Very few companies specialize in this product. Along with a death benefit, this product covers you for critical, chronic, and terminal illness during the duration of this policy. The best thing about this product is the price. For the price of a simple term policy, you can purchase a living benefits policy. The challenge is that very few companies sell this product and it varies from state to state. Contact us to find out if this product is available in your state.
Sanjay and Kamla both buy a $1,000,000 each 35 year Living Benefits Term life insurance policy.
A few years later, Sanjay has a heart attack, which is a covered illness under the Critical Illness Accelerated Death Benefit Rider.
Sanjay’s doctor recommends that he take a significant amount of time off work. Income is in jeopardy due to the illness. Sanjay files a claim to accelerate $250,000 of his $1,000,000 Living benefits Term life insurance coverage. This means that he will receive a portion of his life insurance benefit now, before his death, which will reduce his original life insurance coverage and policy value.
Based on Sanjay’s personal situation and his choice to accelerate a portion of his death benefit, the company pays Sanjay $120,000 as an accelerated benefit, which he accepts.
Sanjay can receive this lump sum payment today because his life expectancy, based on the company’s evaluation, has been significantly impacted.
After paying the accelerated benefits, the remainder of Sanjay’s Living Benefits Term life insurance policy remains in force.