Life Poli­cies Now Cover Chronic Care, Too!

Pro­tect Your­self and Your Fam­ily

RSWLiving - - Departments - BY MAR­SHA MCDON­ALD

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.

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