What is a "living benefit" rider in life insurance?

A "living benefit" rider in life insurance provides policyholders with the ability to access a portion of their death benefit while they are still alive, under certain specific conditions. This can be especially beneficial in cases where the insured faces terminal illness, chronic illness, or critical illness, allowing them to use the funds for medical care, living expenses, or other needs during a difficult time.

The availability of these funds can significantly ease the financial burden that may arise from serious health issues, giving individuals or families more flexibility to manage expenses when facing life-altering circumstances. Living benefits help in enhancing the policy’s utility beyond the traditional role of providing a death benefit to beneficiaries after the insured’s passing.

While other options may touch on important aspects of life insurance, such as retirement income, penalties related to policy surrender, or accidental death benefits, they do not accurately capture the unique feature that living benefit riders provide in allowing access to funds while the insured is still living.