Living Benefits

Any insurance that pays cash while you are alive is referred to in the financial industry as a “Living Benefit Plan”.

Disability Insurance normally offers up to 60% of regular income tax-free.  It is designed to keep you solvent, but not give you so much that you don’t want to return to work.  Most group plans do not insure 60% of the income for high wage earners or owners because group plans are not meant for large amounts.  Executives and professionals earning an above average income may qualify for special programs for high income earners.  Your ability to earn income is your most valuable asset, it should be insured against loss.

Critical Illness Insurance is a relatively new product.  It pays up to $2,000,000 if you almost die from a life threatening Critical Illness, but survive 30 days.  The money is tax-free and can be used for anything.  Just count the number of people you know who have had cancer, heart problems or a serious illness or condition that has caused them financial pain as well as all the other issues.  This insurance would have helped them, and it can help you if the same situation arises.  A recommended amount of coverage starts with one or two year’s income.  Business owners can create a personal tax advantage by owning this product in their company.

Long Term Care Insurance is also new.  This is the plan you buy because if you don’t die, you might get stuck in a crappy nursing home or living with your children.  This insurance pays a tax-free benefit of up to $2,300/week if you need assistance with two or more essential daily duties.  This coverage is designed so you can live in the style you are accustomed to without fear of running out of money or spending money that you wanted to leave to family or special causes.

For several reasons, there are now far more single seniors than ever before.  More and more of us will be on our own, and solely responsible for our own well-being, no matter how long it lasts.  Care is getting extremely expensive.  This insurance guarantees the money will be there if you need it; which means you can spend more now because you don’t have to keep extra money for home-care.