Term Life Insurance With Living Benefits (3 Best Companies)

​The central part of term life insurance is the death benefits. It’s what most people think of, the cash your beneficiaries receive when you pass away. Term costs significantly less than permanent life insurance in part because it is so simple.

​But there is another part of term life insurance less well-known, living benefits.

​Some life insurance companies offer additional protection above and beyond death benefits. These extra features (called riders) can add to the usefulness of your policy, particularly while you’re alive.

​Quick Summary

​Life insurance companies add living benefits to policies so that clients can take advantage of their life insurance during their lifetime. There are several different types allowing for different options.

​Living benefits are rare on term life policies. For that reason, we are showcasing three of the best term life policies with living benefits.

If you have questions at any point, you can leave them in the comments or give us a call at (858) 703-6178.

​What are Living Benefits?

Living benefits mean that you can access a significant portion of the death benefits while you are still living. The death benefit (also called face amount) is the dollar amount that will go to your beneficiaries when you die.

​You will also hear the terms “accelerated benefits rider” and “accelerated death benefits” referring to living benefits. They’re all different terms for the same name, depending on the company are looking into.

​These living benefits are not the only riders you can add to a term life insurance policy. There are all sorts of add-ons you can take advantage of to customize your policy to fit your family.

​Reasons to Buy Term Life Insurance with Living Benefits

​Chronic conditions are common, and an expected risk of aging. 40 million Americans have chronic diseases that limit their daily activities in some way, according to the American National Health Council. 133 million (about 40% of the population) have some type of chronic illness.

​Experts expect this number to rise to 157 million in the next couple of years. That doesn’t take into consideration the 81 million people who have multiple chronic illnesses.

​A major issue people have to deal with when faced with a diagnosis of chronic illness is the immense cost involved with treatment. The New England Journal of Medicine recently published a study that found people managing chronic conditions only receive 56% of the recommended preventative health care services.

Chronic disease in American represents 75% of all health care costs. Most people can’t afford to pay for all the long-term costs involved with managing a chronic disease.

​Then there is a whole list of expenses that come with caring for chronic illnesses that most health insurance plans don’t cover in full or at all. Costs like:

  • ​Nursing home care
  • Extended hospital stays
  • Medications
  • Home care
  • Loss of income while ill

​Living benefits on a life insurance policy can help. They’re a means to protect your family from the ruinous costs of medical care stacked on top of lost income.

​While several insurance companies offer life insurance with living benefits, the following three have the best living benefits riders to add on a term life insurance policy.

  • ​American National Life Insurance Company
  • Ameritas Life Insurance Company
  • Mutual of Omaha Life Insurance Company

​American National Signature Term Life Insurance with Living Benefits

American National Signature Term with Living Beneits

​American National has a fantastic living benefits rider (they call it Accelerated Benefits Rider or ABR) in addition to one of the easiest underwriting processes out of any top-rated life insurance company.

​American National Accelerated Benefits Riders

​You have three living benefits options you can add to your policy at no additional premium. You must apply for a Signature Term policy to qualify.

​Accelerated Benefits for Terminal Illness

​You can take advantage of ABR for Chronic Illness if you become unable to perform two of the six activities of daily living. These are bathing, continence, dressing, eating, toileting, or transferring. American National also classifies severe cognitive impairment (like Alzheimer’s) a chronic illness qualifying for these benefits.

​Accelerated Benefit Rider for Critical Illness

​ABR for Critical Illness will advance benefits if you are diagnosed with one of the following conditions:

  • ​Heart Attack
  • Stroke
  • Invasive Cancer
  • End Stage Renal Failure
  • Major Organ Transplant
  • ALS
  • Blindness
  • Paralysis
  • Arterial Aneurysms
  • Central Nervous System Tumors
  • Major Multi-System Trauma
  • AIDS
  • Severe Disease of Any Organ
  • Severe Central Nervous System Disease
  • Major Burns
  • Loss of Limbs

​There is a waiting period of 30 days on all of these to make sure the condition is not temporary or misdiagnosed. American National has one of the broadest definitions of critical illness that you’ll find anywhere in the insurance market.

​Minimum Death Benefits to Qualify for Accelerated Benefits Riders

  • ​Minimum policy amount for terminal illness – $25,000
  • Minimum policy amount for chronic and critical illness – $50,000

​Maximum Death Benefits Eligible for Accelerated Benefits Riders

  • ​$2,000,000 for ages 18 to 65
  • $1,000,000 for ages 66+

​Note there is no minimum for a partial acceleration request. If the face amount of the policy is reduced below the minimum required for approval, the partial request will be denied. If approved, American National can pay the amount as a lump sum. It could also be applied to other settlement options stipulated in the contract.

​Keep in mind the Children’s Term Rider is not eligible for acceleration requests.

​There is also a $500 administrative fee.

​State Deviations

​California and New York both have different guidelines than the other 48 states. If you live in either state, see the additional details listed below.

​Some of these rules seem odd, but insurance companies add extra regulations for certain states to adhere to the state insurance regulations.

​California State Residents

  • ​American National requires a supplemental application to determine eligibility for critical and chronic illnesses
  • Chronic and Critical Illness riders are not available for anyone 65 years of age or older
  • Chronic Illness Rider is not available in conjunction with term coverage whether it is the base policy or a rider

​New York State Residents

  • ​Critical Illness Rider is not available
  • Chronic Illness Rider requires a supplemental application
  • Chronic Illness Rider benefits require a healthcare practitioner’s certification for that illness
  • Chronic illness also requires a health care practitioner to provide a certificate to show that continuous care is necessary for the remainder of the applicant’s life
  • The maximum benefit paid for a chronic illness must not exceed the annualized per diem in effect for your long term care services

​Disability Waiver of Minimum Premium Rider

Disability waiver of premium rider

​The disability waiver of minimum premium allows you to skip paying policy premiums if you become disabled according to the rider’s definition of disability. It’s available for people 55 and under. The rider expires at age 60.


​The insured must be totally disabled. You will need proof from your doctor saying that you cannot work. The term “total disability” means the insured person is incapacitated due to disease or injury.

​You cannot be gainfully employed in any occupation which you are qualified to perform or become qualified to perform. The disability must be for at least six consecutive months.

​The following situations qualify for total disability:

  • ​Permanent loss of all sight in both eyes
  • ​Severed loss of both hands at or above the wrist
  • Severance of both feet at or above the ankle
  • Severance of both one hand at or above the write, and one foot at or above the ankle.

​Anico Signature Term Rider

​The Anico Signature Term rider allows you to buy additional term life insurance on yourself (if you’re the insured on the policy), a family member, or an associate for whom you have an insurable interest.

​Remember, insurable interest means that you have a financial interest in the person continuing to live.

​You can add the Anico Signature Term Rider either as an annual renewable term or for a period of 10, 15, 20, or 30 years.

​The death benefit on the rider must be at least $25,000. It also cannot exceed 4x the death benefit on the base policy.

​Children’s Term Rider

​American National offers the option to add a child’s term rider onto a policy. The term will expire when the child reaches age 25 or when the insured person reaches age 65. The child does not have to be the biological child of the insured. Step-children, legally adopted children, and children born/adopted after the policy starts are also eligible.

​Other points to note:

  • ​Coverage is available in $1,000 units
  • Coverage ranges from $1,000 to $25,000 per child
  • Children must be at least 15 days of age to qualify
  • Children must also be under 18 years old
  • The insured must be between 18 and 55 years old
  • Once the child reaches 25, they can choose to convert the term policy into a permanent life insurance policy for up to 5x the original coverage amount.

​Ameritas FLX Living Benefits Term Life Insurance

Ameritas FLX Living Benefits Term Life Insurance

​Ameritas offers term policies in increments of 10, 15, 20, 25, and 30 years. They are also one of the more affordable term life insurance companies on the market.

​Their living benefits give you the option to take out a lump-sum advance on your term policy by up to 90% of the face amount. This applies to terminal illness, chronic, illness, and critical illness.

​Regrettably, living benefits are not yet available in California.

​The issue ages depend on your risk class and are a little tricky regarding age versus term length. The current issue ages are as follows:

  • ​10-year term: 10 – 80 years old
  • 15-year term: 18 – 75 years old
  • 20-year term: 18 – 70 years old
  • 25-year term: 18 – 50 years old
  • 30-year term: 18 – 50 years old

​Living Benefit Requirements

​You can get up to 90% of your death benefits before you pass on, up to a maximum of $1.5 million. You must qualify for one of the three scenarios before Ameritas will advance you the money.

​Terminal Illness – Your life expectancy is 12 months or less. A physician must certify this diagnosis.

​Chronic Illness – You develop a severe cognitive impairment (Alzheimer’s or a similar disease) or an inability to perform 2 of the 6 activities of daily living for at least 90 days. The activities of daily living (ADLs) are:

  • ​Dressing
  • Toileting
  • Transference (moving in and out of bed)
  • Continence
  • Eating
  • Bathing

​Confirmation must be provided by a physician every 12 months.

​Critical Illness – Allows for 15 qualifying medical conditions. These are:

  • ​Invasive, life-threatening cancer
  • Stroke (30 day waiting period)
  • Paralysis of 2 or more limbs (90 day waiting period)
  • End-stage renal failure
  • ALS (Amyotrophic Lateral Sclerosis)
  • Major Heart Attack
  • Blindness due to diabetes
  • Aplastic Anemis
  • Major organ transplant
  • Heart valve replacement
  • Coma (96 hour waiting period)
  • Aortic aneurysm
  • Benign brain tumor
  • Major burns
  • Coronary artery bypass graft surgery

​Manner of Payment for Living Benefits

​With living benefits, you can receive a lump sum for critical or terminal illnesses. For chronic diseases, the insurance company can pay you either as a lump sum or in installments. For installments, the amount available must exceed the limited declared by the IRS under the HIPAA per diem limits.

How living benefits are paid

​Ameritas doesn’t require you to take the full amount of benefits immediately. You can accelerate your benefits up to 5 times throughout the life of your term policy.

​The absolute maximum amount of face coverage eligible for living benefits it $1,666,666.66 for all your combined policies.

​Additional Riders Available with Ameritas’ Term Policy

​These increase your premium a little bit over the base policy.

​Accidental Death Benefit Rider – If the insured person passes away within 180 days of an accident, the policy will pay an additional death benefit. There are some restrictions on how much you can buy in what age ranges. The table below shows the what’s available for each age bracket.

​Age​Terms Available (in Years)​Min. Benefit​Max Benefit

​18 – 20

10, 15, 20, 25, & 30



​21 – 25

10, 15, 20, 25, & 30



​26 – 55

10, 15, 20, 25, & 30



​56 – 60

10, 15, 20, 25, & 30



​61 – 65

​10 & 15



​Children’s Rider – Unlike other insurance companies, Ameritas provides up to $25,000 of convertible term insurance for all of your children on the one rider. You, as the insured, must be between the ages of 18 and 55. Your children must be between the ages of 15 days and 18 years. If your child wants to convert the rider to a permanent policy, they must convert the policy within 31 days of their 25th birthday.

Waiver of Premium for Disability Rider – You won’t have to pay your premiums if you are disabled (cannot do your job according to your doctor) for more than 6 months. The disability must also begin before age 65. Waiver of premium for disability is available up to age 55.

​​Mutual of Omaha Term Life Express with Living Benefits

Mutual of Omaha Term Life Express with Living Benefits

​Mutual of Omaha offers living benefits with their policy Term Life Express. You can get this in 10, 15, 20, or 30-year terms.

​You can get anywhere from $25,000 to $300,000 in benefits. It’s also a simplified life insurance policy, meaning you won’t have to take a medical exam. Just answer several medical questions on the application, and you’ll hear back in a couple of weeks.

​There are limits to how much you can purchase, depending on your age. Anyone 18 to 50 can get the full range of up to $300,000. However, if you’re between 51 and 65, you are limited to $250,000. Beyond 65, you will need to look at a different term policy with Mutual of Omaha. It’s normal for insurance companies to limit ages on simplified issue policies.

​Return of Premium Affects Your Living Benefits

​You can choose either level term life insurance, or you can opt for a partial return of premium on this policy. Level means that neither your benefits nor your premiums change for the life of your policy. Partial return of premium means Mutual of Omaha will pay you back a portion of your premiums if you cancel or surrender your policy.

​Having return of premium on your policy will affect your access to your living benefits.

​Living Benefits Available at No Extra Premium (Return of Premium Policy Only)

​Mutual of Omaha includes an Accelerated Death Benefit Rider at no extra charge on the return of premium version of this policy.

​If your doctor believes you have less than 24 months to live, you can choose to get 92% of your death benefits advanced as a lump sum. In Indiana, Oregon, and Washington, the lump sum is 94%. Florida also has a 94% lump sum, but you must have less than 12 months to live.

​The catch is that once Mutual of Omaha advances you the benefit, they cancel your policy. It becomes a decision between you, your family, and possibly a financial advisor on whether it’s better to have the 92% or 94% now or wait so your family can receive the full death benefit.

​Living Benefits Available at No Extra Premium (Non-Return of Premium Policy Only)

​Non-return of premium policies also have living benefits without any extra charge. However, they are slightly different than the living benefits on the return of premium option.

Term Life Insurance Living Benefits Riders
​Adding riders to your life insurance policy is akin to customizing your frozen yogurt. The difference is that living benefits can ​help you later, whereas frozen yogurt is almost always instant satisfaction.

​The first significant difference is that the maximum withdrawal amount cannot exceed 80% of the total death benefits. Secondly, the type of living benefits in this policy differ. You get a chronic illness rider, a terminal illness rider, and a critical illness rider.

​Chronic Illness Rider – You are unable to perform 2 out the 6 activities of daily living for at least 90 consecutive days. You can also qualify if you need daily supervision to prevent self-harm due to a cognitive dysfunction. Your physician must certify either scenario.

​The activities of daily living are:

  • ​Bathing
  • Continence
  • Dressing
  • Eating
  • Toileting
  • Transferring

​Terminal Illness Rider – You qualify if your physician believes you have 12 months to live or fewer.

​Critical Illness Rider – If your physician diagnoses you with one of the following illnesses, you can ask Mutual of Omaha to advance your benefits:

  • ​ALS
  • Kidney failure
  • Life-threatening cancer
  • Major organ failure
  • Heart attack
  • Stroke

​Other Riders Included

​There are a few other riders that also come with the policy at no extra charge. These are:

  • Residential Damage Rider – Mutual of Omaha will waive your premiums for the base policy and any riders for 6 months if your primary residence sustains over $25,000 in damage.
  • Waiver of Premium for Unemployment Rider – Mutual of Omaha will waive your premiums for six months for qualifying unemployment events.
  • Common Carrier Death Benefit Provision – If you pass away as a fare-paying passenger on a common carrier (think airplane or taxi), the policy will provide an additional death benefit. The additional benefit is the lesser of your policy face amount or $250,000.

​Additional Riders for Extra Premium

​You can further customize Mutual of Omaha’s Term Life Express. The following riders will cost extra if you choose to add them. Make sure to talk to your insurance agent about what makes sense for your family.

  • ​Disability Income Rider (not available for return of premium policies)
  • Disability Waiver of Premium Rider
  • Accidental Death Benefit
  • Dependent Children’s Coverage

​Comparison Chart of All Three Companies

​It can be a lot to take in when you’re comparing different policies, and everything is named differently. To help clarify, we built a chart. If you have any questions, please give one of our agents at all at 858-703-6178.

​American National​Ameritas​Mutual of Omaha
​No. of Living Benefits




​Maximum Benefits

​100% at $1 Million

​90% at $1.5 Million

​ 80% at $1 Million

​Chronic Illness Definition

​24 months or less

​12 months or less

​12 months or less

​Terminal Illness Definition

2 of 6 ADLs

2 of 6 ADLs

2 of 6 ADLs

​Critical Illness Definition

​15 Health Conditions

​17 Health Conditions

​8 Health Conditions

​Conclusions on Term Life Insurance with Living Benefits

​All three companies provide great life insurance policies. The living benefits on each one add ​extra bonuses for people looking to make the most out of their term life insurance. Some types of policies you can buy separately, like critical illness. Others, like terminal illness insurance, but be added as a rider.

​How Abrams Insurance Solutions Can Help

​Life insurance with living benefits doesn’t have to be exclusive to expensive permanent life insurance policies. These three top-rated companies offer them on a term policy so more people can take advantage of them.

​We work with over 70 of the top-rated life insurance companies in the nation because we are an independent life insurance agency. That means we don’t have to work for any one particular company. We can customize an insurance policy that fits your family, not shoehorn you into a policy that’s the closest fit.

​Suffering a life-threatening medical condition is rough on everyone around you. Worse, it can tear through any savings or assets you’ve accumulated. Life insurance with living benefits is one way to help insulate your family against expensive medical conditions.

​If you have any questions, give us a call at 858-703-6178. We are happy to help, and there is never any obligation to buy.