|
Some life insurance policies permit
you to "accelerate" the death benefit.
This provision makes it possible to collect on
your own life insurance before you die. Some companies
call this the "living benefit" provision.
If it is included in a policy, this provision
allows policyholders to receive all or part of
the policy’s proceeds prior to death under
certain circumstances, including the need for
long-term care or confinement in a nursing home.
*Accelerated Death Benefits are
not considered long-term care insurance however,
it could be a good supplement to your long-term
care planning needs.
How It Works
- May be built into the
policy or offered as a rider
- Intended to let you use
death benefits to pay hospital or medical bills
connected with terminal illness
- Generally requires a qualified
physician certify that you have a terminal illness
and are expected to die within a short time
(the amount of time will be specified in the
policy but is typically 12 months.)
- The policy may limit the
dollar amount you can "accelerate"
prior to your death.
Be Cautious
If you accelerate and use the death
benefit, there will be less left in the policy
for your family or other beneficiaries when you
die.
You should consult with a personal
tax advisor if you consider electing an accelerated
benefit. Benefits specified in your policy will
be reduced by an accelerated benefit payment.
Receipt of accelerated benefit payments may be
taxable or may affect your eligibility for benefits
under state or federal law.
Next
» 5. The Truth About Medical Tests
|
Accelerated
Death Benefits