In the old days…(about 10 years ago!!!), life insurance policies offered you DEATH BENEFIT PROTECTION and if you needed cash, you could borrow from the cash values if any. Life Insurance policies protected you in DEATH but offered little help if you were still alive. That shortfall was remedied with the development of life insurance policies that contained LONG TERM CARE Riders, Accelerated Death Benefit Riders, Critical Illness Riders, and TERMINAL Illness Riders. These benefit options are HUGE considering that statistically, you are 7X more likely to become disabled to some degree or to need home health care or nursing home care later in life than your chances of dying. While the terminology can be a little confusing, collectively, we can refer to them as LIVING BENEFITS or Accelerated Death Benefit options. In a nutshell, these benefits offer clients access to part of their death benefit proceeds prior to death.
Some Assembly Required: Living Benefits for Your Life
These are NOT Cookie-Cutter options so analysis of the actual benefit structure, i.e. how you qualify, how the payouts to you occur….are all critically important factors on exactly which kind of LIVING BENEFIT Rider is the best compliment to your permanent life insurance policy. There are some significant benefits to a true LONG TERM CARE RIDER versus some of these other accelerated death benefit options. Some of these riders have NO CHARGE upfront. Some policy options carry extra premium charges upfront on top of the base life insurance premium. There is no right or wrong structure, but there are so many options that an experienced life insurance agent will surely be able to find one that fits your specific needs, perfectly.
Triggering events for accessing your Living Benefit options include:
TERMINAL ILLNESS: Your physician gives you the worst of the worst news and the outlook is grim. How do you deal with your inability to work and provide for your family? How will you provide for your own daily living expenses which will likely include some caregiver in the home? Being able to access some of your death benefit proceeds in advance of death can offer substantial cash and significant stress relief.
CHRONIC ILLNESS: This is a disease state that will not go away. Nearly half of all Americans will suffer a Chronic Illness scenario before they die that requires home health care or nursing home care. I think we can all agree on that likelihood but how exactly are we going to pay for our health care needs?
CRITICAL ILLNESS: This is the Acute (NOW) or temporary health situation that you can recover from. Things like a heart attack, stroke, or cancer. Health issues that knock you down without taking you out or leaving you permanently incapable.
Life Insurance Riders for When you Actually Need Them
Accelerated Death Benefit options and Long Term Care Riders can give you the financial safety net you need to live comfortably while disabled with a critical, chronic, or even terminal illness. Please feel free to contact The Family Tree of Life team to discuss your unique needs.