Life insurance has over the decades been synonymous with death. The industry has evolved since then with innovative new products and customer-centric programs. The most innovative is the introduction of Living Benefits.
This optional rider covers most illnesses and accidental injury during the lifetime of the insured. Depending on the severity of the illness or injury most policyholders receive, tax-free, up to 70% of the face value of the policy. Having access to this money allows policyholders to pay for care and other needs that would otherwise have not been possible. I like to think of Living Benefits and a way to restore a person’s dignity when life happens.
The other side of the coin is the insurance company pays out the insured and reinvests the remaining 30% for themselves. The policy does also end. Is this a win-win for the insured and the insurance company. My take on this is, yes it is as the insured gets most of the money to use when they need it the most and the insurance company avoids paying 100% of the policy upon death allowing them to reinvest the approx. 30% to boost their profitability.
Most existing Life Insurance policies do not have living benefits. A recent client had plans for five members of his family and wanted me to review their coverages. A reading of the documents showed they had Term Insurance due to expire in 10 years. I was able to replace those policies with permanent (up to age 120) coverage that included Living Benefits at the same premium they were paying for the old policies. This why I do this!
If you have any questions about life insurance, a life insurance policy for yourself or your family, or any other questions about insurance, give us a call.
