Three methods of using living benefits:
1) Most carriers offer a terminal illness rider which is built into their contracts usually at no charge. This allows access to the death benefit for the insured if they are diagnosed with a terminal condition and are expected to die within 6-24 months. Nothing new here as carriers have been doing it for years.
2) About 5-6 years ago, some carriers added an optional long term care rider to their permanent life insurance policies. Should the insured have the inability to perform two of the activities of daily living or have a cognitive impairment, the insured could withdraw tax free money from the death benefit of their life insurance to pay for long term care needs. This could include several forms of care: home health, assisted living, or nursing home care.
Keeping an example simple…and using a common method:
John has a $300,000 universal life policy with a LTC rider. Many carriers allow for a 2% withdraw. So if John needed long term care services, he could receive $6,000 per month tax free from his life insurance policy to help pay for LTC services. He would receive this $6,000 until the death benefit is exhausted; or about 50 months. 2% of $300,000 is $6,000. Many clients find these combination policies attractive as they answer several objections they may have toward traditional LTC insurance. Such as ”What if I die without needing LTC services?”
Now here is the living benefit that really has me excited.
3) Some carriers have added a CRITICAL ILLNESS rider to their life insurance products.
Access to the death benefit while alive if the client has one of a number of critical illnesses such as: Heart attack, stroke, invasive cancer, Parkinson’s, paralysis, ALS, kidney failure…up to 16 different illnesses.
Your 46 year old client is diagnosed with a severe heart attack. He’s going to live, but is going to miss some work and has health care bills mounting. How helpful would it be if he could get $50,000 from the face value of his life insurance policy now?
Your 56 year old client is diagnosed with pancreatic cancer. She has a good chance of surviving but is going to need chemo and other treatment. Her husband is going to miss time at work because he has to care for her and take her to treatment. How helpful would $160,000 be from the face value of her policy?
Your 23 year old nephew is in a car accident and suffers multiple organ damage. What if he could get $80,000 from his life insurance policy?
Critical illness can happen at any time. Your clients and prospects know this. Having living benefits, including a critical illness rider, as part of a life insurance policy provides great value to the insured.
We now have carriers that have living benefits included in TERM INSURANCE. Some with top 10 pricing….literally just a few cents or dollars more per month then the lowest cost term you may offer.
We can train you and have you selling either term or permanent life insurance with living benefits. We know the carriers and the “little nuances” between products. We have turn key marketing and sales ideas. We know what is working and can share with you new markets to approach with living benefits.