There is a new generation of life insurance out in the marketplace that is beginning to revolutionize the benefits to life insurance owners. It goes far beyond just the basic living benefits. Truly, when the industry began adding accelerated benefits as a way to combat the life settlements that were threatening their actuarial calculations, it was a revolutionary step. But today’s “Life Benefit Plans” are so much more. Now when your client asks, “What’s in it for me?” you can show them how they can be the beneficiary of their own life insurance policy!
- Accelerated Life Insurance Benefits – Now built into many permanent life benefit plans – is some type of accelerated or terminal illness rider, at no additional cost. The riders state that if you are terminally ill and are expected to pass, typically within 12 months, you can access a portion of your benefit amount. The amount varies by carrier, but it usually has a maximum of 75% of the benefit amount.
- Chronic/Cognitive Illness Rider – Most chronic illness riders allow access, on a monthly basis, to the life benefit amount if the insured cannot perform two out of the six activities of daily living and is deemed to be chronically or cognitively impaired. This is a fixed monthly amount paid to the insured. value of a domain name . Who determines this will be in another blog post soon! The monthly amount they receive is determined when the policy is issued and the benefit begins usually 90 days from the date of certification that the insured is chronically ill.
- Long Term Care Rider – This rider is also triggered by the insured not being able to perform two out of the 6 activities of daily living which is expected to last at least 90 days, or having a severe cognitive impairment. These are reimbursement plans for specific covered expenses.
- Lifestyle Income Rider – This is a NEW type of rider that can provide a supplemental retirement income for insureds that live longer than expected and are not prepared for it. They can receive their death benefit as an income stream at age 85 over a 10 year time period, essentially being the beneficiary of their own life insurance policy.
This new generation of life insurance products is amazing. Now our charge is to help our clients understand what is available to them in a protection plan. Now they can protect their loved ones if they die too soon, and they can protect themselves if they live longer than expected or get sick along the way. All with one benefit plan. It is a great time to be in the life insurance business!!