will advertise “no antibiotics or hormones” when it’s common knowledge the FDA prohibits the use of antibiotics and hormones in American livestock! Regrettable, corporations are more than ready and willing to play “Twister” when it comes to the truth, and the only person who always loses, is you.
We commit to conducting deep investigative research for you, and would like for you to reserve time with us, without any cost or obligation. We’ll carefully listen, and then follow up with a proven, practical, custom proposal for your review. HERE is our official invitation to take part in The Coverage Couple Challenge, where EVERYONE WINS. Visit the Scheduling Page at thecoveragecouple.com to see how much we can save you on your existing coverage, or provide a financial risk assessment and needs analysis for your review if you’re unprotected and univested. We hope to hear from you soon, because your life is worth the investment! -Aaron & Sarah, The Coverage Couple