How to Use Life Insurance for Living Benefits: Critical Illness, Long-Term Care & More
- Sofia Aguilera
- Jul 17
- 2 min read
When people hear "life insurance," they often think of a benefit paid out after someone passes away. But what if your life insurance could support you while you’re still alive? With today’s policies, it can.
Living benefits are built-in or optional features that allow you to access your life insurance while you're living—especially during some of life’s most challenging moments. Here's how they work and why they might matter to you and your family.
Critical Illness Coverage
If you're diagnosed with a covered condition like cancer, heart attack, or stroke, a critical illness rider can provide a lump-sum payout. This money can be used however you need it:
Cover medical bills and treatments
Replace income during recovery
Pay for home care or specialized support
Travel to see specialists or family
This feature helps protect your finances during a health crisis—when you need support the most.
Long-Term Care Benefits
Planning ahead for long-term care is something many families overlook. Fortunately, some permanent life insurance policies now offer long-term care (LTC) riders, allowing you to access your death benefit early to pay for:
Nursing home expenses
In-home health aides
Assisted living costs
Without this protection, many families are forced to dip into savings or retirement funds. LTC benefits can help preserve your assets while getting you the care you need.
Chronic Illness Riders
If you become permanently unable to perform basic daily activities—such as dressing, eating, or bathing—you may qualify for early access to your policy through a chronic illness rider. This can help cover:
Home modifications
Daily caregiving
Medical supplies
Therapy and mobility aids
These funds are often vital for maintaining quality of life while avoiding financial strain.
Terminal Illness Advance
If diagnosed with a terminal illness and given a life expectancy of 12–24 months (depending on the policy), many policies allow for an accelerated death benefit. This advance can be used for:
Medical and hospice care
Family travel and time together
Legacy planning or final wishes
Rather than being strictly a “death benefit,” this feature lets your insurance help during your most important time.
Cash Value Access
Permanent life insurance policies—like whole or indexed universal life—build cash value over time. You can borrow or withdraw from this cash for:
Emergency expenses
College tuition
Retirement income supplement
Business opportunities or debt consolidation
This flexibility makes your life insurance a valuable financial tool you can lean on at any stage of life.
Is It Time to Rethink Your Life Insurance?
At Avalon Tax & Financial Services, we help individuals and families see life insurance not just as protection—but as preparation. With the right policy and the right strategy, your coverage can support your life goals, health needs, and financial peace of mind.
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