Life insurance is traditionally a straightforward concept, you purchase an individual plan if your health qualifies or you get it as a part of a group through your benefits at work. If you die your beneficiary or beneficiaries get paid money in the form of a death benefit.  All insurance is meant to cover a loss, life insurance covers the ultimate loss which is death.  I guess you could refer to life insurance as death insurance in that it covers the opposite of what it sounds like, it covers your life but it pays when you die.  Some people look at the concept of life insurance as a morbid idea, but it is a necessary thing if you care about your loved ones or need it for business purposes.  As competition drives innovation down through time a new question has arisen in the past 8 years or so: “What if you could purchase life insurance that pays while you’re still alive if you need it?”  In the competitive realm of the insurance industry comes the newest type of life insurance on the block, life insurance with free Accelerated Living Benefits riders.  The purpose of this article is to explain what Accelerated Living Benefits are and how significant they can be in your overall estate planning.

We are all going to have an old person walk out of our body or we are going to drop dead, that’s what my pops used to say for many years before he passed away.  In other words, we will either die fast or we will die slow, but we all will die someday.  The insurance industry is highly competitive, go to www.millenniuminsurancegroup.comand enter your birthday on our free term quoting engine for any amount of insurance and you’ll see for yourself how close rates are from one carrier to the next.  Sometimes rates are different by literally less than a dollar from company to company.  As a consumer who has no knowledge of the industry how are you supposed to know why company A is better or worse than company B?  Many things go into why one company with similar rates maybe a better fit for your insurance needs, but for the purpose of this article its all about the Accelerated Living Benefits.  Not every company has these riders and even fewer companies have them on their term insurance product lines.  What are Accelerated Benefits and why are they so important?

Accelerated Living Benefits cover an insured individual in instances of a Critical, Chronic or a Terminal Illness.

  • A Critical Illnessis something that could happen to any one of us in our lifetimes which affects your life expectancy.Examples of this are:  heart attack, stroke, cancer, arterial aneurism, loss of limb, AIDS, organ failure to name a few.  Depending on the severity of these conditions you may be eligible to use your life insurance tax-free by settling out your life insurance contract prior to death.  Amazingly powerful stuff and our flagship carrier for these products allows one to accelerate up to $2 million of your death benefit for such instances.
  • A Chronic Illnessis more indicative of a long-term care feature in your life insurance. Very important feature in permanent life insurance concepts, but should be included in your term plan as well when available.  These riders accelerate portions of your death benefit to you tax-free when you can no longer perform 2 of the 6 Activities of Daily Living for a period of at least 90 days.  ADL’s are: Toileting, Transferring, Bathing, Eating, Dressing and Continence.  Chronic Illness riders are designed to be triggered like a traditional LTC plan, however because a Chronic Illness rider is an advancement of your life insurance proceeds the money is paid directly to the insured tax-free as an indemnity concept, whereas traditional LTC plans are re-imbursement concepts and money is never paid to the insured.  With a Chronic Illness rider, insureds can do whatever they wish with their tax-free money. A traditional LTC plan goes directly to reimburse medical costs and money is paid directly to doctors and hospitals for that purpose.  This is a major difference we look at with our clients in determining whether LTC or Life Insurance with Chronic Illness riders are a better fit for their individual needs.
  • A Terminal Illnessis something that has been widely available in many insurance products for several decades now.These riders advance death benefit proceeds prior to death when an insured is told by a medical professional that he or she has 2 or years left to live.  Some carriers automatically advance 50% of one’s death benefit, other carriers will get you closer to the full amount of coverage in-force.  Terminal Illness riders should be on any life insurance policy, but their availability varies by state and company, please contact us and one of our professionals will point you in the right direction depending on your situation.

In short, Accelerated Living Benefits change the way people should look at life insurance.  Having the ability to use your life insurance while you’re alive in horrible & unexpected circumstances is a powerful concept which builds brand loyalty.  I’ve personally seen these riders utilized with three different clients and in each instance it was hugely impactful for the families of our clients.  I lost my dad to cancer at 56 and I can only wish that these riders were available at the time.  I can see how it would have allowed for so many different potential outcomes for both me, my sister and my aunt, but also for my father who lost his battle in a little over 10 months to stage 4 Pancreatic Cancer.  I’m a firm believer that many people are paying too much for the life insurance they have in place for their needs and they don’t have these riders as a part of their overall planning when they could and should if they use the right broker.  Millennium Insurance Group is proudly independent and we work for our clients, give us a call at (206)247-5360 or visit us at, we’re here to help.