Term Life Insurance With Terminal, Critical & Chronic Illness Benefits at No Additional Cost
Term life insurance is the most commonly sold life insurance product with no close second. The concept is straightforward, you pay the premium, and if you die, the policy pays out its death benefit to your beneficiary. As a result, the term life insurance products are cost-effective and practical for most people in the United States.
When you look at a term policy, they all have the same mission within their plan design; you die, it pays. But did you know that you could get a term life insurance policy with the same benefit but much more coverage for no additional premium? So this is a policy that does not just have a death benefit, but it also has excellent benefits for when you are alive.
These plans designs are referred to as term life insurance with living benefits. They are packed with many other benefits if you are diagnosed with chronic and critical benefits. These plan designs possess much more value for your money than just a cookie-cutter term policy by far. Keep reading, and you will see why these plans make much more sense than just purchasing basic term policies.
Term life insurance is the most cost-effective product. Living benefit policies are term products with additional benefits and value. These are not add-ons; North American and American National Life build these benefits into their policies at no additional cost. Quote them and see for yourself!
Table of Contents
- What Are Living Benefits & How Do They Work?
- What Are Critical Illness Benefits?
- What Are Some Examples of Critical Illnesses?
- What Are Chronic Illness Benefits
- What Are Some Examples of Chronic Illnesses?
- What Are Accelerated Death Benefits?
- Where Can I Compare the Rates for These Plan Designs?
- How Can I Apply for Living Benefits Life Insurance?
- In Conclusion
Living benefits are simply substantial benefits you can use when you are alive.
As with any conventional term life insurance policy, you have one benefit: your death benefit. If you die by accident or natural causes, your insurance company pays out your face amount that is stated in your life insurance contract. When this happens, your policy meets its obligation, and the policy then terminates.
If you purchase term insurance with living benefits, you have much more than just a simple death benefit. You would also have benefits if you were diagnosed with a critical illness that is usually life-threatening. You also have a benefit for chronic illnesses, which could drastically affect your quality of life and overall health for years to come.
If you purchase cancer or a critical illness policy as a stand-alone policy and then purchase life insurance, your total expenses might not be cost-effective or even affordable for most people. If you purchase life insurance with living benefits which is only one policy with all the benefits combined, your cost factor would be very affordable, and you would have excellent forms of coverage for any situation you may encounter.
Most people view life insurance as a product that guarantees income and financially helps your dependents in case of their demise. That has all changed with these new policy designs.
Let’s Take a Close Look at the Living Benefits in Detail
Let me first say that several life insurance companies offer term life insurance policies with living benefits. The living benefit concept has been around for several years, but most agents don’t want to spend the time to learn about these excellent products. This also means that life insurance consumers never get a chance to know this product exists, much less how much value they have over conventional term insurance.
We normally use the North American Life Insurance Company or American National Life for all our clients due to their excellent benefits and competitive rates. For this blog post, we will stick with North American to keep it simple since they usually have the most comprehensive benefits and the lowest rates.
Critical illnesses are usually the more common serious medical events that could take your life.
A physician must provide written certification that the insured has incurred one of these specified medical conditions. Please remember that the owner must file the claim within 12 months of being diagnosed with one of these medical events.
1. Heart Attack:
A heart attack is defined as the death of heart muscle due to inadequate blood supply that has resulted in evidence of myocardial infarction based on the typical rise and gradual fall of Troponin and other biochemical markers of Myocardial Necrosis with at least one of the following:
a. Typical clinical symptoms (chest pain may or may not be present);
b. Characteristic electrocardiogram (ECG or EKG) changes; or
c. Coronary artery intervention.
Cancer is defined as any malignant tumor positively diagnosed with histological confirmation and characterized by the uncontrolled growth of malignant cells and tissue invasion. The term malignant tumor includes leukemia, lymphoma, and sarcoma.
Types of cancers that would not be covered:
These types of cancer would normally not be life-threatening and are relatively simple to eliminate.
- Having borderline malignancy
- Have low malignancy potential
- Non-malignant skin cancer
The medical profession refers to a stroke as a cerebrovascular accident defined as a definite diagnosis of an acute cerebrovascular event caused by intra-cranial thrombosis, hemorrhage, or embolism with acute onset of new neurological symptoms and new objective neurological issues upon a clinical examination, persisting for at least 96 hours following the date of diagnosis. These new symptoms must be corroborated by diagnostic imaging testing.
4. Major Organ Transplants
Major organ transplants are defined as the recipient of a transplant of bone marrow or a full heart, kidney, liver, lung, or pancreas, or inclusion formally on the United Network of Organ Sharing (UNOS) waiting list.
5. Kidney Failure:
Kidney failures are defined as a chronic and end-stage renal failure (failure of both kidneys to function effectively) diagnosed and managed by a nephrologist, as a result of which regular dialysis is necessary.
6. Accelerated Death Benefits:
An accelerated death benefit could be paid out if so desired by the insured if a physician determined you could die within six months to a year. The maximum amount would be as high as 90% of the face amount up to $1,000,000, depending on what your face amount is for your specific policy.
Most people consider life insurance a product that will help them if they die when it is for their family members instead. On the other hand, living benefits can help the applicant when they are living and their family if they pass on.
Coverage for chronic illness allows the owner to accelerate a portion of the face amount when the insured is diagnosed with a chronic illness, as defined below.
Qualifications for Benefits:
A physician must provide written certification that the insured has been chronically ill within the last 12 months. This medical certification is valid for 12 months. The insured is considered to be chronically ill if he or she:
A. Is unable to perform at least two activities of daily living (ADLs) without substantial assistance from another person for at least 90 days; or
B. Requires substantial supervision by another person to protect oneself from threats to health and safety due to severe cognitive impairment.
C. The activities of daily living are bathing, continence, dressing, eating, toileting, and transferring. These activities of daily living are those basic human functional abilities that measure the insured’s ability for self-care, to live independently without substantial assistance from another person, as described below.
1. Bathing: the ability to wash oneself by sponge bath or in either a tub or shower, including the task of getting into or out of the tub or shower;
2. Continence: the ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene and also including and caring for a catheter or a colostomy bag.
3. Dressing: the ability to put on and take off all clothing items and any necessary braces, fasteners, or artificial limbs.
4. Eating: the ability to feed oneself by getting food into the body from a receptacle (such as a plate, cup, or table) or by a feeding tube or intravenously;
5. Toileting: the ability to get to and from the toilet, getting on and off the toilet, and performing associated personal hygiene; and
6. Transferring: the ability to move into or out of a bed, chair, or wheelchair.
What is Severe Cognitive Impairment?
Severe Cognitive Impairment is defined as deterioration or loss of intellectual capacity that is measured by clinical evidence and standardized tests, which can measure impairment in:
- Short-term or long-term memory loss
- Orientation to people, places, or time
- Deductive or abstract reasoning
- Judgment as it relates to insureds safety awareness
An individual could develop one of these illnesses and live a disabled life for many years.
- ALS (Lou Gehrig’s Disease)
- Multiple Sclerosis
- Parkinson’s Disease
- Rheumatoid Arthritis
- Cystic Fibrosis
- Cerebral Palsy
- Alzheimer’s Disease
- Muscular Dystrophy
Accelerated death benefits are simply designed to pay you a percentage of your death benefits while you are still living if your doctor expects you to expire within 12-24 months.
The Accelerated Benefit Riders (ABRs) are offered for no additional premium. The accelerated benefit payment will be less than the requested death benefit because of an actuarial discount and an administrative fee of up to $500.
The amount of the actuarial discount primarily depends on the insured’s life expectancy at the time of the election. Accelerated death benefits are another benefit of term life insurance with living benefits.
Accelerated Benefit Riders
ABR for Terminal Illness:
For use, if an eligible insured is diagnosed with an illness or chronic condition that is expected to result in death within 12 to 24 months, depending on state definitions. Each state may be different.
ABR for Chronic Illness:
For use, if an eligible insured cannot perform two out of six activities of daily living such as bathing, continence, dressing, eating, toileting, or transferring or has a severe cognitive impairment.
ABR for Critical Illness:
For use, if an eligible insured experiences a critical illness described in the rider after the issue date.
Minimum Policy Death Benefit to Obtain Riders:
If someone applies for life insurance with a very small face amount, they would have to carry these minimum face amounts to qualify for terminal and chronic illness benefits.
• Terminal Illness: $25,000
• Chronic & Critical Illness: $50,000
Maximum Death Benefit Eligible for Acceleration:
• $2,000,000 (issue ages 0 through 65)
• $1,000,000 (issue ages 66 or older)
Policies exceeding the maximum acceleration amount will still contain the Accelerated Benefit Riders; however, the owner will only be able to accelerate up to the maximum death benefit eligible for acceleration.
There is no minimum partial acceleration request; however, partial acceleration will not be allowed if the policy’s face amount is reduced below the minimum required for the product. The accelerated benefit may be paid in a lump sum or applied to any settlement option under the contract that does not involve life contingent payments.
Comparing the rates for these companies is a snap. All you have to do is complete the form on the right to activate our quoting system and look for these companies North American Life Insurance and American National Life Insurance. There are no riders to add on, these living benefits are built into their plan designs. You can also use our instant life insurance quoting form as an option.
We normally have our applicants apply by telephone using the simple and quick SnapApp process. A telephone application can take less than 20 minutes to complete, and all you have to do is sit back, listen to the young lady ask you the application questions, and then answer them.
This makes the process of paper or online applications obsolete. If you never applied for life insurance before using a telephone application, you can in for a real treat.
There you have it; as you can see, modern term life insurance with living benefits policies cannot even be compared to a standard term life insurance policy. There is much more value in these policies; the great part is you can use these great benefits while you are still alive.
It is basically like having multiple policies simultaneously but only paying for one. I know you have questions about these plan designs, so don’t hesitate to contact me. We are available seven days a week to answer your questions.
All the best,
If you have questions about these excellent plans, contact us today to help you with no cost or obligation. We are insurance brokers that work for our clients, not the insurance companies. Our job is to help you get approved for the best policy at the best rates. You can also set up a time at your convenience to talk. Thank you for taking the time to read this blog post!