Frequently asked questions

Living benefits let you access a portion of your life insurance death benefit while you are still alive if you experience a qualifying event — typically a terminal illness, chronic illness, critical illness, or critical injury. They are delivered through provisions called accelerated benefit riders, and on many modern policies they are included at no additional premium.

Not if your policy has living benefits. Traditional life insurance only pays your beneficiaries after you die, but a policy with accelerated benefit riders can pay you directly during your lifetime after a qualifying diagnosis or injury.

Essentially, yes. 'Living benefits' is the consumer-friendly umbrella term; 'accelerated death benefit' or 'accelerated benefit rider' is the contract language for the feature that advances part of your death benefit early.

In almost all cases, yes. Unlike health insurance or long-term care reimbursement, accelerated benefit payouts are unrestricted cash. People use them for medical bills, mortgage payments, replacing lost income, travel to specialists, experimental treatment, or simply keeping the household running.

With many carriers — including National Life Group companies — accelerated benefit riders are added to eligible policies at no additional premium. The insurer instead applies a discount or fee at the time you actually exercise the rider. Some carriers and some rider types do charge an ongoing premium, so always read the illustration.

Yes. Any amount you accelerate, plus any applicable discount and administrative fee, is deducted from what your beneficiaries would later receive. You choose how much to accelerate, so you can take part of the benefit and preserve the rest.

They can. Several carriers include terminal, chronic, and critical illness riders on term products at no extra premium. This is one of the most affordable ways to get living benefits protection.

More common than most people expect. Roughly 40% of Americans will be diagnosed with cancer during their lifetimes according to the National Cancer Institute, and the CDC reports that about 805,000 Americans have a heart attack each year. Any one of those events could trigger a critical illness rider.

Terminal illness riders date back to the late 1980s, born out of the AIDS crisis. Chronic and critical illness accelerations became widespread in the 2000s and 2010s. Today virtually every major carrier offers some form of living benefits, though the strength of the riders varies dramatically.

National Life Group is a Vermont-based insurance group founded in 1848, one of the oldest life insurers in the United States. Its member companies (National Life Insurance Company and Life Insurance Company of the Southwest) are known for including a full suite of no-additional-premium living benefit riders on term and permanent products. As of 2025 it holds an A+ (Superior) financial strength rating from AM Best; ratings are subject to change.

Terminal illness (pays if life expectancy falls below a defined period, often 12-24 months), chronic illness (pays if you cannot perform 2 of 6 activities of daily living or have severe cognitive impairment), critical illness (pays after events like heart attack, stroke, or invasive cancer), and critical injury (pays after events like coma, paralysis, severe burns, or traumatic brain injury).

It depends on the rider, product, and state. Terminal illness riders often allow the largest accelerations. Carriers also set overall caps — frequently $1 million to $2 million of accelerated benefit across all policies on one insured. Your illustration shows the exact limits for your policy.

Bathing, continence, dressing, eating, toileting, and transferring (getting in and out of a bed or chair). Chronic illness riders typically trigger when a licensed health care practitioner certifies you cannot perform at least two of them without substantial assistance, generally for a period expected to last 90 days or more.

Not exactly. A chronic illness rider pays unrestricted cash from your death benefit and is not a licensed long-term care product, while LTC insurance reimburses care expenses under stricter 7702B rules. For many families the rider is a flexible, more affordable alternative; for those expecting large extended-care costs, dedicated LTC coverage may pay more over time. Many advisors use both.

Yes. You can own multiple policies with riders, though carriers apply per-insured caps on the total amount you can accelerate with them, and each policy's riders operate independently.

Riders cover the insured person named on the policy. Spouses need their own policies. Some carriers offer children's term riders, and a few extend limited benefits to children, but the core living benefits protect the insured only.

It pays your premiums for you if you become totally disabled. It is usually grouped with living benefits in the broad sense because it provides value while you are alive and keeps your other riders in force exactly when you can least afford a lapse.

Riders generally remain while the policy is in force, but some carriers restrict exercising certain riders past a given age or after a term period ends. Chronic illness riders in particular may have issue-age limits. Check the rider pages of your contract.

Most carriers use a discounted death benefit method: you request an acceleration amount, and the insurer pays a discounted portion of it based on your life expectancy after diagnosis, the severity of the condition, an interest rate factor, and any premiums due. The more severe the condition, the closer the payout is to the full accelerated amount.

Terminal illness benefits are generally received income-tax-free under IRC Section 101(g). Chronic illness benefits are generally tax-free up to the IRS per-diem limit (adjusted annually). Critical illness accelerations are often received tax-free as well, but treatment depends on your facts. Payouts may affect Medicaid or SSI eligibility. Always confirm with a tax professional.

It can. Accelerated benefits become countable assets once received, and means-tested programs like Medicaid and SSI have strict asset and income limits. If you or a family member rely on these programs, talk to an elder-law attorney before accelerating benefits.

Many carriers deduct a one-time administrative fee (commonly $150-$500, varies by state) and apply an actuarial discount when you exercise a no-premium rider. There is typically no ongoing cost for carrying the rider itself on these products.

For healthy applicants, 20-year level term with living benefit riders often runs a similar price to plain term from carriers that charge for comparable riders — think tens of dollars per month for several hundred thousand dollars of coverage at younger ages. Permanent policies cost more because they build cash value and last for life. Your age, health class, coverage amount, and product type drive the premium.

Not automatically. The policy stays in force on the remaining death benefit, and premiums or policy charges generally continue (often reduced proportionally). Some contracts waive premiums after a 100% terminal acceleration, and a waiver of premium rider can eliminate them if you are disabled.

No. It is not a loan. The payout permanently reduces your death benefit; there is nothing to pay back. (A small number of carriers use a lien method where the acceleration accrues interest against the policy — another reason to read the contract.)

On permanent policies, cash value is typically reduced proportionally to the portion of the death benefit you accelerated. Your annual statement after the acceleration will show the adjusted values.

Terminal riders: any condition with a certified life expectancy under the contract's threshold (often 12-24 months). Chronic riders: inability to perform 2 of 6 ADLs or severe cognitive impairment. Critical illness riders commonly list heart attack, stroke, invasive cancer, end-stage renal failure, major organ transplant, ALS, blindness, paralysis, and aplastic anemia. Critical injury riders commonly list coma, paralysis, severe burns, and traumatic brain injury. Exact lists vary by carrier and state.

Contact your agent or the carrier's claims department, complete the acceleration request form, and provide physician certification of the qualifying condition. The carrier may request medical records or an independent medical opinion, then sends you a payout offer showing the discounted amount and the effect on your policy before you accept.

Straightforward, well-documented claims are often paid within a few weeks of the carrier receiving complete paperwork. Complex files needing additional medical records take longer. Terminal illness claims are usually prioritized.

Yes — most commonly because the condition does not meet the contract definition, the certification paperwork is incomplete, the policy lapsed, or the diagnosis occurred inside the contestability period with a material misrepresentation on the application. A knowledgeable agent dramatically reduces avoidable denials.

No. After you request an acceleration, the carrier sends an offer detailing the payout and its effect on the policy. You can accept, decline, or in many cases request a smaller acceleration to preserve more death benefit.

Often yes, depending on the rider. Some critical illness riders allow separate claims for separate qualifying events, and chronic illness riders may pay in annual installments. Every acceleration further reduces the remaining death benefit, and total caps apply.

The policy continues in force at the reduced death benefit (unless you accelerated 100%). Future premiums and cash values adjust proportionally, and remaining rider capacity is reduced by the amount used.

Yes, whatever death benefit remains after the acceleration. Some products also guarantee a small residual death benefit even after a maximum acceleration.

Generally anyone who can qualify for the underlying life policy — most carriers issue from childhood through age 60-80 depending on product. The riders themselves usually have no separate underwriting; if you qualify for the policy, the eligible riders come with it.

Often, yes. Well-managed diabetes, prior non-terminal cancers in remission, controlled blood pressure, and similar histories are insurable with many carriers, sometimes at a rated (higher) premium. Conditions already diagnosed will not qualify for a payout — riders cover events that occur after the policy is issued.

Not always. Accelerated underwriting programs approve many healthy applicants with no exam using application data, prescription histories, and databases. Larger face amounts and complicated histories may still require a paramedical exam.

Usually not — riders are generally attached at issue. If your current policy lacks them, the common paths are a term conversion (if available), a new policy, or a 1035 exchange to a product with riders. Never cancel existing coverage until the new policy is approved and in force.

A common starting point is 10-15x your annual income for income replacement, then adjust for debts, mortgage, education goals, and — for living benefits planning — the cash you would want available after a serious diagnosis. An agent can run the numbers both ways.

Yes. New York's insurance regulations restrict several rider designs, so products and rider availability differ there, and some carriers offer a reduced set of accelerations. If you live in New York, work with an agent licensed there to see what is currently approved.

Look at which riders are included (all four, or just terminal?), the qualifying definitions, maximum acceleration amounts, whether riders cost extra, how payouts are calculated, and the carrier's financial strength. Two policies with identical premiums can have wildly different living benefits.

Request a call on this site or dial us directly. A licensed agent will review your goals, health, and budget, compare eligible products, and handle the application end to end. There is no fee for our help and no obligation.