Accelerated Benefits (Living Benefits) on Life Insurance and Annuities

Increasingly carriers are offering these benefits on their life insurance and annuity contracts but not all riders are created equal.  Network Partners Int’l. (NPI) has a deep knowledge of what each carrier offers and can help you find the best solution for your clients.

• Long Term Care and Chronic Illness
• Not the same benefit but are often sold in a similar fashion so it’s important to understand the differences
• Long Term Care {reg.72(t)}
  • Acceleration of death benefit to be used for long term care expenses that pays if the insured is unable to perform 2 of 6 activities of daily living (ADLs) or has a severe cognitive impairment
  • Reduces both the death benefit and cash surrender values
  • Reimbursement or indemnity versions available
  • Pays permanent and temporary claims
  • Amount available for acceleration varies by carrier and the state where issued
• Chronic Illness {reg. 101(a)}
  • Acceleration of death benefit to be used for chronic illness expenses that pays if the insured is unable to perform 2 of 6 ADLs or has a severe cognitive impairment
  • Indemnity version only
  • Additional cost of insurance is charged for some chronic illness riders
  • Riders built-in to the policy with no upfront costs impose back-end charges when rider is exercised
  • Amount available for acceleration varies by carrier and the state where issued
• Critical Illness/Critical Injury
  • Acceleration of the death benefit when an insured suffers a condition covered by the terms of the policy
  • Amount available for acceleration varies by carrier and the state where issued
  • Some carriers require the insured to execute the Critical Illness Rider before the Chronic Illness Rider is the insured qualifies for both
• Terminal Illness
  • Acceleration of the death benefit if the insured is terminally ill with a life expectancy of one to two years
  • Amount available for acceleration is limited to a carrier-stipulated amount
  • Amount available for acceleration varies by carrier and the state where issued

Some carriers offer a form of these riders on their term insurance products.  The premiums on these term plans wouldn’t be the cheapest, but your clients may think paying a few extra dollars a month to have a death benefit they don’t have to die to receive. This is an excellent opportunity for business insurance planning.

We can help you determine the best fit for your client.

Let us help you grow your business.  Call us at now at 800.92.SALES (800.927.2537) or e-mail us at sales@networkpartnersintl.com

Subscribe to our newsletter in the right hand side of this page for updates and network news.