LIVING BENEFITS STORIES
PROTECTING INCOMES WHILE RECOVERING
With a Cancer Diagnosis, Jane uses Her Life Insurance for Income
Jane (42), the owner of a flourishing baby clothes store in San Francisco, is a single mom with two kids Taylor (9) and Brooke (6).
On an annual mammogram, it is discovered she has breast cancer. She is worried about her children, potential loss of income, and how she will keep the store afloat while undergoing cancer treatment.
Jane undergoes aggressive treatment with a mastectomy, radiation, and chemotherapy. The treatment is so taxing, she lacks the stamina to work at the shop and needs help with the kids. Expenses are high and income is low.
Jane's insurance agent indicates she is eligible to accelerate some or all of her $500,000 living benefits life insurance policy.
After filing a claim and doctor's report, the insurance company offers to accelerate $400,000 of her benefits paying at a rate of 38 cents per dollar (time value) for a lump sum of $150,000.
$400,000 X 32% = $150,000
Accelerated Benefit X Time Value = Lump Sum
After the accelerated benefits are paid out, Jane still has $100,000 left in future life insurance benefits.
The influx of cash was a huge safety net and stress reliever for Jane as she was able to spend time recovering instead of having to return to work prematurely.
After a Stroke, Frank Uses His Life Insurance for Long Term Care
Frank (44) is a software engineer with his wife Sabrina (37) and two children Sean (8) and Olivia (6). Sabrina is a pediatric nurse currently staying at home taking care of the kids.
One day at work, Frank has a major stroke suffering paralyses on his right side. He's in the hospital for two weeks and later transferred to a rehabilitation facility for two months of physical therapy.
After extensive rehabilitation, Frank goes back home to their San Francisco Victorian, but is having trouble safely moving around the house, bathing himself, eating on his own, and climbing the stairs.
Sabrina plans to find a nursing position to bring in income, but she is concerned about leaving Frank and the children by themselves.
After some research Sabrina, sees that hiring help for Frank and a baby sitter for the kids will cost about $6,400 per month.
Frank's life insurance agent tells him that his living benefits life insurance policy can help pay for long term care expenses.
Frank files a claim and doctor's report with the life insurance company to accelerate his benefits early.
His $500,000 policy with a special rider, allows him to accelerate 2% of the total life insurance benefits per month with no time value of money discount. Thus, he is eligible for $10,000 per month.
Frank needed help for 15 months at $10,000 per month. A $150,000 of benefits was accelerated, with no need to pay it back.
$500,000 - $150,000 = $350,000
Original Benefit -- Accelerated Benefit = Remaining Benefit Left
The monthly benefits gave financial security for Frank's family and provided him the opportunity to recover from his stroke, on his time.