This is my first blog on Living Benefits or it is in other words coverage for quality living. This is the coverage that if in force at a time of a major health event that may save you from hardship and ultimately death.
Ok, I know this has been awhile since I have been to this Blog. The thing is I have been working on the bases of what I really want to have out there for people that are interested.
So this is one segment I will spend some time at because it is one of the most important pieces: Living Benefits
I will use the term “living benefits” over and over because I personally believe it should be used as common as say Term life Insurance or Disability Insurance or Critical Illness Insurance or Chronic Illness Insurance or Terminal Illness Insurance or even LTC.
Why do you ask am I using all these terms? The reason is today there are policies out there that have a portion of all this coverage and are packaged in one policy! How are they doing it? What do they call this combination of coverage? You probably guessed it “Living Benefits”.
Now lets look one example of how one carrier does all this coverage and make it affordable.
The first portion is definitions:
Term Insurance— This is the amount of time the whole coverage is enforce for a specified time. The options are 10. 15. 20. 30. 40. years this gives a great range of coverage dependent on the need and the age of the client.
Life Insurance- This is one of the first and most important coverage of this whole package. This is the main engine that is driving the protection in this policy. It is actually should be called death insurance because you need to die to collect it. However, it protects your family against you leaving behind a mess of funeral bills, Medical bills, mortgage payments, unpaid cars, education for the kids and other untimely things. This also is the face amount if you live and need help for major health reasons you will be able to draw off of if needed.
Terminal Insurance- This living benefit rider is automatically included in the policy. This rider today is included in most all life insurance policies and should be one that is in your policy now if you have one. This an Accelerated Death Benefit and is determined by a condition resulting from injury or illness which ‘as determined by a physician. has reduced your life expectancy to not more than 12 months from the date of the physician’s statement. This provision allows you to accelerate up to 100% (Max $500,000) of the policy’s death benefit.
Chronic Illness- This living benefit rider is automatically included in the policy, and allows you to accelerate your death benefit if you are chronically ill. Chronically ill is being unable to preform two of the six activities of daily living( bathing, continence, dressing, eating, toileting, and transferring) without assistance from another person, or being severely cognitively impaired for at least 90 consecutive days. You could use the money to help pay off your mortgage, for home health care, long term care, or any other medical or non-medical expense you may have.
After a 90 day waiting period, you can accelerate up to 2% a month of the initial face amount. The maximum lifetime benefit is 90% of the initial face amount or $500,000 whichever is less. The policy must be in force for two years of payments before you can collect whatever benefits are payable but they will go back to the 90 day wait period if needed at that time. There is no additional charge for this living benefit.
Critical Illness-This living benefit rider is automatically included in the policy, and allows you to accelerate your death benefit if you are critically ill. A critical illness is one of the following qualifying events: heart attack, stroke, ALS (Lou Gehrig’s disease), diagnosis of certain cancers, kidney failure, and major organ transplant. Like the chronic illness rider, you could use this money for any type of expense, whether it is a medical one that possibly saves your life or a non-medical expense that possibly saves your home.
After a 30 day waiting period, you can accelerate 90% of the initial face amount or $500,000, whichever is less. There is no additional charge for this living benefit.
Packaged- This is the term used to describe all of these living benefits and life insurance in one policy. The reason is simple this package concept helps protect all the needs of major health disaster in one and can be drawn off on dependent on how severe/life threatening your condition, the shorter your life expectancy because of the occurence the more benefit you will be able to receive. Dependent on when you need the payments you can take them as soon as you qualify or wait for the true time of need. It your choice. This is called true security in one package.
This is my conclusion of one carriers concept of “Living Benefits”. This in no means conclusive and leaves much of the details out. There is no repensentation of any contract or insurance company, agency or broker. This is a mear concept of how one company has represented a concept on how to insure. Please always refer to contract langage and a legal representative if you need a canceller or clarification of coverage.
Please feel free to comment on how you see you could use this policy to help secure you and life events. By the way this policy is garanteed level premuim through out the period of the contract you purchase and does not increase due to age, health condition or being uninsurable once in force and the premuims are being paid.
Does this sound differant then what you need to expect with health insurance and health reform and medicare/medicaid?
How about your employers benefit policy?
