Dear Toni:

A few months ago, you wrote about other options for long term care.  You mentioned life insurance with living benefits and this confuses me because I thought all life insurance was the same.  I thought there was only term and whole life.

How does this new type of life insurance help one with a long term care issue?  Currently, my mother has been diagnosed with Alzheimer’s and at 82, this is early stages and the illness can last for years.  Would she be able to apply for one of these new living benefit policies?  Thank you for all you do to help us understand these complicated Medicare issues…Sally from Kingwood.


Hello Sally:

With 10,000 Baby Boomers turning 65 everyday for the next 15+ years, the insurance industry has designed new products for those concerned about long term care issues, but do not want to spend their hard earned retirement dollars on a long term care policy they may never use.  And so life insurance with living benefits was born.

Life insurance with livings benefits is a life insurance or annuity policy with accelerated benefit riders such as terminal, critical or chronic illness benefits or has death benefits (tax free).  Many insurance companies are offering these benefits because people want protection for a long term care need and if they never have that need they have coverage for death benefits.

Benefit riders include:

  • Terminal Illness Rider: Insured has an illness or condition that is expected to result in death within 24 months or less.
  • Chronic Illness Rider:  Eligible insured is unable to perform 2 of the 6 activities of daily living (ADLs) or required constant supervision to protect from threats to health or safety due to severe cognitive impairment.
  • Critical Illness Rider: Specific critical illness such as heart attack, stroke, invasive cancer and many more critical illnesses.

The face amount of the policy determines what the living benefits are based on and the severity of the condition will determine the percentage paid. Accelerated benefit riders are not a long term care policy.

            To qualify for a life policy with living benefits, one must answer health question and meet underwriting requirements. Many want to wait to qualify because they do not see the need while they are healthy, but then, Christopher Reeves didn’t think he would fall off a horse which changed his life forever.

I do not believe that your mother will qualify for a policy because she will not pass the underwriting.  Usually having Alzheimer’s is a kick out question. This is why you should plan early.

Recently, my husband Jim has been diagnosed with throat cancer and because he qualified to a life policy with living benefits over a year ago, he can now make a critical illness claim.  With him receiving radiation everyday for 6 weeks, he can make a claim because he will be unable to work.  If his cancer turns for the worse, he can receive up to 90% of the face amount.

Different life insurance companies have different face amounts for their living benefits riders with maximum amounts to make a claim. There are various types of living benefits with different insurance companies.

Living benefits are becoming the new way for various long term care issues.

Toni King, author of the Medicare Survival Guide® is on sales at    Email questions to


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