Living Benefits of Life Insurance | Chronic Illness Accelerated Benefit Rider
When you are buying life insurance you might be thinking; what’s in it for me?
Life insurance is mainly purchased for the death benefit to:
- Replace income if a spouse passes away
- Pay off debts
- Pay estate taxes
- Fund a buy-sell agreement in the least expensive way
- Equalize the inheritance for children if one child inherits the family farm or family business
But What’s In It For You?
If you buy life insurance, can you benefit too? Or is life insurance just for the beneficiaries?
The answer is yes you can benefit in many ways. Right now we will talk about just one way.
Some insurance companies now have a Chronic Illness Accelerated Benefit Rider. The details may vary from company to company, but generally here is how the Chronic Illness Accelerated Benefit Rider can benefit you.
If at some point your health goes bad and you need permanent help with two or more Activities of Daily Living (ADL), the Chronic Illness Accelerated Benefit Rider gives you the right to take a cash benefit even though you are still living.
The six Activities of Daily Living are bathing, continence, dressing, eating, toileting and transferring.
Here is how it may work for you.
If you cannot perform two ADL’s you may need home health care to stay at home or you may need to be in a nursing home. Either way your budget is haywire.
But if you have life insurance with a Chronic Illness Accelerated Benefit Rider you may be able to take part of the death benefit amount as a cash payment. Use the money as you see fit.
Pay for the nursing home. Pay medical bills. Or pay expenses so your spouse can travel with you for your medical treatment at a specialty treatment center.
The whole idea is you get money exactly when you need it most.
The specific terms of the Chronic Illness Accelerated Benefit Rider may be different for each company.
Some companies let you access your money if you have a severe cognitive impairment as well if you need assistance with two ADL’s.
You could have a 90 day waiting period before you can access your money.
And remember not all insurance companies have this benefit in their portfolio.
Here is the take away from this story.
If you choose the right insurance policy you may be able to access part of the death benefit as a cash payment when your health turns sufficiently bad.
Money when you need it most.
Check with your insurance broker. Ask him what options are available for you.
Then give life insurance another look. Not only will it benefit your family, but you may benefit as well.