Preparing for your financial future involves considering not only the exciting ways you want to spend savings, but also how you might grapple with challenges, such as a medical crisis. Living benefit loans are one option that may arise in your decision-making process, with many financial products, such as annuities, often offering such policy add-ons.
Living Benefit Annuity: How it Works
An annuity is a collection of investments, which can often be diversified to maximize the returns. As part of the portfolio, an annuitant may be able to opt for a living benefit, meaning he or she can draw cash from the value of the annuity if needed. However, there are a number of factors to consider before doing so.
Typically, the policy holder must invest a certain amount in order to guarantee he or she will receive a set living benefit, no matter how the investments perform, which may require a significant amount up front. Additionally, most annuities charge fees for choosing the living benefit feature, which may be paid on a yearly, quarterly or monthly basis, depending on the agreement.
Living benefit annuities typically are divided into the initial investment, known as the income base, and the value of your investments, called the account balance. Investors can withdraw the account balance at any time, but will incur hefty fees; the income base, however, can only be drawn upon if it’s converted into incremental amounts to be paid out over the remainder of one’s lifetime.
In other words, a living benefit annuity may be a good option for those planning for retirement and those who have a nice cushion, but it doesn’t offer much assistance in an emergency situation.
Life Credit: How it Works
That’s where an option like Life Credit could it come.
Life Credit provides living benefit loans to those facing medical emergencies like cancer. The company works with patients’ life insurance carriers to loan up to half of their death benefit for those with at least $75,000 in life insurance. Unlike a living benefit annuity, Life Credit’s program pays the full cash outright and not in increments. That’s especially important for individuals like cancer patients, who may be facing extremely high medical bills and other financial challenges that need immediate attention.
Planning for your financial future is important, but some situations can’t be anticipated. If a crisis like cancer arises, financial resources like Life Credit can provide not only financial security but also the peace of mind that can help patients face their diagnosis with a new outlook.