Another rider benefit that many policies (particularly newer ones) offer is a nondeath benefit, where the insured receives the insurance payout without dying.
One of these provisions covers accidental dismemberment, in which you lose an arm, a leg, or vision in one or both eyes due to an accident (not an illness or disease). Typically, you can receive a portion of the total face value, depending on whether you lose one limb or two, one eye or two, and so on. The insurance contract clearly spells out the amounts you receive in each instance.
You can also get a policy rider to cover you if you suffer a catastrophic illness such as a stroke or kidney disease, and a rider if you suffer from a terminally ill disease. This kind of coverage has become increasingly popular as more and more people face the issues of aging, AIDS, and high-tech medical care that extends lives.
With this rider, if you are terminally ill and have less than one year to live (your doctors must provide certified statements to that effect), your insurance company will allow you to, in effect, take an advance on the face value of your death benefit. Usually, you can withdraw a percentage of the total coverage — perhaps as much as half, although more likely one-quarter or one-third. Most companies charge a fee to take advantage of this benefit, the amount of which depends on how much coverage you have and the percentage you’re withdrawing. The amount you take out reduces your death benefit, so if you live longer than expected, your coverage is lower.
Don’t confuse this kind of coverage with disability insurance, which covers your expenses if you become partially or totally disabled and can’t work, or long-term care insurance, which pays for nursing home care or in-home nursing care. This coverage is an actual payment from your life insurance company because you’re terminally ill and you want to be able to use some of the death benefit before you die.
One of these provisions covers accidental dismemberment, in which you lose an arm, a leg, or vision in one or both eyes due to an accident (not an illness or disease). Typically, you can receive a portion of the total face value, depending on whether you lose one limb or two, one eye or two, and so on. The insurance contract clearly spells out the amounts you receive in each instance.
You can also get a policy rider to cover you if you suffer a catastrophic illness such as a stroke or kidney disease, and a rider if you suffer from a terminally ill disease. This kind of coverage has become increasingly popular as more and more people face the issues of aging, AIDS, and high-tech medical care that extends lives.
With this rider, if you are terminally ill and have less than one year to live (your doctors must provide certified statements to that effect), your insurance company will allow you to, in effect, take an advance on the face value of your death benefit. Usually, you can withdraw a percentage of the total coverage — perhaps as much as half, although more likely one-quarter or one-third. Most companies charge a fee to take advantage of this benefit, the amount of which depends on how much coverage you have and the percentage you’re withdrawing. The amount you take out reduces your death benefit, so if you live longer than expected, your coverage is lower.
Don’t confuse this kind of coverage with disability insurance, which covers your expenses if you become partially or totally disabled and can’t work, or long-term care insurance, which pays for nursing home care or in-home nursing care. This coverage is an actual payment from your life insurance company because you’re terminally ill and you want to be able to use some of the death benefit before you die.
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