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.

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Posted by baldona

Florida

Member since Feb 2016

20543 posts

Posted on 1/20/24 at 7:07 am to slackster

But you still have to pay your premiums to get that death benefit…which, could be $20k a year.

Idk. These conversations are always somewhat ridiculous because the actual premiums are rarely discussed and for most people these VUL and WL premiums are extremely high.

To the point of if you can afford $15k in premiums PER SPOUSE per year, I still don’t see how $200k potential impact has any impact on your financial plans.

ETA: the selling point would be the possible ‘investment’ but the insurance company has to make money so the vast majority of the owners of these policy are not making money. My guess is well under 7% make money

This post was edited on 1/20/24 at 7:22 am

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