While most people insure against death, rarely is the option presented to them to insure against life. Sounds illogical, I know, but life insurance policies can actually be used before you die if you are diagnosed with terminal illnesses. There are two main types of life insurance riders; terminal illness and living benefits.
The goal of a terminal illness rider is to protect families against financial losses stemming from lost wages and medical expenses. As with any contract, there are some specific criteria that must be met such as:
- You must be diagnosed with a covered condition.
- You must have less than, or equal to, 12 months to live.
- Your death benefit will be decreased by the amount you choose to accelerate.
While very similar, a living benefits rider takes on different characteristics and fits insured people with chronic illnesses that may span much further than 12 months. A huge advantage to this type of rider is that it can be added to most life policies without premium increases and can take the place of long-term care insurance policies. Tenured insurance expert, Matthew Claassen launched his company Shield Insurance Solutions to address his growing concern for families facing severe financial stress due to major medical expenses. He specializes in helping families face situations like the following:
"My Husband, Kyle - age 42, was recently diagnosed with Stage 2A Hodgkins Lymphoma, both in his right clavicle and in his media sternum. My Husband is employed at Jim Smith Boats in Stuart, Florida as the head marine electrician. Unfortunately, his job entails hard labor and working with chemicals. He is beginning chemotherapy on May 8, 2014, and as a result, he will be unable to return to his current employment position and our family will be losing a major portion of our income. Our son is in his Junior year of high school. He is applying for early term to Flagler College, St. Augustine, Florida, to double major in Philosophy/Religion and English. His sights are set on becoming a Professor. That being said, in addition to our son's education being a priority, we are now faced with Kyle's cancer, mounting medical bills and loss of wages." -Erica Chaplow Foerch http://www.gofundme.com/2aq524
The family illustrated above has turned to crowdfunding as their financial answer, but Mr. Claassen is confident a life insurance company would have handed them a check had they planned for the unexpected. The statistics are startling: Three out of every four people over the age of 40 will experience a critical or chronic illness in their lifetime, and face financial hardship as a result. In fact, most bankruptcies in the United States occur within one year of a serious medical event where the insured was covered by healthcare insurance. It is my trained opinion that humans take for granted there ability to earn incomes. Death is not the biggest threat to making a living, disability is. Are you covered?