Managing the cost of chronic illness with the Chronic Illness Rider.
Plan for chronic illness and find peace of mind by enhancing your Group Term Life Insurance.
If you or a member of your family has ever had to care for a loved one with a chronic illness, you understand the toll it can take physically, emotionally, and financially. For many people, planning ahead for long-term needs has become more of a necessity than ever. Here’s where the Chronic Illness Rider can enhance your Group Term Life Insurance and help you and the people you love find peace of mind. Flexible and affordable, the Chronic Illness Rider offers you protection in two ways:
- It helps you manage the expense of a chronic illness and gives you the security and affordability of Group Term Life Insurance. It does so by simply offering a tax-free acceleration of a portion of your Group Term Life Insurance plan's death benefit in the event the insured becomes permanently chronically ill.
- By adding the rider to your plan, you are protected in the event you do need the benefit. And if you don't need it, you still have the death benefit protection.
Because you don’t have to submit receipts or a plan of care for reimbursement, the Chronic Illness Rider gives you the power to use benefits however you like. Benefits can be used at your discretion alone.
Chronic Disease: Learn the facts.
Remember, if you or someone you love is managing an illness that requires extended care, you're not alone. Consider these facts:
According to U.S. News & World Report, approximately 70% of Americans over age 65 will become cognitively impaired or unable to complete dressing, bathing, or eating over their lifetimes.1
Some 9.1 million Americans are expected to have dementia by 2040. The cost of their care is expected to double in 30 years with 75% to 84% of the costs involving long-term needs, reports The New York Times.2
The average time for extended care is 3.7 years for women, and 2.2 years for men, according to Barron’s.3
A one-year stay in a private room in a nursing home averaged approximately $92,000.4 Even if you're young and healthy—with a strong support system and enough money set aside—you can never be sure what the future will hold.
So what’s next?
Check with your group plan administrator to see if your association offers a Chronic Illness Rider that can be added to your Group Term Life Insurance. It's an affordable way to protect your family by enhancing insurance you already have.
NOTE TO CLIENTS
The following disclosure must be added to all Chronic Illness Rider Marketing Materials:
This is a life insurance benefit that also gives you the option to accelerate some of the death benefit in the event that you are certified with a chronic illness as described in the certificate.
IMPORTANT NOTICE: This rider is not intended to be a federally tax-qualified long-term care insurance contract under Internal Revenue Code (IRC) Section 7702B. Therefore, the premiums payable for this rider do not qualify as long-term care insurance premiums and are not deductible from gross income for federal income tax purposes. This rider, however, is subject to the federal per diem limits set forth in IRC Section 7702B. Under this rider, New York Life will not pay claimants more than the federal per diem limits. Assuming the amount you receive in the aggregate from all applicable policies does not exceed the federal per diem limits set forth in IRC Section 7702B, the benefits provided by the Chronic Illness Rider are intended to be excludable from federal gross income under Section 101 (g) of the IRC.
Receipt of an accelerated death benefit may affect eligibility for Medicaid or other government benefits or entitlements and may have income tax consequences. Accelerating benefits before applying for these programs, or while you are receiving government benefits, may affect your initial or continued eligibility. Clients can contact the appropriate social service agency (e.g., the Medicaid Unit of your local Department of Public Welfare or the Social Security Administration Office) for more information.
1Philip Moeller, “Should Long-Term Care Be an Entitlement?” U.S. News & World Report, March 25, 2013.
2Pam Belluck, “Dementia Care Cost Is Projected to Double by 2040,” The New York Times, April 3, 2013.
3Amy Feldman, “Thinking Long Term,” Barron’s, November 11, 2013.
4Emily Mullin and Lisa Esposito, “CareHow to Pay for Nursing Home Costs,” U.S. News & World Report, Nov 16, 2016.