How Living Benefits Work With Life Insurance

Hey, what's going on cashflow hackers? It's Chris with life 180. And today we are talking about living benefits with life insurance. Let's face it life insurance oftentimes gets a bad rap as just being death insurance. Why would we call it life insurance? If in fact the only way that you you know, access the money is when you die. And ultimately if you look at life insurance is just death insurance and it's really not about how it benefits you. It's a how it benefits your family because at the end of the day, whether you are able to use it or not is not relevant. It's going to help your family and it really becomes a decision based on love, right? It becomes a decision based on all right, if something tragic were to happen to me if I were to meet an early demise, you know, how is my wife my husband my kids my family? How are they going to be are they going to be able to accomplish the goals that I that I want them to accomplish and that I would ultimately help them accomplish had I been here and lived a long fulfilling fruitful Productive life or you know, if that's not a value of yours, if you don't really care and sadly I've talked to people who sometimes just don't care what happens to people when they're gone to me, that's a really a really sad situation. But you know what I look at and I think is important to understand is that there are living benefits that can be a component to your life insurance policy. So just to put it simply let me define what living benefits are essentially. The only thing that living benefits mean is your ability to access benefits inside of the policy while you're alive. That's it. Now this can come in the form of cash value access. If it's a certain type of policy, it can come in the form of other styles of benefits that are notated in the policy. Now, this could be if you become critically ill chronically ill terminally ill there could be long-term care riders. There could be the cash value access. As I said in some instances, there are a lot of different ways that you can access the benefits while you're alive in your policy to help you solve different needs. I share the story all the time. My father-in-law could have diagnosed with stage 4 pancreatic cancer on November 4th of 2020. They gave him 90 days to live because he was able to accelerate the death benefit and get access to the living benefits with the terminal diagnosis. Even though the diet the the traditional oncologist given 90 days to live we utilize a lot of money accelerated from policies to be able to help pay for alternative treatment through more natural. I guess methodologies more old-school tradition, right? We call traditional medicine like the Western world medicine, but I look at traditional message medicine is like what happened before all the technology existed. I look at the body as the has the ability of really healing itself. My father-in-law has proved it. We're now as a day. I'm filming this video is October or August 17th 2024. So we're coming up on four years and the gentleman who is diagnosed with stage 4 pancreatic cancer with a seven and a half centimeter tumor that spread from his pancreas to his liver because we had the ability to accelerate the death benefit and utilize tax-free money for whatever type of treatment and quite frankly, whatever we wanted to have done with him at that point in time. We were able to find doctors and and and treatments that give him a fighting shot to this day. He's playing golf four days a week still and and enjoying life and being able to spend time with his family and grandkids and my wife is actually in Arizona visiting them right now while I'm in the Dominican Republic, right? And so like these are the things when I when I look at life insurance that that I think most people are not aware that you can utilize them. What is important though, is the fact that not every life insurance policy has living benefits and not every type of life insurance ie whether it's term insurance whole life insurance index universal life insurance traditional universal life insurance variable universal life insurance. Any of these things different types of products ie. I'm just going to speak about whole life for for instance, you could buy whole life insurance and some companies are going to have different living benefits that that they provide compared to other companies. And so it's one of the things when I always say like what's the proper design and what's the proper company for you to go with it really has to do more in alignment with what are your values and beliefs? What problems are you trying to solve? What are your concerns here now in the future and you got to look at all of the different variables and figure that out. And so it's one of the reasons that we work with the companies that we do because they all solve different problems. You go with a company like Mass Mutual or Guardian their living benefits are not that great, right? And so while their cash value and their stability is a company is great. There are other companies whose stability and in history and growth and liquidity and all the different variables that we talked about for like the banking policies and the cash flow hacking and the infinite banking style structures. Those are all important. But when we take those things into consideration, what's what's more important is like I look at if I could have a company that's going to perform similarly, but it's going to provide living benefits in addition. Well, there's a lot of value in that right where whereas these other companies might not be as good, right? So the just things to consider and where this really sticks out is with term insurance term insurance. There's a lot of term insurance that you can get this just really cheap, but you can get some term insurance where you actually have living benefits associated with it while you're alive. Now, if you're 40 years old and you buy a 20-year term policy, you can get the cheapest of the cheap term just to use this as an example, and you could you could get the 20-year cheapest of the cheap term and the chances are it's going to be cheaper because the odds of you dying before you're 60 are low, right? Now the chances of you needing access to the living benefits. If you become chronically or terminally ill, for instance, it's much higher, right? So your chances of needing to utilize it in that 20-year period are much higher. So the cost is going to be a little bit more but the benefit is going to be much much higher, right? So that that's important to understand when we look at the different living benefits now that I've given you that background what I want to do is is go into a little bit. What are the different types of accelerated benefit riders on policies? So the first thing that you need to understand is that they're what they're doing is these accelerated benefit riders are basically an acceleration of the death benefit. So typically speaking the first and easiest way and and the most common accelerated benefit rider is if you get diagnosed with a terminal illness if you get diagnosed with a terminal illness and and let's say you get cancer or something of that cord. If you are diagnosed with anywhere between 12 and 24 months to live typically if you don't treat it properly that's going to qualify you for the terminal rider on your policy and that they're going to accelerate a portion of the death benefit and pay that to you while you're alive in a tax-free basis, right? You can then utilize that money for whatever you want whether it's medical treatment or whether it's just taking a vacation to enjoy your life while you have it with your family something of that nature. I've even had clients that get the death benefit while they're alive and hand it to their family and gift it to their family and get to really experience what it's like passing it on the next a br is what's called the chronic rider chronic illness rider. And so basically you you can access the chronic illness rider when you have different daily living activities that you're not able to perform typically and this isn't the case in every situation, but typically what we see with the chronic illness rider is if you're not able to perform two out of six daily living activities like bathing dressing stuff with you know, things of that nature or you become cognitively impaired with like Alzheimer's or dementia that's going to qualify you for a chronic rider. But once again, not every company offers the chronic rider. So you want to make sure that that's something you're concerned about that you actually look for a company that provides that benefit for you. The third one is a critical illness rider now critical illness rider is going to be something this is less common. Not every company has it first of all, but this is going to be something when you're diagnosed with maybe a less lethal lethal cancer with a heart attack with a stroke or something of that nature. Then you can accelerate your death benefit when you have something one of those things happen to you. And what you want to do is you want to look at your policy. You want to look at the illustrations that are run for you and you want to go down to the critical care riders. See if it's there you want to look at the chronic riders. You want to see what they're there and you want to actually allow you to take advantage of the acceleration of the death benefit should something like that happen to you. So a question that I get a lot of times is all right. It's great that these riders are on there. But how do we take advantage of them? Well at the end of the day, it's it's like anything else. You're going to have to provide medical documentation. You're going to have to go to the doctor get statements that prove the medical situations that you're going through and then you have to file a claim with the life insurance company kind of like the same thing. If you die, there's got to be a death certificate. You've got to put that file in and there's a little bit of a process to to get the death benefit, you know, should something happen to you, but it's a pretty common process, right? Like it's a pretty streamlined process. You just get the information you get the documentation you submit it you file a claim and the insurance company will accelerate you as to the terms of your contract. The amount of money available in your contract is going to vary for on a contract by contract basis. Typically what happens is depending on the type of insurance you have depending on the type of design of the policy that you have you're going to be able to accelerate a portion of the death benefit. And one of the things that you're going to want to look at is after I accelerate and take advantage of this benefit. How much death benefit do I have on the back end of it? What what is going to be left as a death benefit after I take advantage of this you can get paid your your accelerated benefits, whether it's critical chronic or terminal you can get paid those in monthly fashion. You can get lump sums. You can get paid semi-annually you can kind of structure in all these different ways and and ultimately it's kind of like an annuity and winning the lottery you can either get a big lump sum payment or if you take it in smaller chunks typically they'll give you a little bit more in doing it that way. But when we look at the impact that it's going to have on the policyholders and and we think about what are the positives and the negatives or the benefits and the drawbacks of it all I would say I just kind of touched on the drawback the drawback of utilizing your accelerated death benefit riders while you're alive is the fact that it's going to reduce your death benefit, right? So I my advice to people is if living benefits are important to you and you want to have a portion of that covered make sure you have enough life insurance that you're able to utilize some of that while you're alive and you'll in whatever you feel like you're going to want to have access to you'll still have enough death benefit on the back end. Now the benefits are to me very very cut and dry straightforward. You're going to have control of the medical directive of your life. You're going to have control and never be in a situation where should anything medically happen to you. You're going to lose your dignity, right? Like if you need assisted living in home care, if you run into a situation that that you're medically compromised in a lot of these ways and as long as the ways that you qualify, you're going to have the access to the money. You just want to make sure once again that when you access that money if it's important for you to have that it doesn't reduce your death benefit so much that it's going to hurt your legacy on the back the great part about these benefits and nothing like this free is the fact that they are baked into the premium typically the basic premium. They're not riders that you add on on a per rider basis at extra costs. They are actually baked into the premium. But once again, like I said, nothing is free. That's why if you're looking at a premium that might be a hundred dollars a month for the cheapest of the cheap term with no living benefits. Maybe it's a hundred thirty or a hundred forty dollars a month for the term with living benefits, but you have to ask yourself and this is what I did for myself. Is it worth $40 a month extra or $30 a month extra whatever it is and that's all going to have to do with what your health rating is and you got to go through underwriting with the insurance company to figure all that out, but would it be worth a 20 to 40 percent premium increase if I was able to access this money while we're alive and to me, it's an unequivocal. Yes, I'm a hundred percent down to pay a little bit more because when you look at the cost of medical insurance health insurance and and then you compare the cost of having this as part of your life insurance policy to me, it's just a more efficient way to cover many of the similar risks. Now. I'm not saying it replaces it, but I know a lot of people that have high catastrophic high deductible catastrophic health insurance policies, you know that they're like I only have this and I'm paying this this $400 a month with a $10,000 deductible just in case I get cancer. Well, guess what if you have this policy with life insurance and you're diagnosed with this cancer and a terminal cancer now you have access to the death benefit and we're talking pennies on the dollar relatively speaking. So in conclusion, what I would say is I'm a huge believer in living benefits living benefits have changed my family's life my father-in-law still around because of them. It's something that I never really touched on too much before that happened to me in 2020, but if you watch a lot of my content, you'll see that this is something that I touch on all the time now because I think it's one of the most vital parts of the policy and it's one of those things that doesn't matter to you until it actually happens to you until you get impacted by it, but I promise you if you're looking at a policy one of the things that I that I think everybody owes it to themselves to do is if you're selling life insurance, you need to be focusing on the living benefits because it's a huge value add at a very minimal cost compared to what the alternatives are and that's a big question and finance is always compared to what the living benefit cost compared to the alternatives in the market are pennies on the dollar compared to what the alternatives would be. And then if you're somebody who's looking to buy life insurance right now and you're looking to protect your family if you're looking to protect your own life, I really encourage you to dive deeper and you can set up a call with somebody on the life 180 team go down the link of description below set up that call and and just get clarity on what it could look like for you. Hopefully you found value in this video. If you did, please like share subscribe click the button that way you're notified click the bell. I should say that we're notified every time I launch a new video. Hopefully found value in this in understanding how living benefits work. Once again, if you have any questions reach out till next time have a blessed inspirational day. We'll talk soon. See ya.