Another source of financing for long-term care expenses is to draw down life insurance benefits during life, pursuant to an
accelerated benefit rider on a life insurance policy.
These could include long-term care riders,
accelerated benefit riders or waiver of premium riders.
The no-cost
accelerated benefit payout is based on a formula linked to the death benefit or net amount at risk, which applies a factor that can vary based on the insured person's age at the time of claim.
Market options now include
accelerated benefit riders for chronic illness, which allow policyholders to access cash value in the policies to help pay for assisted living, nursing home care, adult daycare and more.
For example, under some policies
accelerated benefit payments may be made for care in the insured's own home rather than a convalescent facility.
When I said 'cash value' to people, they said it meant 'what something is worth, the value of a product or service in cash.' For the term '
accelerated benefit, 'which is another feature we promote with insurance, one person thought it was a Cadillac plan and another thought it was a high-profile investment with a high yield.
The end-to-end breadth of Dell's solutions approach brings
accelerated benefit to Jenkon's IT environment, benefitting their customers and their business overall.
The concept is simple: those who need to access policy benefits to cover costs of care for a condition such as Alzheimer's can use the
accelerated benefit feature to do so.
However, I have found that serving the needs of the surviving spouse provides tremendous peace of mind for my clients, and by using
accelerated benefit riders I can help supplement long-term care needs as well.
NWL Living Benefit Term provides life insurance protection in the event of death, plus provides an
accelerated benefit for protection from unexpected events that may adversely affect a client's life expectancy.
The annuity portion of the benefits, which is exempt from Section 417 requirements, would be treated separately from the lump sum or
accelerated benefit, which would remain subject to the minimum present value requirements.
(The use of cash values and death benefits for LTC payments is considered a form of "self-funding.") The
accelerated benefit, whether paid from the net amount at risk or from the rider providing separate LTC coverage, will be entitled to favorable tax treatment provided the contract is a "qualified long-term care insurance contract" (QLTCI).