Utilizing Life Insurance Benefits While Your Living
Accelerated benefit riders (ABRs) have become increasingly popular in recent years as they provide life insurance policyholders with the option to access a portion of their policy’s death benefit while still alive.
The advantages of ABRs are numerous and can have a significant impact on policyholders and their families.
- Flexibility in managing medical expenses:
ABRs provide a safety net for policyholders who are diagnosed with a terminal illness, chronic or critical illness. If the policyholder is unable to continue working and can’t pay medical expenses, ABRs will provide a lump sum payment to help cover medical bills or other expenses. This can be an invaluable asset, especially for those who need to manage the costs of long-term medical treatment.
- Peace of mind for loved ones:
With an ABR, the policyholder can rest assured that their loved ones can take care of their financial needs. They don’t have to worry about leaving behind a financial burden, as the ABR can provide much-needed financial assistance to their loved ones.
- Financial help during the waiting period:
The waiting period for social security or other disability benefits can be a long one. However, with ABRs, policyholders can access their death benefits far more quickly. This can help those who are waiting for other benefits, as well as those who need immediate financial assistance during times of crisis.
- Help to maintain independence:
Maintaining independence is important to many people. ABRs help to preserve the policyholder’s financial independence during times of hardship. Instead of depending on their loved ones for financial assistance, policyholders can use the ABR payment to maintain their independence and dignity.
- The ability to use the funds as desired:
ABRs provide policyholders with the flexibility to use the lump sum payment as they see fit. For example, they can use the money to pay for medical treatments, cover other expenses, or provide additional support for their loved ones.
- Tax advantages:
In addition to providing financial security and greater choice in terms of healthcare options, ABRs can also offer tax advantages. Because the funds received from an ABR are typically considered accelerated death benefits, they are generally tax-free. This can help policyholders avoid taxes on the funds they receive, potentially saving them thousands of dollars in taxes.
Overall, ABRs provide a valuable way for policyholders to protect themselves and their families from the financial burden of a serious illness or disability.
They provide a safety net for those diagnosed with critical illness, offer peace of mind for loved ones, help to bridge the gap between waiting for disability benefits, maintain independence, and provide flexibility in how the funds can be used. It’s worth considering ABRs when purchasing a life insurance policy to get the most out of your coverage.