Living benefit riders

Accelerated Benefits Rider

A life insurance rider that allows for the early payment of some portion of the policies face amount should the insured suffers from a terminal illness or injury. Typically 50% of death benefit although some policies allow up to 100%. Many policies today offer this benefit automatically. Any money left when insured dies goes to beneficiary. Most states require disclosure statement to applicant at time of application.

Effect of LTC rider on the policy death benefit

Generalized (independent) option- LTC rider benefits are separate from life policy death benefit. Beneficiary received full death benefit when insured dies. Higher cost. Integrated option- LTC benefits are linked to life insurance policy's face amount. Benefits paid out are drawn from the policy's face amount. Up to 70-75%. Modest cost.

Conditions for LTC payment

Insured must be certified as unable to perform at least two activities of daily living for at least 90 days. Must be certified within previous 12 months. Prior hospitalization not required to qualify. Elimination period may apply 10-100 days.

Long term care rider

Provides financial support for the cost of medical care, nursing home care, and assisted living care for extended durations. Does not require insured to suffer catastrophic injury to qualify. Typically modest cost.

Qualifying for accelerated benefits

The insured must prove they have a terminal illness or a catastrophic accident that results in permanent disability requiring long term care. Must be certified by a doctor with a condition that will result in death in 24 months. Insured may choose a lump sum or monthly payments set up over a set time period. Most states prohibit policies from imposing any restrictions or exclusions.