Generally, when people purchase life insurance policies, they do so with the intent of providing a beneficiary, or group of beneficiaries, with the means for a proper burial. They also purchase coverage with the intent to provide a financial gift for the loved ones, charities, or organizations they'll be leaving behind after they pass away. The funds that are paid to an intended beneficiary from a life insurance policy are called Death Benefits, because the beneficiary only receives the money after the insured dies. But there are additional benefits life insurance policies offer that many people don't talk about or know about. These benefits are called Living Benefits.
Living Benefits are riders attached to a life insurance policy that allow the insured to access a portion of his or her death benefit while still alive. These benefits are important as they enable the insured to access funds in the result of a qualifying event such as a critical, chronic, or terminal illness. Examples of such events include, but are not limited to, heart attacks, strokes, cancer, inability to perform at least two activities of daily living because of a disability, and death within 12 to 24 months. In addition to new Alzheimer's, Cardiovascular Disease, Depressive Disorders, and Diabetes cases and deaths increasing in the coming years, here's what the American Cancer Society had to say about cancer projections for 2019 alone:
"In 2019, there will be an estimated 1,762,450 new cancer cases diagnosed and 606,880 cancer deaths in the United States." - cancer.org, 2019
This means that many Americans will suffer at least one critical, chronic, or terminal illness in the coming years. How do Living Benefits provide a solution in such a life event? We know that health insurance does not cover all costs associated with major sicknesses, namely loss of income. And it is almost a guarantee that a person who contracts a major illness will have to at times miss work, pay out of pocket deductibles and other extra costs that their health insurance plan does not cover, as well as pay for additional treatments not covered under their primary health plan. Not knowing how you would pay for these added expenses and still provide a steady income to maintain a household for your loved ones will do nothing but add more stress to an already stressful situation. Living benefits give you the peace of mind you'll need if such a situation ever occurred. It's as simple as filing a claim with your carrier.
Once you file a claim with your life insurance carrier, and provide all of the necessary paperwork and proof needed to validate you claim, and it is approved by your life insurance carrier, depending on the actual product and carrier terms and conditions, you will have access to up to 95% of your policy's death benefit during this stressful time. That means that your carrier will give you up to 95% of the money from your policy to cover your added expenses, something you would not have been able to do had you not had the proper life insurance coverage in place (restrictions do apply and removal of any money from the policy's death benefit will lower the policy's death benefit).
According to the Henry J. Kaiser Family Foundation, a popular organization that provides information for national health issues:
"Among those who report problems paying medical bills, two-thirds (66 percent) say the bills were the result of a one-time or short-term medical expense such as a hospital stay or an accident, while 33 percent cite bills for treatment of chronic conditions that have built up over time." - kff.org, 2019
The best way to guard against such troubling situations, is to be prepared. We all hope to not be in the number of those that suffer major illnesses, but even with a healthy lifestyle, our number can be called. So rather than have to react to such an event, act now and have a safeguard in place. Also available for seniors in Assisted Living.
Life is full of the unexpected. If you were to suffer a qualifying critical, chronic, or terminal illness, you may receive up to 95% of your policy's death benefit, depending on the carrier and product. This is called an "Accelerated Benefit", also called, "Living Benefits". This is a one time payout that will reduce your policy's death benefit by the amount of money you receive.
Portions of the life insurance premiums you pay on your policy are saved in a separate account, and over time, grow tax deferred at a fixed interest rate. This is called "Cash Value". When your policy reaches a certain amount of cash value, you can borrow it. Certain rules and restrictions apply and vary by carrier.
If you were to surrender your policy early, you could receive the cash value that the policy has accumulated along with any premiums you may have paid, depending on the type of contract and riders selected. As with all life insurance policies, this living benefits rider has certain rules, restrictions, and fees may apply.
Chin and Chun are an elderly couple in their early 70's. They live a fairly healthy lifestyle and haven't had any major illness up to this point. One day Chin gets really ill and is admitted into a local hospital. After getting tested for certain ailments, Chin finds out he has prostate cancer. Chin does an assessment of costs with his doctors and finds out that his health insurance will only cover his treatments up to a certain amount. He also finds out there are better, more specialized treatments available that will help him live longer, but he does not have the money for them.
Problem: Already on a fixed income, Chin and Chun know they cannot afford the out of pocket costs associated with Chin's new sickness. They know that any major spending of their current income can lead to serious financial burdens, and even worse, the foreclosing of their home.
Solution: Chin and Chun remember they have Living Benefit riders attached to their life insurance policy and get in touch with their agent. Since cancer is considered a chronic illness, his agent helps him file a claim with his insurance carrier and Chin was able to access over 75% of his policy's death benefit, allowing him to get the special treatments he needs as well as pay any additional expenses that may arise as a result of his new illness. Having these living benefits attached to his life insurance policy proved to be the difference between Chin getting average treatment, and specialized treatment. It also proved to be a difference maker in whether or not the couple would be able to continue paying their everyday expenses and securing their home.
Having the right life insurance in place can make a huge difference in the lives of the people you leave behind. But what if the life insurance you have can make a difference in your life as well? That's the power of Living Benefits Insurance. Through Living Benefits you can experience the power of your life insurance policy while you're still alive. Sicknesses doesn't discriminate and doesn't care if you're married with children, or single with no dependents. But money does discriminate on things such as the type of care you can receive as well as how expenses will be paid in the event of an illness or debilitating injury. Get insured today and protect yourself and your loved ones from the financial burden that major illnesses or injuries can cause.
Subscribe to stay up to date with new insurance offerings, policy and carrier changes, as well as our latest news and events.
Copyright © 2018 Empyral Insurance Group, LLC - All Rights Reserved.