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Can I Use Term Life Insurance While I’m Living?

July 22, 2021
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Term life insurance is designed to pay your beneficiaries a death benefit if you die during the term. If you outlive the term, which hopefully is the case, it simply terminates and there is no payout.

But is it possible to receive any term life insurance benefits while you’re still living? Yes. There are living benefits with certain term life insurance riders.

Term Life Insurance Living Benefits Riders

Riders, sometimes called endorsements, are add-ons for life insurance policies. Both term and permanent life insurance have rider options.

Term life insurance provides a death benefit to your beneficiaries if you die within the term period. If you have a rider, you may have access to additional benefits. Let’s go over some common term life insurance riders.

Accelerated Death Benefit Rider

An accelerated death benefit rider allows a policyowner to receive a portion of the death benefit early if the insured person is diagnosed with a terminal illness.

Some insurers allow an individual to claim all of the death benefit. If the entire benefit is claimed, the policy is then terminated. If a partial benefit payment is claimed, the life insurance policy can continue with a reduced death benefit and lower premiums.


John bought a $500,000 30-year term life insurance policy when he was 30 years old. He’s now 50 and was just diagnosed with terminal stage-4 lung cancer. His doctor gives him up to a year to live.

John has a wife, three adult children, and six grandchildren.

John sends in a request to his life insurance company and applies for $100,000 in accelerated death benefits. He plans to use this money to take his entire family on a week-long vacation to Hawaii.

He also sends in a beneficiary change form. His wife was originally the sole beneficiary, but now that his children are adults with children of their own, he wants to leave money to them as well.

After receiving the accelerated benefits of $100,000, his policy’s death benefit will be $400,000. When John dies, his wife is to receive 40% ($160,000) and each of his three children will receive 20% ($80,000).

The accelerated death benefit rider is often included on term life insurance policies free of charge.

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Conversion Rider

A conversion rider allows a policyowner to change, or convert, their term life insurance policy into a permanent life insurance policy. They can make this change without undergoing underwriting again; this means no medical exam or health questions. Even if the insured person developed a serious condition like heart disease, the policyowner could still convert the policy. The insured would now be covered his or her entire life, versus just the term.

When you convert a term policy, your premiums will increase. You now own a permanent policy, not a term, and permanent life insurance is more expensive.

Many insurers allow policyowners to do partial conversions. This is when you take only a portion of your term policy’s face amount and convert it to a permanent policy.

By doing a partial conversion, you’ll now own two separate policies: your new permanent one and whatever is remaining of the term policy.


John is paying $20 per month for a 20-year $500,000 term life insurance policy.

He’s diagnosed with chronic kidney disease at age 55. He’s going to get treatment, but knows his condition can’t be cured.

He has 8 years left on his term policy. He wants to convert his policy to make sure his family is taken care of and not left with only medical bills.

He decides to do a partial conversion. He converts $250,000 to permanent and keeps the remaining $250,000 term coverage.

His new premiums will be $450 per month for the $250,000 permanent policy plus $14 per month for the reduced $250,000 term policy.

If he dies within the next 8 years, his family receives $500,000. If he’s still living after 8 years, the term policy expires and he has the $250,000 permanent policy remaining. As long as John keeps paying the premiums, this policy will pay out $250,000 no matter when John dies.

Conversion riders are included on most term life insurance policies free of charge. They’re incredibly beneficial if you are diagnosed with a serious health condition after buying a term policy and are no longer insurable.

Waiver of Premium for Disability Rider

If you become disabled and are unable to earn an income, the waiver of premium for disability rider exempts you from paying premiums but keeps your life insurance coverage active.

In order to use this rider and get your premiums waived, the illness or disability needs to have prevented you from working for a continuous length of time—typically six months. Once medical proof is provided, the rider benefits will start and keep your policy inforce until you’re able to go back to work. The premiums paid on your behalf will not need to be paid back.

There is a small cost to add this rider.


John is 30 years old and applying for a 20-year $500,000 term life insurance policy.

He’s a non-smoker and in great health.

His agent finds him a policy for $19.66 per month.

After going over rider options, he decides to add the Waiver of Premiums for Disability rider. Doing so increases his monthly premium to $22.61 per month.

Unemployment Protection Rider

This rider is similar to the waiver of premium for disability rider, but few insurance companies still offer it. The unemployment protection rider will waive your premium payments if you become unemployed for at least four consecutive weeks. These premiums will not need to be paid back.

There is a small cost to add this rider.


John is 30 years old and applying for a 20-year $750,000 term life insurance policy.

He’s a non-smoker and in great health.

His agent finds him a policy for $38.53 per month.

After going over rider options, he decides to add the Unemployment Protection Rider. Doing so increases his monthly premium to $40.57 per month.

Term life insurance is designed to financially protect your family should you die unexpectedly. However, with these riders, your policy may be useful while you’re alive as well.

In addition to providing peace of mind, your term life insurance policy can protect your future insurability. It can provide cash should you become terminally ill and want to make the most of the time you have left. And it can waive your payments should you become disabled or lose your job.

Ready to get life insurance? Our online term life insurance quoting tool is easy to use. You can see quotes in real time without giving away any contact information.

When you’re ready, the online application only takes a few minutes. After you submit it, a Quotacy agent will reach out and introduce themselves. If you’re interested in adding riders to your policy, your agent can provide information, including cost.

Quotacy is here as your advocate. We’ll help you get the best possible life insurance coverage for your situation.

Note: Life insurance quotes used in this article accurate as of July 9, 2021. These are only estimates and your life insurance costs may be higher or lower.


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