Last Updated on February 28, 2021 by Matt Schmidt
When you want your loved ones to be taken care of after you die, you make sure that you have life insurance coverage in place. Then, upon your death, as your family is mourning and grieving, they will be able to rest easy knowing that you had an insurance policy in place to take care of future expenses without any increased burden.
Over time, life insurance carriers have evolved, for the better. What if you could purchase a policy, where if you suffered a serious illness, you could access part of the death benefit? Better yet, what if policies offered this benefit, for the same cost of other companies who do not offer these benefits.
All you need is a life insurance policy that offers living benefits, and provides flexibility that traditional policies do not offer. For people who have Diabetes, a life insurance policy with living benefits could prove to be beneficial for you and your family, in the future. Afterall, it’s impossible to predict tomorrow, let alone twenty or 30 years down the road.
Securing a life insurance policy is an extremely important financial decision for you and your family. But knowing what exact riders you can also qualify for is as important. Many people are not familiar with how life insurance can actually cover you.
Finding life insurance with Diabetes can be challenging at times. But finding a company that will underwrite you fairly, and offer living benefits is even tougher. Here at Diabetes Life Solutions, we strongly recommend obtaining a policy that would provide living benefits, or accelerated death benefit riders. Not every person with Diabetes will qualify for these riders, so we do want to be upfront and point this out.
What are Living Benefits?
You may be questioning what these living benefits are and just how you receive them. Believe it or not, it is just about as simple as adding a rider to your insurance policy. Living benefits may fall under one of a couple different names, including a living benefits rider, accelerated death benefits, or a living needs benefit rider, but they all mean the same thing: You need to dip into your life insurance policy while you are still living for certain specified, approved reasons to maintain your quality of life.
Life insurance companies add living benefits to policies so that clients can take advantage of their life insurance during their lifetime. There are several different types allowing for different options. Here at Diabetes Life Solutions, we feel that these living benefit riders are some of the most important life insurance riders, to have on a policy.
So, can anyone utilize their life insurance whenever they want? Or, what are the approved reasons a living benefits rider may come into play? Let’s dig a bit further, shall we?
The only way a person could access part of their death benefit, is to experience a health event that falls under the specific rider’s list of health conditions. Living benefits
Be prepared for the unexpected: critical illness
Nobody writes “critical illness” down on a to-do list. Many critical illnesses come on unexpectedly. And, if you are not prepared for them, they can cause quite a stir in life as you know it. For instance, many critical illnesses mean that you will be out of work and your income may take a nosedive.
In turn, your bills may suffer, leaving you financially strapped. Critical illness may be considered as a heart attack, stroke, cancer, organ transplant, aneurysm, as well as others. Various life insurance providers will have their own list of health conditions. So it’s smart to have a conversation with your agent, and see what companies are ideal for you.
Having a living benefits rider associated with your life insurance policy will allow you to take one lump sum percentage of your policy amount to help you cover your unexpected expenses. If you are diagnosed again in the future with another form of a critical illness, you may be able to access the policy again.
Be prepared for the unexpected: chronic illness
Chronic illness can come out of nowhere. And, because it is chronic, it may last for an extended period of time. This brings hardship on an individual and, consequently, on the family, too.
If you have a living benefits rider with your life insurance, you may be able to tap into some of your policy funds. While it may vary depending on the insurance company, to qualify for the chronic illness living benefits, you may have to show hardship with a couple of tasks which may include daily living, bathing, eating, and/or dressing.
Those living with chronic illnesses or know someone who does understand the level of care required increases with time. For example, you may need…
- Home modifications to make it more accessible to you.
- Nursing home care.
- Extended hospital stays.
- Home health care
With the loss of income that is likely to occur, paying for these needs can become incredibly difficult. However, receiving some of your the benefits of your life insurance in advance allows you to cover the costs of the things that will make your life a bit more comfortable.
Be prepared for the unexpected: terminal illness
What happens when you have been diagnosed with a terminal illness? Your family gets stressed, your expenses increase, and your life changes dramatically. Knowing that you have a living benefits rider can make the transition so much easier. It’s up to you as to what you prefer to spend the money on, but, if you have been told that your life expectancy is somewhere between 12 and 24 months, you will have the opportunity to receive some of your benefits early.
According to USA Today, nearly one in four cancer patients indicated that they spent all or most of their families savings to help cover treatment. Also, one in eight patients were refused treatment due to the costs involved.
We hope no one ever is faced with this situation. But if you had a life insurance policy, with a terminal illness rider at no added cost, it may be of great benefit to you and your family
The Underlying Details
Not just any life insurance policy will come with the ability to take out money using the living benefits. Most insurance companies that allow these riders require a minimum policy. Typically, to receive payouts for terminal illness, a minimum policy of $25,000.00 is required. And a minimum policy of $50,000.00 for critical and chronic illness.
Keep in mind that the information received in this article is a general description of living benefits in life insurance policies. The exact figures will vary depending on your own situation and your chosen life insurance provider. In addition, each of these requirements, benefits, and riders are dependent on the laws and regulations in each state.
Are There Fees to use Living Benefits?
Now, here is the big question – are there fees to take advantage of living benefits? Well, of course. Insurance companies are running a business so it is logical that they would also provide you the opportunity to utilize the funds of your policy early, as long as they benefit in some way.
The majority of companies will charge a one time fee, when the policy holder elects to use one of the living benefit riders. Fees may range from $250 to $750.
Whatever amount you choose to accelerate, will offset your death benefit amount. As an example, you have a $250,000 policy. You suffer a heart attack, and elect to accelerate $75,000. Your policy will be reduced to a $175,000 death benefit.
When initially taking out your life insurance policy, you may be offered a living benefits rider at no extra cost. This is wonderful, though not overly common. This simply means that having these riders will not impact your life insurance premiums. We would prefer our clients have policies with these riders, to add additional levels of protection.
But with some carriers, adding the riders will cause your premiums to increase. This is a perfect example of why you need to work with an agent who’s not only trained to work with the Diabetes community, but one who knows which companies will work best for your situation. Generally, it doesn’t make sense to pay more for a policy with these benefits, if another provider offers the same riders, at NO extra cost.
Don’t be afraid to contact us. A quick call to 888-629-3064 is all it takes, to begin receiving real and accurate life insurance information.
How Much of my Life Insurance Policy can I Accelerate?
Not all life insurance companies have the same guidelines. So there’s really not a ‘straight’ answer we can provide.
One life insurance carrier may allow you to accelerate up to 95% of the policy. While another will limit you to 50%.
Also, some companies may allow you to utilize a rider, more than one time. Meaning you could have a heart attack, and receive part of the death benefit. Then in the future, you have another heart attack, and would be able to access part of the policy again.
Due to all the life insurance companies having their own guidelines, you’ll want to speak with our agents, and have them help you select the company that fits your needs.
We’ll also point out that a person DOES NOT ever have to accelerate any of the death benefit through these riders. This decision is 100% up to the policy holder. In the event you suffer a health condition that could trigger any of the additional benefits, you are not obligated to use them.
What are Some Companies Who Offer Life Insurance with Living Benefit Riders?
First, you have to remember that NOT all life insurance companies are going to offer policies to people with Gestational Diabetes, Type 1 Diabetes, or Type 2 Diabetes. It’s imperative you first speak with an agent, share with them your Diabetes, and overall health history. From there, we’ll be able to make recommendations as to what life insurance companies may be able to offer these valuable riders to your policy.
American National Life – American National Life offers these living benefits at no extra cost for their Term, Indexed Universal Life, and Whole Life products. For certain individuals with Diabetes, you may qualify for a no medical exam policy.
American General – AIG offers these benefits for their Term, and Universal Life products. However, by electing a policy with these riders, the premium amounts will be more expensive, compared to their policy which doesn’t offer all these living benefit riders.
Foresters – Foresters offers living benefit riders on all of their products. Term, Whole Life, and Guaranteed Universal Life products. For some diabetics, you may have non medical exam options.
Transamerica – Transamerica is currently offering living benefit riders for their Term Life Insurance products. Depending on your Diabetes and health profile, you may qualify for a non medical exam option.
Contact Us Today
There is a lot to learn about life insurance, and Diabetes. Sadly, there’s a lot of misinformation out on the internet, as other websites provide FAKE quotes to the Diabetes community. These sites like to ‘trick’ people to apply for coverage, using fake prices that a diabetic would not qualify for.
Do yourself a favor and hire an independent agent with Diabetes Life Solutions. This individual will talk in detail with you about your needs and wants. Then, help guide you to the right policy. No high pressure sales tactics, but rather we’ll just provide the facts to you. Don’t just guess what company is the best life insurance for diabetics. Call us at (888) 629-3064 and begin the initial conversation with us.
There are so many life insurance companies out there. And, they are not all created equal. Our agents know which would be best suited for your health situation and, through their network, will help you with the application process.
Besides, wouldn’t it be wonderful to have someone on your side to teach you about the options you have, such as a living benefits rider? Absolutely.
So, what are you waiting for? Contact us today and get yourself covered.