What does the rider do? Its just a "cash value" benefit? What I don't understand, is can you not do this same thing with any cash value benefit on a universal or whole life policy? Does that rider allow you access to more money sooner? That would make sense, assuming that's it?

So basically you get a universal life policy that's a little more expensive that allows you to access the death benefit in the form of a cash value if LTC is needed?

So what if you need LTC but then get out due to recovery? Assuming you just pay it back with interest?

2 ...

Report Post

Posted by Shepherd88

Member since Dec 2013

4595 posts

Posted on 1/19/24 at 4:20 pm to baldona

You’re accessing the death benefit, not the cash value for LTC purposes, that’s why it’s considered leverage. If you go off claim you stop drawing from it, there’s nothing owed back you just have a lesser policy now.

This post was edited on 1/19/24 at 4:28 pm

0 ...

Report Post

Posted by slackster

Houston

Member since Mar 2009

85152 posts

Posted on 1/19/24 at 8:19 pm to baldona

quote:
What I don't understand, is can you not do this same thing with any cash value benefit on a universal or whole life policy? Does that rider allow you access to more money sooner? That would make sense, assuming that's it?

The latter.

Ignore the cash value. You pay premiums for a specified death benefit. Let’s assume $200k DB. You will get it when you die, but you can also draw up to 2-4% off the DB until it’s exhausted if you’re unable to perform 2 of 6 activities of daily living (or some other qualification). If you die after drawing down 50% of the DB, they pay out $100k. If you recover after drawing 50% of the DB, you’ll get the $100k when you die later.

It’s no longer use it or lose it LTC coverage. For a price, you can guarantee that someone is getting that $200k tax free - either in benefits under the rider or the final death benefit.

1 ...

Report Post

Money Talk - Replies to Post

Return To Board

Page 1

Return To Board