5 More Reasons to Offer Life Insurance with Living Benefits

Posted by on Oct 24, 2017 in BBA Blog

Why more Americans are not purchasing life benefits with a chronic illness or long-term care rider is beyond me! It should be a no brainer, a slam dunk.  Where else can you create a pool of money so quickly, with the first payment, that will take care of you while you are living or take care of your loved ones when you die?

Here are just a few stats that should make our hair stand up on end:

  • Approximately every 40 seconds, an American will have a heart attack.
  • 92% of older adults have at least one chronic disease; 77% have at least 2.
  • Every 40 seconds someone in the US has a stroke.
  • Every 66 seconds someone develops Alzheimer’s Disease – see resources

The average couple retiring at age 65 can expect to pay $260,000 to cover their health care costs in retirement. This is for their health care costs only!  What about everything else?  It is estimated that 20 years from now the cost for assisted living in the state of Texas will go from $3,500 monthly to $6,321 based on 3% inflation.  Care in a nursing home semi-private room goes from $4,563 monthly to $10,932!  That is staggering!  How can anyone afford to pay for that?  Most Americans have little savings and no long-term care benefits!  (Check out this handy Cost of Care tool.)

Enter life insurance with living benefits or as I like to say, “You have the opportunity to create a pool of money for life and your loved ones by discovering the power of living benefits.

Here are 5 great reasons to offer your clients the added benefit of life insurance with living benefits:

  • Your clients understand they need to have something in place to help them take care of health care costs as they age. They just have not gotten down to doing it or think long-term care insurance is too expensive. Life insurance with living benefits may be a perfect fit. You just need to mention it to them.
  • If your client is already considering life insurance, adding living benefits does not add that much to the cost. Let’s consider a 45-year-old male, preferred, non-nicotine user needing $500,000 of lifetime coverage. He can purchase a Guaranteed UL for $3,994 annually with no living benefit rider or $4,671 with a chronic illness rider, that is only $677.00 for the policy that pays out 2% of the death benefit or $10,000 monthly if he cannot perform 2 of the 6 activities of daily living until the pool of money (the life insurance benefit) runs out or he passes and the balance of the pool of money is paid to the beneficiary. All income tax free!
  • You don’t lose it if you don’t use it. One of the arguments you may have heard about long-term care insurance is “What if I don’t use it?” This policy will pay your client while they are living or if they don’t need the living benefits, it will help support their loved ones when they pass.
  • It is not that difficult to explain or understand. To me, a chronic illness rider in a life insurance policy is straight forward. If your client cannot perform 2 of the 6 activities of daily living and has a chronic diagnosis by a doctor (not all policies require the “chronic” diagnosis anymore) they will receive their monthly benefit amount based on the policy rider. I realize this is pretty basic and each policy has stipulations, but that really is it.
  • You are offering something unique to your client that your competition is not. Although living benefits on life insurance policies is gaining traction, not that many clients are aware of them because not that many agents are offering them. Put it in your quiver of benefits to discuss with your clients every time you visit about life insurance.   The worst that can happen is they say no. The best that can happen is you will have given them a better retirement because they now have a pool of money to handle their additional health care costs.

Life insurance with living benefits may not fit for all clients, but how will you know if you don’t ask?

If you would like to learn more about how life insurance with living benefits works, simply give me a call and I would be happy to discuss it with you.