• Living Benefit Riders

  • FINANCIAL MISTAKE: Ignoring life insurance policies as a solution for long term care planning.

    Living Benefit Riders on Life Insurance Policies

    Living Benefit Riders (or endorsements) on life insurance policies allow for the insured to access part of the death benefit during their lifetime if certain events occur. These riders are often built into a policy with no extra cost*. Common Living Benefit Riders include:

    1. Terminal Illness Riders- These riders allow a terminally ill person to access a portion of their death
        benefit while they are still living. This important benefit provides extra cash for things like medications
        or special treatments not covered by a person's health insurance.
     
    2. Critical Illness Riders- These riders allow a critically ill person to access a portion of their death benefit
        should they suffer from certain illnesses. Critical illnesses covered vary per contract, but common critical
        illnesses might include heart attack, cancer, stroke, major organ transplants, or kidney failure. These
        riders provide access to needed cash to replace lost income, cover health deductibles, or pay for medicine costs.
     
    3. Long Term Care Riders- These riders allow an insured needing long term care for a permanent situation
        or a temporary situation (as little as 90 days) to access part of their death benefit. Benefits are triggered
        by severe cognitive impairment or the inability to perform activities of daily living activities for at least 90 days.
        Cash can usually be accessed to pay for home care, nursing homes, or assisted living facilities. Some policies
        even allow for benefits to continue even after death benefit proceeds are exhausted (see Life Insurance as a
     
    4. Chronic Illness Riders- These riders are similar to a long term care rider. Usually these riders are worded so
        that an insured needing long term care assistance can access death benefit proceeds for a permanent situation
        only. Benefits are usually triggered by severe cognitive impairment or the inability to perform permanently
        perform activities of daily living. Cash can usually be accessed to pay for home care, nursing homes, or
        assisted living facilities. These benefits are often at no additional cost on very competitive policies. Although
        they are not "long term care" riders, they can provide some sort of long term care back up plan as an
        additional benefit. 
     
     Could a life insurance policy be your long term care back up plan? 

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    *Policy benefits and conditions vary per particular contract.

    See our Professional Disclaimer