Life Policies Now Cover Chronic Care, Too!
Protect Yourself and Your Family
Did you know that you could actually be the beneficiary of your own life insurance policy? There are a number of universal life policies that are growing in popularity because they allow you to access the death benefit should you need funds to pay for additional care for a chronic or terminal illness. These are often referred to as having an accelerated death benefit or chronic care rider. They can actually allow you to use the death benefit while you’re living if needed to pay for home health care or long-term care in a facility. Here’s how they work: For instance, if you are a woman age 67 and you pay a single premium of $100,000, you would have a death benefit of $261,458. You can also make payments annually as opposed to a lump sum, but that will slightly affect the amount of the benefit.
HOW YOU QUALIFY If your doctor states that you cannot do two of the six activities of daily living by yourself, which include eating, bathing, walking, toileting, grooming and dressing, you can access up to 2024 percent of the death benefit annually. The amount of the benefit you are able to access depends on your age at the time. If diagnosed with a terminal illness, you can receive as much as 75 percent of the death benefit. There’s also typically a 90day waiting period required before accessing funds. And I just
had to ask this question, “What if the doctor’s wrong and you survive your illness?” Well, there’s good news; you keep the money. I would consider that a double miracle!
A GOOD OPTION FOR LONG-TERM CARE This is a great alternative for someone who may not have coverage for long-term care (LTC) or who may not qualify because of health issues. In addition, and in my opinion, it’s a better option than the individual LTC policies because if you don’t need the funds, the death benefit goes to your heirs. And if you use part of the benefit, whatever is remaining goes to your beneficiaries. Although it is life insurance and you have to be in reasonably good health to pass the physical, it is also normally not as restrictive as the LTC policies. ‘TOO GOOD TO BE TRUE’ The first comment I often hear when I explain the accelerated death benefit strategy to clients is it’s “too good to be true.” But this is one of the real deals out there that could actually help protect you as well as your family. So you may want to check it out.
All written content is for information purposes only. It is not intended to provide tax or legal advice or provide the basis for any financial decisions. All information and ideas should be discussed in detail with your individual advisor or qualified professional before making any financial decisions.
Marsha McDonald is a financial advisor with Advantage Retirement Group with offices in Fort Myers and Naples.