What is a "living benefit" in the context of life insurance?

A "living benefit" in the context of life insurance refers to the feature that allows policyholders to access a portion of the death benefit while they are still alive, particularly in situations involving terminal illness or critical health conditions. This provision is designed to provide financial assistance to the insured when they are faced with high medical expenses or need assistance in managing their healthcare needs before passing away.

This concept is significant because it reflects the understanding that life insurance is not only valuable after death but can also offer support during the policyholder's life, especially during difficult health crises. It effectively provides liquidity and enables families to manage financial burdens that arise due to medical conditions, potentially covering costs like hospital bills or long-term care.

The other options, such as borrowing against the policy or receiving cash value while alive, do relate to features of life insurance, but they do not specifically embody the unique aspect of "living benefits." Similarly, a discount on future premiums does not align with the idea of providing a benefit to the insured during their lifetime, further highlighting why the specific concept of accessing death benefits early for medical reasons is the most accurate definition of a "living benefit."