Best Life Insurance with Living Benefits
Jeffrey Manola is an experienced life insurance agent and the founder of Top Quote Life Insurance. His mission when he created Top Quote Life Insurance was to provide online consumers searching for life insurance with the absolute best quotes for term life insurance, permanent life insurance, no medical exam life insurance, and burial insurance.
Not only does he strive to provide you with the …
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Written by
Jeffrey Manola
Founder & Licensed Agent
Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs.
She has since used that knowledge in her more than ten years as a writer, largely in the insur…
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Reviewed by
Leslie Kasperowicz
Farmers CSR for 4 Years
UPDATED: Feb 14, 2022
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Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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Facts You Should Know
Life insurance with living benefits is permanent life insurance with a cash value feature.
Whole, universal, and flexible life insurance policies are all considered life insurance with living benefits.
Almost all life insurance providers sell life insurance with living benefits.
Life brings unexpected financial situations that can leave your loved ones responsible if you are not prepared. Fortunately, investing in a life insurance policy protects your loved ones from bearing the entire burden of end-of-life expenses if something happens to you.
If you are currently researching companies for a new life insurance policy, you have likely run into life insurance with living benefits.
Life insurance with living benefits is a popular permanent life insurance sold by almost all providers. However, as this is a multi-faceted life insurance policy, understanding how it works can be a challenge.
Keep reading to learn more about life insurance with living benefits, including its uses, how it works, its pros and cons, and how it differs from other popular life insurance policies, like term life insurance.
Are you looking to compare adjustable life insurance rates? Enter your ZIP code to get free life insurance quotes from companies near you today.
What is the best life insurance with living benefits?
Essentially, life insurance with living benefits is a permanent life insurance policy that grows cash value over time. Cash value acts as a savings account within your life insurance policy from which you can pull money for different situations, i.e., to take out a loan against it, emergencies, retirement income, premiums, etc.
Cash value is called living benefits because you can access the money before you pass away, as opposed to the death benefit. All life insurance companies have guaranteed death benefits, but not all have living benefits.
Life insurance policies with living benefits include:
Whole life insurance
Universal life insurance
Adjustable/flexible life insurance
With whole life insurance policies, you get fixed rates and a set death benefit for life or until the termination of the policy. So, there is not any wiggle room to a whole life insurance policy, but you know what to expect as far as rates and cash value interest rates.
Universal life insurance is more flexible than a whole life insurance policy. Typically, universal life insurance allows for a change in death benefits and premiums, as long as specific standards are met.
Adjustable life insurance, also known as flexible life insurance, is more similar to universal insurance than whole life insurance. With an adjustable life insurance policy, you can change your premiums, death benefit, and cash value interest rate depending on your financial standing at the time.
Because there are a few life insurance with living benefits options to choose from, deciding on a policy that works for you is often a challenge. Make sure to compare different policies and talk through your options with an insurance agent to land the best life insurance with living benefits for you.
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What are the best life insurance companies that offer living benefits insurance?
Not only are there a few life insurance with living benefits policies to choose from, but there are also tons of life insurance providers. First, of course, you must pick the right fit for you and your needs, but narrowing your options down to only the best can be a lengthy process.
Fortunately, almost all life insurance companies sell life insurance with living benefits. Some of the best life insurance companies that offer living benefits life insurance are:
Mutual of Omaha
John Hancock
New York Life
Haven Life
State Farm
AIG
Before choosing a life insurance policy, be sure to look into your company of interest thoroughly. You may find that the coverage is not exactly what you need or that a company out there suits you better.
As a starting point, check out our New York Life Insurance Review for more specific information about the company, including policies, customer reviews, and more.
What are the pros and cons of living benefits life insurance?
Life insurance with living benefits is valuable in many ways. Otherwise, no one would invest in it. Yet even though it has a good bit of benefits, there are still some downsides to purchasing life insurance with living benefits. Knowing the pros and cons of life insurance living benefits will help you decide whether or not this type of insurance is the right fit for you.
The benefits of living benefits life insurance include:
Guaranteed death benefit
Insurance coverage for a lifetime
Cash value accessibility
Tax benefits
Dividends
A lot of life insurance companies pay dividends to their policyholders. Dividends can be used as cash, but many people reinvest them into their policy for cheaper premiums. As stated above, you can access cash value for loan payments, premiums, emergencies, and more.
Similarly, the interest your living benefits account accrues does so without you having to claim it on your taxes. In most cases, you can even access your cash value without taxing the money.
There is an option to add a living needs benefit rider to your life insurance policy. A living needs benefit rider acts as an accelerated death benefit rider, which advances part of your life insurance policy’s death benefit if you have a terminal illness, are confined to a nursing home, or undergo an organ transplant.
Again, you must understand your life insurance policy fully. Otherwise, you may be susceptible to your insurance company finding a loophole not to pay out your death benefit when you pass. If you need help better understanding your life insurance policy, talk with an insurance agent.
Even though life insurance with living benefits is helpful in a few different ways, there are still several disadvantages that keep people from investing in a life insurance policy with living benefits. Some of these disadvantages include:
It is expensive if you are old or unhealthy
Some insurance companies may not pay out benefits
Complex
Whole and permanent life insurance policies are multi-faceted and expensive, and the cash value feature typically grows interest very slowly over time. So, even though the cash value aspect is beneficial, there may not be enough for you to pull from until later.
The perks of a life insurance policy with living benefits often outweigh that these policies are so much more expensive than term life insurance policies. The decision to purchase life insurance with living benefits depends on your needs and financial situation at the time.
The most challenging part of life insurance with living benefits is how complex the policies are. Because so many features constitute a permanent life insurance policy, it is easy to get lost in the details. Talk with an insurance agent to learn more about the details of your life insurance with living benefits.
Life Insurance with Living Benefits: The Bottom Line
Life insurance with living benefits is an excellent investment for those that need it. Benefits of life insurance with living benefits include fixed premiums for a lifetime, tax benefits, guaranteed death benefits, dividend payouts, and more.
Although life insurance benefits many people, it is vital to understand all the advantages and disadvantages of life insurance living benefits before investing in a policy. After researching different life insurance policies and companies and depending on your financial situation, you may find that life insurance is not for you.
The disadvantages of life insurance with living benefits include higher premiums than other policies, complicated features, and complex life insurance companies that don’t pay out death benefits.
While you search for a life insurance company, we recommend comparing at least three different life insurance companies and policies. Comparing multiple companies and policies gives you a good idea of what to expect from your life insurance policy and helps you get the best life insurance rates and coverage.
After researching companies, it is always helpful to talk with your life insurance agent if you are still unsure.
Now that you know more about life insurance with living benefits enter your ZIP code into our free online tool for instant life insurance quotes from companies near you.
