“ABR Living Benefits Are Not Free” – What Most Insurance Agents Don’t Tell You
- LIR TEAM
- Jun 14
- 5 min read
Accelerated Benefit Riders (ABRs), also commonly referred to as "Living Benefits," have become a popular selling point in both term life and cash value life insurance policies. These riders allow policyholders to access a portion of their death benefit early if diagnosed with a critical, chronic, or terminal illness.
Yes, ABRs can provide important protection during some of life’s most difficult moments—but there's a growing myth being pushed by many insurance agents and brokers: that these benefits are free. Let’s set the record straight.
The Truth: ABRs Are Not Free
Despite the frequent claim that ABRs are “included at no cost,” there are real internal costs and trade-offs that most consumers are never told about. While there may not be a separately billed premium for the ABR, the cost is built into the overall structure of the policy. These costs impact both the efficiency and long-term performance of your policy, especially if you own a cash value policy like Indexed Universal Life (IUL).
At LifeInsuranceReview.com (LIR), we’ve analyzed hundreds of policies, and the truth is clear: ABRs are not free—and pretending they are can mislead well-intentioned consumers into accepting underperforming policies.
How ABRs Impact Different Types of Life Insurance
1. Term Life Insurance
In term policies, it’s easy to compare apples to apples. If you compare two term policies—one with ABR and one without—you’ll often find the policy with ABR costs more.
So while agents might say “this comes with living benefits at no cost,” the higher premium tells a different story. You're paying for the feature—just not in a separate line item.
2. Cash Value Life Insurance (Especially IULs)
This is where it gets even more misleading. Many agents promote ABRs on IULs as a free add-on that enhances the policy.
But in reality:
ABRs increase the internal costs of the policy.
As you age—especially after age 60—these costs compound and can drag down both cash value growth and death benefit performance.
ABR claims often reduce your death benefit (similar to a policy loan), but without the strategic flexibility that a well-managed loan can offer.
At LifeInsuranceReview.com, we’ve reviewed many IUL policies where ABRs were added under the premise that they “make the policy better,” when in fact, they made the policy less efficient for building long-term value.
Why This Matters for Cash Value Accumulation
Many clients are drawn to IULs for their cash value growth potential and tax-advantaged retirement income strategies. When ABRs are added—without a clear understanding of the internal costs—they dilute the performance of the policy over time.
In our reviews, we often find that:
Policy loans, when managed properly, provide more control and better financial outcomes in retirement years than triggering an ABR.
The Internal Rate of Return (IRR) on both the death benefit and the cash value is often reduced when unnecessary riders are layered into the policy.
LIR: The Trusted Consumer Advocate in Life Insurance Reviews
Unlike most agents or brokers who sell life insurance, LifeInsuranceReview.com (LIR) is not here to sell you a product—we’re here to help you understand the one you already have or are considering.
Our mission is clear:
We act as independent, fiduciary-level advocates for consumers.
We give you unbiased, expert analysis so you can make informed decisions.
We’ll help you uncover internal costs, efficiency issues, and whether riders like ABRs are actually helping—or hurting—your policy’s performance.
Remember, 8 out of 10 policies we review show room for significant improvement—and much of that stems from misunderstandings or overselling of features like ABRs.
The Bottom Line
Yes, living benefits are valuable—especially for those who may not have other financial resources to rely on in the event of a health crisis. But calling them “free” is misleading and can result in costly consequences down the road.
Before you accept that “ABRs are included at no cost,” ask:
How does this affect the policy’s long-term value?
Does this make sense for my financial goals?
Are there better ways to protect against chronic or critical illness without compromising policy efficiency?
At LifeInsuranceReview.com, we’ll help you find the answers—and we’ll do it without selling you anything.
✅ Get a Free, Unbiased Policy Review Today
Whether you have a term policy, IUL, or whole life contract, our team will dig into the fine print and show you what’s really under the hood. If living benefits are part of your policy, we’ll show you how they affect your cash value and death benefit now—and in the future.
Let us help you make your life insurance work smarter for you. Visit LifeInsuranceReview.com to get started.
FAQs: ABR Living Benefits Are Not Free
1. Are ABR Living Benefits truly free?
No. While they are often marketed as “included at no cost,” ABRs typically come with internal policy costs that are not clearly disclosed. These costs are built into the structure of the policy and can reduce both the cash value accumulation and death benefit performance—especially in cash value life insurance like IULs.
2. How do ABRs affect my Indexed Universal Life (IUL) policy?
ABRs can increase the internal expenses of your IUL policy, especially as you age. Over time, this can significantly lower your cash value growth and reduce your policy’s overall Internal Rate of Return (IRR). While ABRs may provide early access to the death benefit during illness, they often do so at the expense of long-term financial efficiency.
3. Can I choose to not include ABRs in my policy?
In many cases, yes. Depending on the insurance carrier, you may be able to select a version of the policy without ABRs, which can lower your premium or increase your policy’s efficiency. It’s important to work with an independent expert like LifeInsuranceReview.com to compare policy designs with and without ABRs to see what best fits your goals.
4. Is it better to use a policy loan or activate an ABR during illness?
That depends on your situation—but in many of our reviews, we find that policy loans (when available and properly managed) often provide greater flexibility and allow your cash value to continue growing more efficiently. ABRs, in contrast, permanently reduce your death benefit and can restrict your future options.
5. How can I find out how much ABRs are really costing me?
Most of these costs are not visible on the surface. That’s why LifeInsuranceReview.com offers detailed, transparent policy reviews. We help you uncover the hidden costs of riders, understand your options, and determine if the policy is aligned with your goals—or if there are better alternatives available.
ABR Living Benefits Are Not Free
