What benefit does a living benefit provide to policyholders?

A living benefit offers significant support to policyholders by providing an advance payment if they are diagnosed with a terminal illness. This feature is designed to alleviate the financial burden that can arise when faced with serious health issues. It allows individuals to access part of their life insurance benefits while they are still alive, which can be used for medical expenses, personal care, or other costs associated with their illness.

This advance can be especially important during difficult times, ensuring that policyholders have the resources they need to focus on their health and personal affairs without the added stress of financial concerns. By having access to these funds, policyholders can make important decisions about their care and lifestyle in their remaining time.

The other options are associated with life insurance but do not specifically convey the primary function of living benefits. For instance, full payment of the death benefit is only applicable upon the policyholder's passing, while waivers of premium payments and tax exemptions are related to different aspects of life insurance policies. They do not address the immediate financial needs that may arise from a terminal diagnosis, which is where living benefits play a crucial role.