We think of insurance as an investment designed to take care of our families in the event of our deaths. But what happens if you become seriously ill and rack up big medical expenses that aren’t covered by your health insurance? How will you pay your bills if you get sick for an extended period of time and are unable to work? How will you avoid financial hardship if you’re diagnosed with a chronic illness and have to pay for medication out of pocket?

Life can quickly go sideways on you, and if you’re not prepared it can create crushing debt.

What should you do? How do you avoid the worst-case scenario?

If you’re buying a term life insurance policy, you may want to consider adding a living benefit. A living benefit gives you the flexibility to receive an advanced payment on the policy’s death benefit in order to cover certain expenses during your lifetime.

A typical living benefit rider on a term life insurance policy would cover things like:

Terminal illness.

If a doctor diagnoses you with a terminal illness and a life expectancy within the threshold defined by the policy, your insurance would pay out as much as 100% of the full benefit while you’re still alive. This money could be used to pay living expenses and medical bills.

Critical illness.

If you have a major medical event like a heart attack, stroke, or cancer diagnosis, the policy would pay out a defined percentage of its total value.

Chronic illness.

In the event of heart disease, stroke or other chronic illness, the policy’s living benefit could help you pay for medical treatments as well as make up for lost income.

Don’t be caught off guard. Making sure you have enough insurance doesn't just include taking care of your loved ones in the event of your death. It also includes investing in a policy that will prevent devastating financial hardship if you become chronically, critically or terminally ill.

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