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Life Insurance: Living Benefit: How Apply For


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This article describes how to apply for a living benefit (also known as an accelerated death benefit.)

Before You Apply For A Living Benefit Under Your Life Insurance Policy

If you determine that you may be eligible for a living benefit:

  • Call your doctor and let him or her know what you are doing. Is he or she agreeable to providing a "life expectancy" so that you can obtain a living benefit from your life insurance company? (Don't be surprised if you have to explain to the doctor what a "living benefit" is.) If the doctor is not willing to write that you have a life expectancy short enough to fit the company's requirements, is there another doctor who is willing to complete the papers for you? Insurance companies usually only require that a doctor complete the paper work - not that the doctor has to be your specialist.
  • Read Cautions,(below). Then contact the insurance company and request the papers necessary to apply for a living or accelerated death benefit. You may even find the necessary papers on the company's web site.
  • Before you receive the check, think through what is the best place to park the money until you are ready to use it.

Before contacting the insurance company to inquire about a living benefit, much less applying for one

  • If your policy is less than two years old, review the application for the insurance to be certain that all of the information you provided in order to obtain the coverage was accurate. During the first two years of any policy, the insurance company that issues the policy has a right to contest the validity of the policy. You want to make sure that they have no reason to do so.
  • During your initial inquiries about a living benefit with the insurance company or your employer, you do not have to disclose your condition or diagnosis. This doesn't mean that you won't be asked about your condition, however. If asked you may politely respond that you don't wish to discuss it. We recommend giving an insurance company as little information as possible at least until you are able to determine if you may be eligible for the living benefit.

To learn more about living benefits, including how to find out if your policy has one or one can be added, see New Uses of Assets -- A Living Benefit From The Life Insurance Company.

Be sure to continue to pay premiums on your life insurance policy until the process is complete.

  • Under no circumstances should you ignore any premium that becomes due during the process of applying for a living benefit. It is your responsibility to make sure that the policy remains in force.
  • If you are unable to make premium payments as a result of your financial situation, utilize all of your available resources to keep the policy in force. Don't forget to consider friends or family as possible sources of short term help. You may also consider contacting a local disease specific non-profit organization for assistance.
  • Note: If you appear eligible for a Living Benefit, then you would likely be eligible for Disability Waiver of Premium if your policy contains such a provision.

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