The price tag of living longer is getting higher. The cost of defending against future events may be too costly to consider, i.e. long term care individual coverage. Some hybrid products may be suitable for some, but the benefits have to be measured against the internal policy expense loads. Enter the concept of Accelerated Benefit Riders (ABRs) as an ancillary purchase with life insurance.
ABRs can cover a wide range of events for policy insureds. First, the life insurance policy needs to be designed to indemnify family members who would suffer economic loss if the policy insured dies. Many couples have financial justification for death benefit coverage. Once financial justification is established an array of riders can be reviewed for their economic suitability.
ABRs are living, supplemental benefits that can provide funding from the policy death benefit (thus the verb ”accelerated”) at a discounted rate for: Terminal Illness, Chronic Illness, Critical Illness or Critical Injury. Benefit triggers are based on two of the six activities of daily living: Bathing, Continence, Dressing, Eating, Toileting and Transferring.
Using ABRs could be a strategic part of the defensive side of your finances and/or retirement plan. Having these benefits at the ready could prove to insulate you from economic hardships due to a chronic illness or injury. The terminal illness provision could be a real benefit to you and your family in your last days. Several insurance carriers that offer these living benefits have entered the marketplace, some requiring some underwriting, others include these ABR without a medical exam.
Before moving forward with any of these ideas, seek out advice from an insurance professional or retirement specialist to determine if ABRs could be a solution for you and your spouse.