While life insurance is commonly known as a safeguard for your loved ones after your passing, it can actually play a broader role than one might think. Beyond the typical death benefit, many life insurance policies come equipped with features known as “living benefits.” These provisions allow policyholders to tap into their life insurance benefits under specific circumstances while they are still alive for the benefit of them and their family.
Living benefits can be particularly advantageous in scenarios like serious illnesses or debilitating accidents. For instance, should a policyholder be diagnosed with a terminal illness, certain life insurance policies might allow them to access a portion of the death benefit in advance. This can be instrumental in managing medical bills, household expenses, or even pursuing bucket-list experiences. There are three main types of living benefits:
Disability Insurance
A tax-free monthly income for those unable to work due to illness or injury.
Critical Illness Insurance
A tax-free payment given upon diagnosis of a critical illness like stroke, heart attack or cancer.
Health and Dental Coverage
Covers types of health and dental expenses not covered by provincial or employer plans.
Let’s further explore the different types of living benefits and their coverage in the infographic below:
