Definition of "Living death benefits"

Barbara Absalom, TRC , GRI real estate agent

Written by

Barbara Absalom, TRC , GRIelite badge icon

Fillmore Real Estate

Early payout of anticipated death benefits from a rider attached to an existing policy or from a separate policy. The purpose is to allow the terminally ill insured an additional source of finance to pay medical bills and/or nice-to-have items. There are basically two methods for paying out these benefits: the policy-holder gains access to the benefits when the policyholder contracts an illness that has been diagnosed as terminal with a life expectancy usually of less than two years; the policyholder gains access to the benefits when the policyholder is confined to a nursing home or a long-term care facility and can be expected to remain in this facility until death. Generally, as long as the policyholder is expected to die within 12 months of the date of the payment of the living death benefit, and that benefit is discounted only by an amount that is consistent with a life expectancy no greater than one year in duration, the beneficiary (s) is not taxed on the life insurance proceeds.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Search engine site that emphasizes the fields of environmental risk management, environmental engineering, environmental planning, physical and biological sciences, and various ...

Circumstance resulting when government expenditures exceed government income. To finance this difference, the United States Treasury will auction Treasury bills, notes, and bonds. In order ...

Condition of real or personal property when it is damaged or destroyed to such an extent that it cannot be rebuilt or repaired to equal its condition prior to the loss. ...

Clause, generally found in business interruption insurance, that establishes the same indemnification basis as the coinsurance clause. ...

Payment of insurance proceeds for a claim resulting from a loss to insured mortgaged property. ...

Coverage when business records are destroyed by an insured peril and the business cannot collect money owed. The policy covers these uncollectible sums plus the expense of record ...

Important means of preventing accidents and injuries. Insurers take corporate safety programs into account when rating workers compensation and other business insurance policies. ...

Structure separating parts of a building in order to contain the spread of fire. Fire walls reduce the severity of a potential fire and lower premium rates. ...

Same as term Commingled Trust Fund: pooling of assets of two or more pension funds under common portfolio management. ...

Popular Insurance Questions