Life
insurance policies pay the face amount of coverage out as a death benefit to the beneficiary when the person who is insured by the life insurance policy dies, or when the policy matures.
If the money is paid upon the insured's death, it
goes to the beneficiary. If it is paid upon policy maturity, the money goes to
the owner of the life insurance policy.
However,
life insurance companies have begun offering living benefits from their life insurance products.
Many life insurance policies now allow an insured who has been diagnosed with a terminal
illness to use their death benefit during their lifetime.
This allows the
insured and their family to use that money to help pay for medical bills, final
expense planning, and any other reason.
The life insurance company knows that
they're eventually going to pay the death benefit out on a policy for a terminally ill person, and allowing the insured to
use it during their life helps their family.
