Client Benefit Insurance Services, Inc. (CBIS) works with life insurance carriers rated A or better for financial strength by AM Best.
Living benefits let you use part of your life insurance while you’re still alive if you’re diagnosed with a qualifying serious illness. This is often called an accelerated death benefit. A living benefit is a feature of the policy, and often an add-on (some insurance companies call it a rider). Some term, whole, universal life and final expense policies include it or offer it. Others don’t have it at all.
CBIS is a family-owned independent agency based in Santee, and we compare how different insurance companies handle living benefits. We work by phone or video with people across San Diego County and the rest of California.
Already have a policy? We can check whether a policy you already own includes living benefits, and review the rest of it for free. Get a free policy review →
The main types of living benefits
Living benefits usually come in a few types. Each policy defines exactly what qualifies, and the rules depend on the carrier, the policy and state law.
Terminal illness
If a doctor certifies that your life expectancy is limited, as the policy defines it, you may be able to take a large part of your coverage early.
Chronic illness
Some policies let you use part of your coverage if you can’t handle basic daily tasks like bathing or dressing, or if you have a severe cognitive impairment, such as advanced dementia. The money often comes in yearly or monthly amounts.
Critical illness
If you’re diagnosed with a condition the policy names, such as certain heart attacks, strokes or cancers, you may be able to use part of your coverage.
Critical injury (some policies)
A few policies also cover serious injuries such as paralysis or a major brain injury, using the policy’s own definitions.
Chronic illness benefit compared with long‑term care insurance
The two sound alike, but they work differently.
Chronic illness benefit
- Lets you use some of your life insurance coverage early if you qualify.
- Whatever you take comes out of the payout your beneficiaries would receive.
It isn’t long-term care insurance, and it may pay out differently than a care policy would.
Long‑term care insurance
- Built to help pay for care at home, in assisted living or in a nursing home.
- Its benefits don’t reduce a life insurance payout.
Some life policies also offer a separate long-term care add-on. That add-on works differently from a chronic illness benefit.
Here is how that could play out:
- Heart attack and months off work: if it meets the policy’s definition, the money could go toward the mortgage.
- Terminal diagnosis: if it meets the policy’s definition, the money could cover care and give you time with the people you love.
- Can’t dress or bathe alone: if it meets the policy’s definition, the money could help pay a caregiver.
What to weigh before you use a living benefit
Living benefits can ease a hard stretch. They also come with trade-offs.
- The payout shrinks: whatever you use now reduces what your beneficiaries receive later. Some insurance companies also charge a fee or reduce the amount when you use it.
- The policy spells out whether living benefits are included, which illnesses qualify, how much you can use and what it costs.
- Taxes and public benefits: money you receive may affect your taxes, and critical illness payments may be treated differently than terminal or chronic illness payments. Talk with a tax professional before you use one. The money may also affect eligibility for public benefits like Medi-Cal.
Paperwork: you’ll usually need records from your doctor to qualify.
Compare the types of life insurance →
What living benefits cost
Some policies include living benefits at no extra monthly cost, and others charge for them as an add-on. These things move the cost:
- The type of policy: term, whole, universal life or final expense
- Your age and health
- Nicotine use, including vaping
- The coverage amount
- Whether living benefits are built in or cost extra
- How the insurance company figures the amount when you use it
Your age, your health and the amount of coverage drive most of the price. Ask CBIS for a free side-by-side comparison of policies, including how each one handles living benefits.
Who gets the most out of living benefits
They’re worth a look when a serious illness would strain your budget. They may matter most if:
- Your household depends on your paycheck
- You have a mortgage or rent that would be hard to keep up with during treatment
- You have little sick leave or disability coverage through work
- You want your coverage to be able to help while you’re alive as well as after
You can find living benefits on some term life, mortgage protection, whole life, universal life and final expense policies.
Want to know which policies include living benefits?
CBIS will compare options from many insurance companies and walk you through what each one covers. Call or text CBIS to get started.
Applying for life insurance with living benefits
No payment is required to apply.
You pay nothing until you accept an offer.
- Apply: Tell one of our licensed agents you want living benefits, and we’ll focus on policies that include them.
- The insurance company reviews your application: They look at your health and history to decide whether to offer coverage.
- Get your offer: If you’re approved, you’ll see your price and which living benefits the policy includes.
- Fit it to your budget: Adjust the coverage amount and length until the monthly cost works for you.
- Accept, then pay: You pay only after you accept. Nothing is due up front.
Want more detail on each step? See the full steps on our quote page.
Common questions about living benefits
Will I need a medical exam?
Buying a policy with living benefits works the same as buying any life insurance. Many people are approved from health questions and records checks, and larger amounts may need an exam. When you use a living benefit later, the carrier will ask for medical records from your doctor. A licensed CBIS agent can explain both steps.
Does it cost more to use an independent agent like CBIS?
No. The carrier sets the price of the policy and of any living benefit rider. We don’t charge for quotes or advice, and the carrier pays us if you buy. We can compare the living benefit rules side by side for you.
How do living benefits work?
If you’re diagnosed with a condition your policy covers, you file a claim with the carrier, usually with your doctor’s records. If it qualifies, the carrier pays you part of your coverage while you’re alive, and you can usually spend it as you need. Whatever is left goes to your beneficiaries later. We can help you file the claim.
What kinds of illness qualify?
Most policies group them into terminal illness, chronic illness (trouble with everyday tasks like bathing or dressing) and critical illness (such as a heart attack, stroke or cancer). The policy lists which of these it includes and defines each one. A licensed CBIS agent can show you the exact wording.
How much would I actually get?
Possibly less than the amount taken off your death benefit. When the rider has no added monthly charge, some carriers pay a discounted amount when you use it. Your age and health at the time, how much you take and the policy itself all affect the number. Ask a licensed CBIS agent to show you how a policy figures it before you buy.
Do living benefits cost extra, and are they worth it?
Some policies include them at no added monthly charge, and others charge for them as a rider. They can help pay bills during a serious illness, well before any death benefit is paid. The downsides: using them lowers what your beneficiaries receive, and qualifying can be strict. A licensed CBIS agent can show you how each policy handles this.
Can I add living benefits to a policy I already have?
Usually not. Living benefits generally have to be part of the policy when it’s issued. Many term, whole life and final expense policies include them, though some don’t. We can look over a policy you already have and tell you what it includes.
How are living benefits different from cash value?
Cash value is savings that build inside some permanent policies, and you can borrow against it for any reason. A living benefit is an early payment of part of the death benefit, available only after a qualifying diagnosis. Term policies have no cash value but may still include living benefits.
Will using a living benefit affect my taxes or Medi-Cal?
It might. Living benefit payments are often not taxed as income, but the type of benefit, the amount and your situation all matter. Critical illness payments may be treated differently than terminal or chronic illness payments, so talk with a tax professional before you use one. It can also affect eligibility for programs like Medi-Cal. If you receive public benefits, check with a benefits advisor first.
Talk with a licensed agent about living benefits
Family-owned since 1982, based in Santee. Call or text CBIS to talk with a licensed agent by phone or video call.
Other questions? Contact us.