There are many reasons to purchase Life insurance. Topping the list is to provide loved ones with financial security in the event of your untimely death. Life insurance can help replace lost income to pay the mortgage—often a family’s biggest financial obligation—and other daily living expenses. It can also be used to help pay for your surviving children’s college tuition or to help heirs pay estate taxes.
Depending on your needs, you may have purchased a Term or Whole Life insurance policy for the death benefit. Term Life guarantees payment of the death benefit during a specified period of time. With Whole Life insurance, you have death-benefit protection for a lifetime with guaranteed premiums, and can accrue cash value over time. You can withdraw the cash value before death if you need it.
In addition to the death benefit that Life insurance provides, it’s also important to look at the living benefits that today’s policies offer which can help meet a variety of planning needs.
Living Benefits Riders
Most Life insurance policies now offer living benefits riders that enable you to accelerate the death benefit under certain circumstances during your lifetime:
- Terminal Illness Rider: You can accelerate payment (up to a certain percentage or dollar amount) of the death benefit from your Life policy following a terminal illness diagnosis. Each insurer’s policy provides a definition of what constitutes a terminal illness and the amount of the death benefit that you can access. You can use the funds to pay for doctor’s visits and medical bills, to spend time with the family, pay off debts, etc.
- Long-Term Care or Chronic Illness Rider: If you have a qualifying chronic illness or condition, this rider enables you to tap into your death benefit — up to a certain amount. The funds are used to pay for assistance with activities of daily living (ADL) that you can’t perform on your own. These activities include bathing, dressing, feeding, toileting, transferring, etc. as well as severe cognitive impairments.
While providing financial security for loved ones in the event of your death is the principal reason you purchased Life insurance, today’s policies offer additional living benefits that can be valuable should you need them. Now is a good time to review your coverage and explore your options.
Owens Group is available to review your Life insurance needs. Please contact Bob Owens at 201-408-3500, or Denise Kligman at 201-408-3501.