How to Insure Your Income: Life Insurance Claims

Life insurance claims related to lost income take two forms: disability income riders to life policies and accelerated or living needs benefits.

Disability income riders usually follow the claims processes used by standard disability policies.

The accelerated or living needs benefits are more like life insurance benefits. They're sometimes easier to claim than disability benefits; and they leave relatively little to the discretion of the insurer. If you qualify for accelerated benefits, the company has to give them to you when you file the right claim.

(The same is true for loans on accumulated cash value and other life insurance-related procedures.)

A caveat: This doesn't mean accelerated benefits are a wonderful solution. They usually come at a steep discount from the face value of your policy. If you have a whole life policy with a face value of $100,000, you may only be able to get $70,000 in accelerated benefits -- and as little as $5,000 or $10,000 in a policy loan.