Among the insurance types that protect our lives—medical insurance, cancer insurance, and life insurance—where is the “Living Needs Rider” positioned, and what role does it play? This rider, often provided for free, possesses great power to alleviate financial anxiety when the insured receives a terminal diagnosis. This article clarifies why the Living Needs Rider is exclusively attached to life insurance (which provides death coverage) and details how it can be utilized as a “free-to-use fund during life”—a fund that medical and cancer insurance cannot fully cover—by explaining the differences between them.
The Relationship Between Insurance Types and the Living Needs Rider
1. Insurance Policies Covered by the Living Needs Rider
| Insurance Type | Living Needs Rider Availability | Relevance |
| Life Insurance (Death Coverage) | Attached (often automatic) | It is a rider funded by the main contract’s death benefit. It cannot exist without life insurance coverage. |
| Medical Insurance | Not Attached | Since it does not provide death coverage, the Living Needs Rider cannot be attached in principle. |
| Cancer Insurance | Not Attached | Since it specializes in coverage for specific illnesses (cancer) treatment, the Living Needs Rider cannot be attached in principle. |
The Living Needs Rider is a special clause that “prepays the ‘death benefit’—which is originally paid upon the insured’s death—while the insured is alive.” Therefore, it is only attached to life insurance policies (such as whole life insurance and term life insurance) where death coverage is the main contract.
2. Differences in the Role and Coverage of Each Insurance
| Insurance Type | Main Role | Payment Triggers | Usage of Paid Funds |
| Life Insurance | Preparation for the living expenses and final arrangements for the bereaved family upon death. | Death, Advanced Disability | Living expenses, educational funds, funeral costs for the bereaved family, etc. |
| Medical Insurance | Preparation for the costs of hospitalization and surgery due to illness or injury. | Hospitalization, Surgery, Outpatient visits (via rider) | Treatment costs, differential room charges, temporary living expenses, etc. |
| Cancer Insurance | Specialization in preparation for the costs of cancer treatment. | Cancer diagnosis, Hospitalization/Surgery/Outpatient visits for cancer treatment | Cancer treatment costs, chemotherapy costs, etc. |
| Living Needs Rider | Preparation of funds for the individual and family upon a terminal diagnosis. | Diagnosis by a doctor with a life expectancy of 6 months or less. | Treatment costs, palliative care, final living expenses, travel expenses, etc. (Free Usage) |
3. The Role Fulfilled by the Living Needs Rider
By being attached to life insurance, the Living Needs Rider fulfills the following crucial roles:
- Improvement of Quality of Treatment and Life through Living Benefits: While medical and cancer insurance cover expenses for treatment, the Living Needs Rider provides funds—tax-free—to live out the “remaining time after a terminal diagnosis.”
- Supplementing What Medical and Cancer Insurance Lack:
- Benefits from medical and cancer insurance are often used for treatment purposes, but the Living Needs Rider benefits have no restriction on usage. They can be used for advanced palliative care costs, necessary equipment investment for home care, or expenses for creating memories with family—areas not covered by medical or cancer insurance.
- Even if the terminal diagnosis (including cancer) is due to an illness, receiving a portion of the death benefit in advance—separate from medical or cancer insurance payouts—provides a thicker layer of economic preparation.
In summary, the Living Needs Rider is a mechanism that allows a portion of the life insurance’s function to be used “during life,” providing financial peace of mind for a different purpose than medical or cancer insurance.
