The value of a life insurance living benefits rider

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What is a life insurance living benefits rider?

Life insurance provides financial security in the event of death. A policy rider allows you to customize your policy to provide additional protection and/or benefits.  

Riders offer flexibility, enabling whole life, and other types of permanent life insurance policy owners to design a combination of base policies and additional options that best suit their needs. Some riders are automatically included with the insurance policy; others must be requested. Some are included at no additional charge, while others require an additional premium.  


Why do you need a living benefits rider?

  • The living benefits rider1 is popular, because it provides an early payout of policy death benefits, if the insured is diagnosed to have a life expectancy of 12 months or less. Life insurance with living benefits can help make the insured’s remaining time as comfortable and dignified as possible. It can also help with medical expenses.
  • Many terminally ill patients are faced with financial hardships during the worst possible time. While the patient may have substantial collateral in a life insurance policy, those funds are technically “off limits” until the policy owner dies.2
  • A living benefits rider breaks down the “off-limits” fence, enabling the policy owner to access policy proceeds; the amount that can be accessed depends on the type of contract. This payment, which is made to the policy owner rather than to the beneficiary, reduces any cash value that has built up on the policy and reduces the death benefit. 

A living benefits rider enables the policy owner to access eligible policy proceeds when facing a terminal illness.

Policy owners can also access funds through a loan or surrender, but it is possible for a life insurance policy with living benefits to provide more money.3 This is because policy loans or surrenders are usually based on cash value, while the amount available from a living benefits rider is generally based on the policy’s face value, paid-up additions, and (if applicable) an amount payable under a rider that provides a level amount of insurance.

The living benefits rider may be exercised only once. The rider will terminate once a claim for accelerated benefits is made. Exercising this rider will reduce the available cash surrender value and death benefit of this policy. 

New York Life Living Benefits Riders can be added to new policies or to most existing policies issued after 1985 for a one-time charge, which is applied when the rider is exercised.  However, the policy owner must choose living benefits coverage, but it can be added at any time.  

The financial expenses of a terminal illness can be catastrophic, but a living benefits rider can offer some comfort and relief during this difficult time. 

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Want to learn more about living benefits riders?

A New York Life financial professional can help determine what’s right for you.

1Rider benefits can vary by state, and not all riders are available in every state. Your New York Life financial professional can answer any questions you have about a particular rider. 

2Various states have established different life expectancy periods once a terminal illness is diagnosed. There are maximum benefit levels set for this rider. A charge is applied when the rider is exercised. Your agent can provide more specific information. 

3Accessing cash value will reduce the available cash surrender value and death benefit.   

Rider features may differ based on the insurance product that they are purchased with.  Not all riders are available in every state, and some states vary the terms of certain riders. Additional limitations and conditions may apply. Please speak to your New York Life agent for complete information.  

In Oregon, the Whole Life policy form number is ICC18217-50P (4/18). The Living Benefits rider form number is ICC17217-495R.  SMRU 1898174