Term Life Insurance with Living Benefits

There are several life insurance companies who have living benefits on their term life insurance policies. These living benefits allow the owner of the policy to accelerate the death benefit in the event of a qualifying illness, such as terminal, chronic, or critical illness. It is highly recommended to see if your current policy or one you are about to purchase has built in living benefits you can accelerate before you die, and if the policy does not have these three benefit riders it could make a lot of sense to switch and replace your current policy. The price difference is usually about $3 per month extra to have a term life insurance policy with living benefits. Do not assume your current term policy has living benefits, pull out your policy or call the insurance company and make sure. If you need assistance someone on the Pacific Insurance Group team based out of Bellevue Washington would be more than happy to help.

Terminal Illness
According to life insurance policies purchased in the State of Washington (and most other states) a person is considered terminally ill if their doctor confirms they have two years or less to live. An example of an active policy from someone who lives in Seattle Washington says: “Terminal Illness means the Insured has been certified through a written certification by a Physician that the Insured has been diagnosed with a medical condition which results in a drastically limited life span. A drastically limited life span is a life span of 24 months or less.”

Chronic Illness
More and more people are utilizing life insurance policies to hedge against the exposure of going bankrupt because of a chronic illness. The definition of chronic illness from a policyholder who lives in Bellevue Washington says: “Chronic Illness means the Insured has been certified through a written certification by a physician within the last 12 months as:

  1. Being permanently unable to perform, for at least 90 consecutive days without Substantial Assistance from another person, at least two Activities of Daily Living; “90 consecutive days” includes consecutive days immediately prior to the Policy being in effect; or
  2. Requiring Substantial Supervision by another person, to protect oneself from threats to health and safety due to Severe Cognitive Impairment.

Furthermore, the “Activities of Daily Living”are:

  • Bathing
  • Continence
  • Dressing
  • Eating
  • Toileting
  • Transferring

Critical Illness

     A Critical Illness means the Insured has been certified through written certification by a Physician as having incurred a Specified Medical Condition within the past 12 months. Examples of Critical Illness are:

  • Cancer
  • Heart Attack
  • Kidney Failure
  • Major Organ Transplant
  • Stroke
  • Diagnosis of ALS (Amyotrophic Lateral Sclerosis)
  • Paralysis
  • Arterial Aneurysms
  • Central Nervous System Tumors
  • Major Multi-System Trauma
  • Auto-Immune Deficiency Syndrome (AIDS)
  • Major Burns
  • Loss of Limbs

It is important to note most term life insurance policies DO NOT have accelerated benefit riders built into the policy. If a policyholder has a qualifying terminal, chronic, or critical illness in the 19thyear of a 20-year term policy and is still alive, a policy with living benefits could mean the difference of going bankrupt or being able to pay their bills.

In summary, it is prudent to analyze the living benefit riders on term life insurance before purchasing a policy. If you need assistance or want an expert to review your current policy, reach out to someone on the Pacific Insurance Group team at 425-246-4222 or visit www.pacificinsurancegroup.com.