Life insurance is a crucial financial tool that provides security and peace of mind for you and your loved ones. Traditionally, life insurance policies are designed to provide a payout to beneficiaries after the policyholder passes away. However, there is a type of life insurance that offers an additional benefit – it can pay you while you’re still alive. This innovative feature can provide financial support in challenging times, such as when you’re facing chronic or terminal illness.
Understanding Living Benefit Insurance
Living Benefit Insurance is a life insurance product with a unique feature. In the event that you are certified as chronically or terminally ill, this policy offers a one-time accelerated payment of the face amount. This means that you can access a portion of the life insurance proceeds while you are still alive, providing you with additional financial support during difficult times.
Eligibility and Coverage Options
Living Benefit Insurance is available to AARP members between the ages of 50 and 80, as well as their spouses/partners between the ages of 45 and 80. It’s important to note that the availability of this product may vary by state, and the online application may not be accessible in all states. For further information or to explore coverage options beyond what is available online, you can reach out to New York Life at 1-800-607-6957.
Accelerated Benefit and Living Benefit Considerations
While the living benefit option can provide much-needed financial assistance, it’s essential to understand the potential implications. Receipt of the living benefit insurance proceeds might affect your eligibility for public assistance programs. Additionally, the proceeds may be taxable, so it’s advisable to consult with a financial adviser and/or attorney to evaluate how this may impact your personal situation.
Chronic Care Acceleration Benefit
To receive payments for the chronic care acceleration benefit, certain criteria must be met. You must have a permanent chronic illness for at least 90 consecutive days, which leaves you unable to perform two of the six activities of daily living without substantial assistance (bathing, dressing, eating, continence, toileting, and transferring). Alternatively, you may qualify if you have a severe cognitive impairment requiring substantial supervision. New York Life requires proof of a chronic illness as described in the Certificate before approving a claim.
Exploring Other Coverage Options
While Living Benefit Insurance provides a unique advantage, it’s worth considering other permanent life insurance products. There may be lower-cost options available with different features, including guaranteed acceptance products with a limited benefit period or a permanent product without the chronic illness acceleration feature. It’s always a good idea to discuss your needs and preferences with a licensed life insurance agent to determine the best coverage for you.
FAQs
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Who is eligible for Living Benefit Insurance?
Living Benefit Insurance is available to AARP members between the ages of 50 and 80, as well as their spouses/partners between the ages of 45 and 80. -
Can I receive payments for the chronic care acceleration benefit?
To receive payments for the chronic care acceleration benefit, you must have a permanent chronic illness for at least 90 consecutive days that leaves you unable to perform two of six activities of daily living without substantial assistance or have a severe cognitive impairment requiring substantial supervision. -
How can living benefit proceeds impact my eligibility for public assistance programs?
Receipt of living benefit insurance proceeds might affect your eligibility for public assistance programs. It’s advisable to consult with a financial adviser and/or attorney to understand how this may affect your personal situation. -
Are there other coverage options available?
Yes, there may be lower-cost permanent life insurance products available with different features, including guaranteed acceptance products with limited benefit periods or permanent products without the chronic illness acceleration feature.
Conclusion
Living Benefit Insurance provides a unique advantage by allowing you to access a portion of your life insurance proceeds while you’re still alive. This feature can offer crucial financial support during challenging times, such as when faced with a chronic or terminal illness. If you’re an AARP member between the ages of 50 and 80, or their spouse/partner between the ages of 45 and 80, you may be eligible for this innovative life insurance product. Consider exploring Living Benefit Insurance and other coverage options to find the best solution for your needs. Remember to consult with a licensed life insurance agent to ensure you make an informed decision.
