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Chances are if you own a life insurance policy it may include some sort of accelerated benefit rider (ABR), and you may not be aware of how this benefits you.  Furthermore, it may not even have been discussed in great detail or even given any special consideration when the actual policy when purchased.

Traditionally, an ABR is exercised or made available following an insured’s diagnosis of a severe illness where the insured is not expecting to live beyond a 12 or24 month period.  For example, once the health diagnosis is made, the insured could accelerate or advance a portion (perhaps up to 50%) of the policy face amount (death benefit) not to exceed a maximum amount of $250,000.   The insured may want to use these funds from an ABR to offset medical related bills or use to fund one or more “bucket list type” vacations with his family.  So on a $500,000 policy, $250,000 could be accelerated and $250,000 (the remaining policy balance) would be paid to the beneficiary upon the insured’s demise.

What’s new with these ABR’s you might ask?  For starters, people are living longer and one could experience a critical or chronic illness that could be very expensive to finance: were there lost wages, medical expenses and/or nursing care in the home or via a nursing home associated with the illness?  We are now seeing certain policies issued that allow up to 100% of the insurance policy face amount to be accelerated to a maximum of $1,500,000.   So in essence, an ABR is a “living benefit” that could mitigate this potential risks while preserving one’s overall assets.

A few questions to consider: when was the last time your life insurance was reviewed; what sorts of “living benefits” are available and if you were to experience a critical or chronic illness and how would you choose to finance it? 

  Put ISA to work for a no obligation review of your policy.  Contact Matt Bradley 828-350-3309; mbradley@isa-avl.com.

Posted 12:21 PM  View Comments

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