If you already have an insurance policy, here’s what that "total living benefit" mean.
Total Living Benefit and Guaranteed Cash Value means the same thing, it is the value or the worth of your life insurance policy if you ever decided (for whatever reason) to end your insurance coverage with the life insurance company.
The Total Living Benefit and Guaranteed Cash Value are worth only a fraction of what you have paid for your premiums. Let’s say your Annualized Premium is Php 37,333.75, its total living benefit would only be Php 18,402.00. The computation may differ from company to company but the idea is universal.
Total Living Benefit is a great measure to counter money launderers.
In a scenario where there is no Total Living Benefit, a client that earns money thru illegal gambling like Jueteng could use the proceeds he got from the activity to pay for life insurance coverage. He could hide the dirty money in a life insurance policy for a year or two and then withdraw the money by ending his insurance coverage, by doing so, he had rendered his money clean, no trace of dirt or stench. Total Living Benefit will discourage would-be money launderers from using life insurance as their laundering vehicle. If they use life insurance to launder money, they’d only get ¼ of their total money.
The Total Living Benefit and Guaranteed Cash Value are both good reminders that investing in life insurance is no joke and not to be taken lightly. Once you avail of a life insurance coverage, you should take the premium payment seriously or if not, you’ll be wasting your precious money and time.
Published in: Personal Finance