What Does Living Benefits Mean?
Living benefits refer to the cash benefits available to the insured after they have paid premiums over a specific period. The cash values and the endowment proceeds of a permanent life insurance policy are considered living benefits since they are made available to the insured while they are alive.
Insuranceopedia Explains Living Benefits
With the introduction of variable policies, which are basically investment packages with term insurance, the use of the phrase "living benefits" became popular due to the uncertainty of the gains in the investment market. Thus, living benefits riders were added to the variable package to provide guaranteed cash after a certain period that the policy is being paid. The cash available from a living benefit rider is aimed to cushion the impact of old age and the accompanying long-term care.