Life Insurance With Living Benefits: 2 Birds, 1 Stone

I like the idea of having a chronic illness or critical illness policy that will pay me cash if I get sick and/or could no longer care for myself without assistance. 

What I don't like is having to fork out more money for one more type of insurance.

This is no longer an issue since a handful of life insurance companies are now offering life insurance with living benefits rider, also called accelerated death benefit rider or chronic & critical illness benefits built into their life insurance contracts.

picture of man in wheelchair

Best Term Life Companies with Living Benefits

Below is a list of living benefits term life insurance companies that offer chronic, critical and terminal illness benefits automatically built into their term life insurance coverage at no additional up-front cost:

AIG- QOL Products Only
American Amicable
Columbus Life
Independent Order of Foresters
Life of the Southwest
National Life
North American Company for Life & Health

Transamerica LB
United of Omaha

Whole Life Insurance with Living Benefits

Below are the most competitive whole life or guaranteed universal life insurance companies that include living benefits built into their contract with no additional upfront cost:

American Amicable
American National 
Cincinnati Life
Columbus Life

Independent Order of Foresters
National Life
North American Company for Life & Health
Penn Mutual

Symetra Life
United of Omaha

Other companies like AIG, John Hancock, Lincoln National, Nationwide, Pacific Life and Protective Life allow you to add a chronic illness or Long Term Care rider for an additional cost.

Best Life Insurance With Living Benefits

While we can offer you coverage from all of the companies above, we feel that Columbus Life, North American Company for Life and Health and American National Life currently offer the best life insurance rates/products that include chronic illness and critical illness living benefits.

Columbus Life is the only one that offers a lump sum payment AND a predictable benefit:

Columbus Life’s predictable living benefits offered will payout as follows:

  • Terminal Illness will pay out the lesser of $250,000 or 60% of the policy’s death benefit.
  • Chronic Illness will pay out the lesser of $250,000 or 40% of the policy’s death benefit on term.
  • Chronic Illness will pay out the lesser of $1,000,000 or 50% of the policy’s death benefit on UL.
  • Specified Medical or critical illness will pay out the lesser of $25,000 or 10% of the policy’s death benefit.
picture of woman looking at sign showing predictability one side and possibility other side

Why Is a Predictable Benefit Better?

It comes down to whether or not you want to know exactly what you'll get for a chronic or critical illness claim upfront, or not...

With all of the other carriers, besides Columbus Life, the living benefits offered will be determined at the time you make a claim.

Remaining life expectancy is a factor in all of these other insurance companies chronic and critical illness payout calculations.

All insurance companies besides Columbus Life use a "discounting" method to determine what you'll be paid on a critical or chronic illness claim.

Do you want to know your exact living benefit payout up front?

With the discounted method, you request a specific amount you want for critical or chronic illness.  Then after underwriting of your claim, the insurance companies will pay you a discounted amount from what you requested, but they will still reduce your life insurance policy by the amount you originally requested.

In other words, if you submit the claim for $50,000 and they only end up paying you $10,000, your new policy amount will still be reduced by $50,000.  

There is also always the possibility that no living benefit could be paid or only a very small benefit could be paid if these other companies deem your life expectancy as being too long.  You could always reject the offer if you're unsatisfied.

If Predictable Benefit Is Not Important To You...

North American Company for Life & Health and American National Life (ANICO) also offers great term life products with chronic and critical illness benefit rider built-in at no additional cost.

North American and ANICO have great rates, often at a lower cost than Columbus Life and the other companies that offer these living benefits.

North American and ANICO do use the "discounted method" mentioned above when determining the amount to be paid out for a chronic and critical illness claim, which may be a negative if/when you submit a claim. 

North American and ANICO also have a great conversion option and they both currently allow conversion to ANY of their permanent insurance products...NA allows conversion up to age 70 or 75 and ANICO allows conversion up to age 65 and they both also include living benefits on their permanent products! 

If you convert to longer coverage, you'll also have the chronic and critical illness benefits on the converted policy.

What Does Term Life with Living Benefits Cost?

Below is a comparison of American National, North American and Columbus Life's lowest/best term rates with living benefits. 

These are only examples and are all "preferred plus" $250,000- 20 year term monthly rates rounded to nearest $:

Male Age          ANICO      N. American      Columbus Life
40                        $19               $20                    $24
50                        $43               $44                    $46
60                        $116              $115                    $142
65                         n/a              $219                   $226

Female Age       ANICO      N. American       Columbus Life
40                          $18              $17                      $20
50                          $35              $34                     $35
60                          $86              $82                     $88
65                           n/a              $141                    $145

So as you can see from above life insurance quotes, the cost to buy a term policy with living benefits is relatively inexpensive. 

The cost difference will vary depending on your age, overall health and other underwriting criteria (i.e. family history, driving record, hazardous avocations, etc.). 

More and more companies are not automatically requiring a medical exam, but they may still request medical records if you have health conditions. 

What is Best Living Benefits Policy for You?

Instead of buying stand-alone long term care and/or critical illness insurance policy, which is always an option, Columbus Life’s term with chronic and critical illness benefits and with a predictable benefit may be a great option  

Like ANICO and North American, Columbus Life also allows you to automatically convert to ANY of their permanent life insurance products (that also include chronic/critical benefits up to your age 70).

American National will payout 100% of the life insurance amount for both chronic and critical events (up to $2,000,000 max), and they have more critical illness "triggers" or living benefits available than the other companies.

North American will pay out the lesser of 24% of the face amount or $480,000 per election for chronic illness, but you can select a payout every 12 months.  Critical Illness maximum amount that can be accelerated is the lesser of 90% of the face amount or $1 Million. 

Your exact wants and needs for life insurance with living benefits, and what you're willing to pay may determine which is the best policy for you.  

Living Benefits Life Insurance Definition- Chronic Illness

For most insurance companies, including Columbus Life, North American, and ANICO, the definition of chronic illness is as follows in most States:

"The insured: 1) has been unable to perform (without substantial assistance from another individual) at least two Activities of Daily Living (ADL's) for a period of at least 90 days due to loss of functional capacity; or 2) requires substantial supervision to protect himself/herself from threats to health and safety due to severe cognitive impairment."

The six ADL's are eating, bathing, continence, dressing, toileting and transferring (i.e. moving in and out of a bed or chair).  

The chronic illness triggers are similar to what is required to receive benefits from a long term care insurance policy. 

Some insurance companies like North American Company do require that the chronic disease will be a permanent issue to qualify for the benefit. 

Columbus Life and ANICO do NOT require chronic illness to be a permanent condition to collect a portion of the death benefit while still living.

picture of man in hospital gown with intravenous fluids

What Is A Critical Illness Living Benefit Option?

Columbus Life also refers to critical illness benefits as specified medical conditions.

Here is Columbus Life's description of the payout in most States:

"Specified Medical Condition- The insured has been diagnosed with one of the following: Acquired Immune Deficiency Syndrome (AIDS); first coronary angioplasty; first coronary artery bypass; first myocardial infarction; end-stage renal failure; major organ transplant; medical condition requiring continuous life support; stroke; or life-threatening cancer." 

Below is ANICO's list of covered critical illnesses that may be included for a claim:

Heart attack, stroke, invasive cancer, end-stage renal failure, major organ transplant, ALS, blindness, paralysis, arterial aneurysms, central nervous system tumors, major multi-system trauma (i.e. injury to 3 or more organs), AIDS, severe disease of any organ (resulting in significantly altered life expectancy), severe central nervous system disease, major burns (i.e. 3rd degree and greater than 40% body surface area), loss of limbs. 

Below is North American's covered critical illnesses that may be included for a claim:

Heart attack, different types of cancer, stroke, major organ transplant, and kidney failure.  

What exactly is life-threatening cancer?  

Here is Columbus Life's definition of life-threatening cancer in most States:

"A malignant neoplasm (including hematologic malignancy), which is characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue, and which is not specifically hereafter excluded. The following types of cancer are not considered a life-threatening cancer: prostate cancer staged less than T2NOMO or equivalent staging; carcinoma in situ; pre-malignant lesions (such as intraepithelial neoplasia), benign tumors or polyps; any skin cancer other than invasive malignant melanoma in the dermis or deeper, or skin malignancies that have become life-threatening cancers.  Life-threatening cancer must be diagnosed according to a pathological diagnosis or a clinical diagnosis"

Think You'll Never Need Living Benefits...Think Again

Check out these stats:

  • There were over 1.6 million new cancer cases in the United States in 2017
  • About 92 million Americans are living with some sort of cardiovascular disease or the after-effects of a stroke according to the American Heart Association and American Stroke Assoc.
  • Many people are unable to work for a long time after one of these ailments, and 32 months is the average for one long term disability absence.
  • Medical bills and problems were a cause of 50% of foreclosures and 62% of all bankruptcies.

Being able to get cash from a life insurance policy while you're still living or for your beneficiary at death makes these new type of living benefits life insurance policies extremely valuable for you and your loved ones!

Gone are the days where you must die for someone ELSE to get money from your life insurance plan!

These new living benefits term insurance policies can also prevent you from having to buy two or more separate policies, one for critical and chronic illness or long term care and another for life insurance.

Life Insurance with Chronic Illness Living Benefit for Seniors

Many seniors who have a concern about paying for long term care or home health care, but don't choose to buy an individual long term care insurance policy, are buying these permanent life insurance policies with chronic illness benefits with the dual intent of providing money to their beneficiaries at death OR to help pay for care while they're still living. 

Having to pay for long term care "out of pocket" could completely wipe out your savings account!!

Or having to rely on family members for support could greatly diminish their quality of life. 

According to the U.S. Department of Health and Human Services, about 70 percent of individuals over age 65 will require at least some type of long-term care services during their lifetimes. Over 40 percent will need care in a nursing home for some period. 

The average annual cost of long term care in a facility is $82,128.

The average annual cost of home health care is $43.536.

Other facts and statistics regarding long-term care point to its growing prevalence:

  • More than 6 million elderly Americans need assistance from family or friends if they are to live at home.
  • At least two-thirds of all home-care assistance is provided for free by family members and friends.
  • By the year 2020, one of six Americans will be 65 or older.
  • Of people turning 65, 69 percent will need some long-term care before they die.
  • More than half of the U.S. population will require some type of long-term care during their lives (nursing home care, home health care, assisted living, or rehabilitative facility care).
  • Of men turning 65, 58 percent will need some long-term care.
  • Women are more at risk than men—once they turn 65, 79 percent of women will need some long-term care at some point before death.
  • Among those turning 65, 52 percent will need long-term care for at least one year before they die, and 20 percent will need more than five years of care.
  • The average nursing home stay is approximately two and a half years.
  • After 2021, the population in nursing homes is expected to increase substantially. This is the year the oldest baby boomers will turn 75. As the population ages, research has predicted the nursing home population to grow to three to four million residents.
picture of old man with cane

Key Man Life Insurance with Living Benefits

If you're a business owner that wants to insure your key people, then there's no better type of life insurance then one that can also pay out living benefits.

Chronic or critical illness could prevent your employees from working for a while.

If you have one policy that can protect for death or a loss of your employee due to a chronic or critical illness, isn't this the ultimate product?

The same thing goes if your using life insurance to fund a buy-sell agreement. 

Why apply for life insurance that will only payout for death, if you can also get a policy that will payout if your business partner or key employee is no longer able to work due to a chronic or critical illness.  

Health Problems and Life Insurance with Living Benefits

If you have health problems, you still may be able to qualify for a policy that offers the living benefits mentioned above with North American, ANICO, Columbus Life or one of the other companies...

But this is going to depend on your particular history and the severity of your condition.

Let's start with the most common health issues that we see, and what kinds of cases can still qualify for Living benefits:


If you were diagnosed with diabetes over the age of about 35 to 40, your diabetes is well controlled with oral medication, and your overall health is pretty good otherwise, then you may be able to qualify for life insurance for diabetics policy with living benefits.

We have also had well-controlled diabetics diagnosed prior to age 35 qualify for policies with living benefits, but the younger your age of diagnosis and the longer you’ve had diabetes, the tougher it will be for you to qualify for a policy with living benefits.

Heart Disease:

If you have coronary artery disease diagnosed at about age 45 to 50 or older, with no more than mild heart damage and relatively good health otherwise; or if you have very well controlled A-fib or another more benign type of irregular heartbeats, or a minor heart valve repair above the age of 50 to 60; then you may also be able to qualify for a policy with living benefits.

If you have more extensive coronary artery disease with two or more stents or that required a double, triple, quadruple bypass, or if you have a more significant cardiac history, then you may not be able to qualify for a policy with living benefits.


To qualify for a policy with living benefits if you’re obese and your health is good otherwise, below is a chart that shows the approximate weight you’ll have to weigh less than to qualify for a decent rate with living benefits:

5’ 0” tall- 217 pounds
5’ 1” tall- 224 pounds
5’ 2” tall- 232 pounds
5’ 3” tall- 239 pounds
5’ 4” tall- 247 pounds
5’ 5” tall- 255 pounds
5’ 6” tall- 263 pounds
5’ 7” tall- 271 pounds
5’ 8” tall- 279 pounds
5’ 9” tall- 287 pounds
5’10” tall- 296 pounds
5’11” tall- 304 pounds
6’ 0” tall- 313 pounds
6’ 1” tall- 322 pounds
6’ 2” tall- 331 pounds
6’ 3” tall- 340 pounds
6’ 4” tall- 349 pounds
6’ 5” tall- 358 pounds
6’ 6” tall- 367 pounds

Living Benefit Companies Underwrite Differently 

We regularly correspond with underwriters at Columbus Life, ANICO, North American and other companies that offer living benefits, and the guidelines that these companies use to determine what rate they’ll offer you or if you can or cannot qualify for a policy with living benefits are not always in black and white.

What I mean is that if you may be a couple of pounds over the maximum allowable weights above, but everything else checks out as really good (i.e. your cholesterol, blood pressure, blood sugar, etc.), then a good insurance agent may still be able to get you a policy with living benefits.

Or if you've had 2 stents placed at age 49, for example, and all of your other coronary arteries showed no evidence of blockage and your health is good otherwise, then you still may qualify for a policy with living benefits.

Or if you're an insulin-dependent diabetic, but with optimal control, then you may still be able to qualify for a policy with living benefits.

Each case is different and needs to be shopped thoroughly

We need to shop each case when there is a preexisting health issue with ALL of the companies that offer living benefits to determine which ones may be best.

There are term carriers that offer living benefits that can be more liberal for people with preexisting health issues than Columbus Life, so there may still be life insurance with critical and chronic illness riders available to you if you have some more serious health issues or if your weight is higher than shown above.

These companies that offer life insurance with chronic/critical illness living benefits underwrite a little bit differently than the insurance companies that just offer regular life insurance that only pays out for death. The reason is because of the higher likelihood that the living benefits companies may have to pay out claims.

Pros and Cons of Living Benefits Life Insurance

The most important thing to remember is that you won't usually be required to use the accelerated living benefits if you don't want too.  The only exception to this may be if a long term care facility requires payment from you that you are unable to pay. 

Being able to access money from your life insurance policy while still living is a great benefit should you ever need it.

Remember that many bankruptcies and foreclosures are caused by health-related issues, and a life insurance policy with living benefits could save you from financial ruin! 

If you're a senior or anyone concerned about how you'd pay for possible long term care someday, then living benefits life insurance may be a great option for you.  

The negative of living benefits

The biggest negative about a life insurance policy with living benefits is that if the LB's are used, your beneficiary will not receive the full amount of life insurance that they may require to replace your income in the event of your premature death.

You may also be angry later if you make a living benefits claim from one of the companies that use the "discounted method" of paying claims and you don't get the payout you're expecting, but your ultimate death benefit amount still decreases by the total amount of the original claim request.   

Columbus Life’s plan with the predictable payout is nice in that you know exactly what you'll get, but Columbus Life treats the living benefit payout as a lien for which they will charge interest. 

As of right now, Columbus Life is charging an 8% interest rate on living benefit liens, which can also just be deducted from the life insurance amount that your beneficiary would ultimately receive upon your death.

You do not have to make an interest payment to Columbus Life each year after a claim, but the ultimate death benefit that your beneficiary receives will be reduced by the amount of money you take after a claim including interest.

Bottom Line- Life Insurance with living benefits

If a policy with chronic and critical illness living benefits is only slightly more expensive than a policy without, then we'll always recommend the policy with the better living benefits.

But the choice is yours with regard to buying life insurance and whether you want the absolute lowest rate or the lowest rate with the living benefits, we can help you...

Gone are the days when the benefits of life insurance are only for your family/survivors after you pass away.

Rates, products, and benefits can vary from state to state and they can change, so the above is only general information that will need to be verified based on the state where you live and at the time you ultimately decide to apply. 

This is a market that will continue to change and evolve and we expect more and more companies to start offering "living benefits".

Click on the link below to get an accurate quote or call or text us 800-380-3533 or CLICK HERE to email us at if you’d like more information about life insurance with chronic and critical illness living benefits mentioned above.

Scroll to Top