Illness and Injury always happen when you don't expect it. No one has a sticky note on the refrigerator saying "Thursday I'll have a stroke". This is why you want to have protection in place before a situation arises.
Life Insurance is an agreement you make with an Insurance company where in exchange for a premium they agree to pay a lump sum of money to the person, organization, or entity you designate upon the premature death of the insured.
Factors that influence Life Insurance rates are age, sex, amount of coverage and health of insured.
1. Term - Term is less expensive, it last for a specific length of time (10 years, 20 years), so you can outlive it. Term earns no cash value. I refer to Term as renting. The longest period term will last is 30 years.
2. Permanent – Permanent also called Whole Life and Universal Life is more expensive. It will last your entire life no matter how long that is. It includes a savings account that can be accessed. Many people use it as a retirement supplement or college saving. I refer to Permanent as owning.
Today there are policies that in addition to paying when there is a loss of life, they will also pay if you become ill? This is referred to as Living Benefits.
No one ever expects to become ill, but hospitals and nursing homes are full of people that didn't expect it either. None of us are getting younger.
Living Benefits are offered by many companies at no additional premium. Living Benefits are available with both Term and Permanent (Universal Life) Life Insurance policies.
Living Benefits pay when you are “Diagnosed” while you are still alive. Illness and Injury always create additional expenses.
1. Terminal Illness
If an eligible insured has an illness or condition that is expected to result in death within 24 months or less.
2. Chronic Illness
If an eligible insured is unable to perform 2 of 6 Activities of Daily Living (ADLs) for a period of at least 90 days or requires constant supervision to protect from threats to health or safety due to severe cognitive impairment.
The ADLs include bathing, continence, dressing, eating, toileting, and transferring.
3. Critical Illness Rider