This article describes how to apply for a living benefit (also known as an accelerated death benefit.)

Before You Apply For A Living Benefit Under Your Life Insurance Policy

If you determine that you may be eligible for a living benefit:

• Call your doctor and let him or her know what you are doing. Is he or she agreeable to providing a "life expectancy" so that you can obtain a living benefit from your life insurance company? (Don't be surprised if you have to explain to the doctor what a "living benefit" is.) If the doctor is not willing to write that you have a life expectancy short enough to fit the company's requirements, is there another doctor who is willing to complete the papers for you? Insurance companies usually only require that a doctor complete the paper work - not that the doctor has to be your specialist.
• Read Cautions,(below). Then contact the insurance company and request the papers necessary to apply for a living or accelerated death benefit. You may even find the necessary papers on the company's web site.
• Before you receive the check, think through what is the best place to park the money until you are ready to use it.

Before contacting the insurance company to inquire about a living benefit, much less applying for one: 

• If your policy is less than two years old, review the application for the insurance to be certain that all of the information you provided in order to obtain the coverage was accurate. During the first two years of any policy, the insurance company that issues the policy has a right to contest the validity of the policy. You want to make sure that they have no reason to do so.
• During your initial inquiries about a living benefit with the insurance company or your employer, you do not have to disclose your condition or diagnosis. This doesn't mean that you won't be asked about your condition, however. If asked you may politely respond that you don't wish to discuss it. We recommend giving an insurance company as little information as possible at least until you are able to determine if you may be eligible for the living benefit.

To learn more about living benefits, including how to find out if your policy has one or one can be added, see New Uses of Assets -- A Living Benefit From The Life Insurance Company.

Be sure to continue to pay premiums on your life insurance policy until the process is complete.

• Under no circumstances should you ignore any premium that becomes due during the process of applying for a living benefit. It is your responsibility to make sure that the policy remains in force.
• If you are unable to make premium payments as a result of your financial situation, utilize all of your available resources to keep the policy in force. Don't forget to consider friends or family as possible sources of short term help. You may also consider contacting a local disease specific non-profit organization for assistance.
• Note: If you appear eligible for a Living Benefit, then you would likely be eligible for Disability Waiver of Premium if your policy contains such a provision.

For information see:

• How To Apply For A Living Benefit If You Have An Individual Policy
• How To Apply For A Living Benefit If You Have A Group Policy  
  
• If You Have Federal Employees Group Life Insurance (FEGLI)  
  
• When You Receive Payment For A Living Benefit  

• Complete the application. Make a copy "just in case." Send or take it to the doctor who is willing to provide a "life expectancy".
• Find out how long it will take the doctor to complete the form, set alerts on your computer or make a note in your calendar. Follow up if you haven't received the form by the noted date.
• Review the completed form, including the doctor's statements, to be sure everything is completed as desired. When you look at the "life expectancy" keep in mind it's about statistics, not what will happen to any individual. Also keep in mind that the doctor is trying to help you. Indicating a life expectancy as short as he or she can will help you obtain this benefit.
• Make a copy of the form for your files.
• Submit the form with a cover letter that references your policy number and states that you are requesting a Living Benefit under the policy. Mention the amount of money you want to receive as an advance. If you want a check, tell the company to whom it should be payable. If you prefer a wire transfer directly to your bank account, give the insurance company the routing information as well as the name on the account (You'll find the bank's routing number on your checks -- or call and ask the bank.) Ask that your request be attended to as soon as possible. Tell the company to call you if there are any questions. Be sure to provide a phone number at which you can be reached during business hours. Send the letter via certified mail or similar means which will permit you to trace it and to prove that it was received.
• Follow-up with the insurance company periodically to find out the status of your application. We recommend that you follow up a day or so after you send your information to confirm its receipt -- even if you already know it was received because you track it through the carrier. At this time, ask how long it will take to process. You should then set alerts on your computer or note dates in your calendar to call at least once a week to find out the status of your application.
• Before you receive payment, think through what is the best place to park the money until you are ready to use it.

• Call the insurance company and ask for an application to obtain the proceeds for a living benefit. Don't be surprised if the insurance company tells you that you have to obtain the application from your employer. If this is the case, ask your employer for the application. If you haven't previously disclosed your condition, read Disclosing your Condition To Your Employer. Keep in mind that you do not have to tell your employer more about your condition at this point than you want to. You may not be protected against discrimination because of your condition unless you formally make a disclosure for that purpose to your employer -- see Americans With Disabilities Act.
• If there is a part that has to be completed by your employer, give the form to your employer first to complete that section. Ask that the completed form be returned to you. Find out how long it will take to complete the form and set alerts in your computer or note dates on your calendar to follow up.
• When you have the form back, check the employer's statements for accuracy. Then complete your section.
• Make a copy of the form "just in case" and send or take it to the doctor who is willing to provide a "life expectancy".
• Find out how long it will take the doctor to complete the form, set follow up alerts as above. Follow up on the due date if you haven't received the form by then.
• Review the completed form, including the doctor's statements, to be sure everything is completed as desired. When you look at the "life expectancy" keep in mind what we said above about statistics. Also keep in mind that the doctor is trying to help you and is indicating a life expectancy as short as he or she can specifically for the purpose of helping you obtain this benefit.
• Make a copy of the form for your files. You can submit it as is without a cover letter. However, it is preferable to send the form to the insurance company with a letter that references your policy number and states that you are requesting a Living Benefit under the policy. Mention the amount of money you want to receive as an advance. If you want a check, tell the company to whom it should be payable. If you prefer a wire transfer directly to your bank account, give the insurance company the routing information as well as the name on the account. Ask that your request be attended to as soon as possible. Tell the company to call you if there are any questions. Be sure to provide a phone number at which you can be reached during business hours. Send the letter via certified mail or similar means which will permit you to trace it and to prove that it was received.
• Follow-up with the insurance company periodically to find out the status of your application. We recommend that you follow up a day or so after you send your information to confirm its receipt -- even if you already know it was received because you track it through the carrier. At this time, ask how long it will take to process. You should then set alerts on your computer or note dates in your calendar to call at least once a week to find out the status of your application.
• Before you receive payment, think through what is the best place to park the money until you are ready to use it.

With FEGLI, if you have both basic and additional insurance: you can only accelerate the basic coverage, not any of the additional coverages.

Once a FEGLI policy is accelerated, the remainder cannot be assigned. However, if you convert the entire amount of insurance, then accelerate, you may be able to accelerate a percentage of ALL the insurance – and probably even be able to sell the remainder.

Contact the service representative for information about how to access a living benefit under your life insurance policy and follow the directions.

The letter you receive from the life insurance company should include:

• The amount of the living benefit.
• How it was paid.
• The status of the difference between the amount you receive and the death benefit.

If all of these points are not covered in the insurance company's letter, ask that the missing information be sent to you in writing.