What is a living benefit in life insurance?

A living benefit in life insurance refers to an optional feature that allows policyholders to access a portion of their death benefits while they are still alive under specific circumstances, such as a terminal illness, critical illness, or chronic illness. This feature provides financial assistance during challenging times, enabling individuals to pay for medical expenses, maintain their quality of life, or manage other financial obligations that may arise due to their health condition.

In the context of the other choices, option A is misleading, as it suggests immediate access to the whole death benefit, which is not how living benefits typically function. Option C, covering funeral expenses, refers more to the purposes of certain policies but does not encapsulate the concept of living benefits. Option D mentions a discount on premiums for healthy living, which may relate to wellness programs or preferred rates but is unrelated to the concept of accessing death benefits while alive. Thus, the definition provided in the correct choice accurately reflects the purpose and function of living benefits in life insurance policies.