Q. Does a Term life insurance have living benefits?
A. It depends on the insurance carrier you choose.
Many Term insurance providers offer accelerated death benefit rider, some even offer it free.
What is Accelerated Death Benefit Rider
The rider acts as an advance on a portion of the policy’s existing cash value. It allows the policyholder to receive a portion of the death benefit while the insured is still alive, should the insured be diagnosed with a terminal illness.
What is the Eligibility
This rider offers a one-time election if a verified physician’s statement indicates the insured has a terminal illness which will result in death within 12 months.
How Does Accelerated Death Benefit Work
The rider is available at no premium charge on the issue date of the base policy. There is a fee only at the time of exercise. The rider accelerates up to 50 percent of the base death benefit, including any paid-up additional insurance purchased with dividends, up to $250,000. Premiums and gross cash values will not change as a result of the rider’s acceleration. The death benefit is reduced by the amount accelerated plus accumulated interest.
Some Examples
Banner Life Opt-Term
Maximum acceleration of death benefit is the lesser of $500,000 or 75% of the policy’s primary death benefit less any loans. This reduces the death benefit plus any accumulated interest.
Protective Custom Choice UL
Accelerates 60% of the policy’s death benefit or $1 million, whichever is less. This also reduces the death benefit plus any accumulated interest.
SBLI Term Product
Accelerates up to 50% of the base death benefit, up to $250,000. This also reduces the death benefit plus any accumulated interest.
Prudential has a good no cost option as well.
Living Needs Benefit. No cost to the client. It covers that same terminal illness as above, but also covers confinement to a nursing home for at least 6 months and expects to be permanently confined.
A. It depends on the insurance carrier you choose.
Many Term insurance providers offer accelerated death benefit rider, some even offer it free.
What is Accelerated Death Benefit Rider
The rider acts as an advance on a portion of the policy’s existing cash value. It allows the policyholder to receive a portion of the death benefit while the insured is still alive, should the insured be diagnosed with a terminal illness.
What is the Eligibility
This rider offers a one-time election if a verified physician’s statement indicates the insured has a terminal illness which will result in death within 12 months.
How Does Accelerated Death Benefit Work
The rider is available at no premium charge on the issue date of the base policy. There is a fee only at the time of exercise. The rider accelerates up to 50 percent of the base death benefit, including any paid-up additional insurance purchased with dividends, up to $250,000. Premiums and gross cash values will not change as a result of the rider’s acceleration. The death benefit is reduced by the amount accelerated plus accumulated interest.
Some Examples
Banner Life Opt-Term
Maximum acceleration of death benefit is the lesser of $500,000 or 75% of the policy’s primary death benefit less any loans. This reduces the death benefit plus any accumulated interest.
Protective Custom Choice UL
Accelerates 60% of the policy’s death benefit or $1 million, whichever is less. This also reduces the death benefit plus any accumulated interest.
SBLI Term Product
Accelerates up to 50% of the base death benefit, up to $250,000. This also reduces the death benefit plus any accumulated interest.
Prudential has a good no cost option as well.
Living Needs Benefit. No cost to the client. It covers that same terminal illness as above, but also covers confinement to a nursing home for at least 6 months and expects to be permanently confined.
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