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How to Get Living Benefits from Your Life Insurance in Ireland

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Life insurance is traditionally seen as a financial safety net for loved ones after the policyholder’s death. However, many people are unaware that certain life insurance policies offer “living benefits”, which can be accessed while the policyholder is still alive.

In Ireland, understanding how to leverage these living benefits can provide significant financial relief during critical times. This blog will explore what living benefits are, the types of policies that offer them, and how to access these benefits in Ireland.

Understanding Living Benefits

Living benefits, also known as accelerated benefits, are features of life insurance policies that allow policyholders to access a portion of their death benefit while they are still alive. These benefits can be invaluable in managing financial burdens associated with serious illnesses, long-term care, or other urgent financial needs.

Types of Life Insurance Policies Offering Living Benefits

Terminal Illness Benefit

Most life insurance policies in Ireland include a terminal illness benefit. This allows the policyholder to receive a portion of the death benefit if diagnosed with a terminal illness and given a life expectancy of less than 12 months.

Critical Illness Cover

Critical illness cover is an add-on to a standard life insurance policy. It provides a lump sum payment if the policyholder is diagnosed with a specified critical illness, such as cancer, heart attack, or stroke. This payment can be used for medical expenses, rehabilitation, or any other financial needs.

Long-Term Care Rider

A long-term care rider is an additional feature that can be added to a life insurance policy. It allows the policyholder to access part of the death benefit to cover long-term care costs, such as nursing home care or home health care services.

Income Protection

Income protection insurance, while not a direct life insurance benefit, can be an essential complement. It provides regular payments if the policyholder is unable to work due to illness or injury, ensuring financial stability during recovery periods.

How to Access Living Benefits

Review Your Policy

The first step is to review your current life insurance policy to understand what living benefits are included. Look for terms such as “accelerated benefits”, “critical illness cover” or “terminal illness benefit”. If you are unsure, contact your insurance provider for clarification.

Meet Eligibility Criteria

To access living benefits, you typically need to meet certain eligibility criteria. For instance, to claim a terminal illness benefit, you must provide medical evidence confirming that you have a life expectancy of less than 12 months. Similarly, for critical illness cover, a diagnosis of one of the specified illnesses is required.

Submit a Claim

Once you confirm your eligibility, the next step is to submit a claim to your insurance provider. This usually involves filling out claim forms and providing necessary medical documentation. Your insurance provider will review the claim and determine the payout amount based on the terms of your policy.

Understand the Impact on Death Benefit

Accessing living benefits will reduce the overall death benefit available to your beneficiaries. It’s crucial to understand this impact and discuss it with your family to ensure they are aware of the potential reduction in the death benefit.

Seek Professional Advice

Navigating the process of accessing living benefits can be complex. Consider seeking advice from a financial advisor or insurance broker who can help you understand your options and guide you through the claims process.

Benefits of Accessing Living Benefits

Financial Relief During Illness

Living benefits provide immediate financial relief during serious illness, helping to cover medical bills, treatment costs, and everyday living expenses.

Flexibility

The funds received from living benefits can be used at your discretion, providing flexibility to address various financial needs without restrictions.

Peace of Mind

Knowing that you have access to financial support during critical times can provide peace of mind, allowing you to focus on recovery and quality of life.

Conclusion

Living benefits from life insurance can be a lifeline during challenging times, providing much-needed financial support. In Ireland, understanding how to access these benefits and what your policy offers is crucial. Reviewing your policy, meeting eligibility criteria, and seeking professional advice are key steps to ensure you can leverage these benefits effectively.

For more detailed information and personalized advice, consider consulting with a reputable insurance provider or financial advisor. They can help you navigate your options and make informed decisions about your life insurance coverage. By understanding and utilizing living benefits, you can ensure financial stability and peace of mind for you and your loved ones.

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This article is for information only. When They Get Older is not a financial adviser. Please consultant an expert before making financial decisions.

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