AD Banker Comprehensive Practice Exam

What are referred to as the living benefits of life insurance?

1. Considered part of the final expenses

2. Called the living benefits of life insurance

3. Not available from any life insurance policy

4. Features available only on term policies

The correct answer is: Called the living benefits of life insurance

Living benefits of life insurance refer to features or options within a life insurance policy that allow the insured to access a portion of the death benefit while they are still alive, typically in the event of a terminal illness, critical illness, or chronic illness. This means that beneficiaries can receive funds to assist them with medical expenses, long-term care, or other financial needs during their lifetime rather than waiting until after death. These benefits provide a valuable safety net for policyholders, as they help ensure that individuals can manage significant health care costs and improve their quality of life when facing serious health challenges. Recognizing living benefits underscores the flexibility and support that modern life insurance products can offer beyond just providing a death benefit for beneficiaries after a policyholder's death. Other options do not align with the definition of living benefits. While final expenses are related to costs incurred after death and are not part of living benefits, features exclusive to certain types of policies or those that aren't available at all also do not contribute to the understanding of living benefits in this context.