By Cyril Tuohy
Whole life insurance policyholders will be able to access the death benefit of their policies during life to help cover the costs of chronic or terminal illness, American United Life (AUL) said.
“It is difficult, if not impossible, to know when you and your family will need financial protection,” Mark Wilkerson, president of individual life and financial services, said in a news release. “With these riders now added to our whole life policies, our clients will have more freedom and control in these unforeseen situations.”
AUL’s addition of chronic and terminal illness riders will allow a policyholder to accelerate the death benefit in the event of a qualifying illness and access the cash value of the policy to cover medical expenses, receive in-home care, make needed modifications to a home or use for any other purposes, the company said.
Like a death benefit, chronic and terminal illness benefits will be paid income-tax free to the policyholder. Beginning this month, the riders are automatically included with most AUL whole life policies to policyholders.
With the chronic and terminal illness riders, the policyholder decides how much of the death benefit to accelerate, subject to Internal Revenue Service and percentage limits. The amount received results in a lien against the policy – which reduces the benefit amount received by their designated beneficiaries at the time of death.
A policyholder can qualify for accelerated benefits by being unable to perform at least two activities of daily living such as bathing or dressing, suffering a severe cognitive impairment or being certified by a licensed health care practitioner as having an illness that is expected to result in death within 12 months.
"There are already many reasons for clients to be attracted to whole life insurance," Wilkerson stated. “These additional features make our whole life products even more dynamic and relevant in addressing a client's needs."
AUL is a member of OneAmerica Financial Partners, a diversified financial services company.
Cyril Tuohy is a writer living in Pennsylvania. He has covered the financial services industry for more than 15 years. He has also written about food, restaurants and travel. He can be reached at [email protected].
© Entire contents copyright 2013 by InsuranceNewsNet.com, Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.