By Cyril Tuohy
Colonial Life & Accident has tweaked its Whole Life 1000 insurance product by raising the plan’s cash value to comply with changing interest rate regulations beginning 2014, and has also amended some benefits to the plan, the company announced.
Among the benefits changes is the ability for employees to buy $300,000 in coverage, up from a maximum $100,000 in coverage, the company said.
Employers with 50 or more employees can offer the coverage without employees having to answer any questions about their health, a method known as “simplified issue.”
Steven Johnson, assistant vice president of product development at Colonial Life, said whole life is an “important part of employee benefits plans for today’s workers and their families.”
“Whole life insurance, which features guaranteed stable premiums and builds cash value, does more than just cover final expenses,” Johnson said in a news release. “It can be used to provide for a family’s loss of income, mortgage costs and educational needs.”
Another change comes in the form of the accelerated death benefit. The policy change advances as much as 50 percent of the death benefit toward medical expenses to policyholders with terminal illness and a life expectancy of less than a year.
The death benefit on the existing Whole Life 1000 plan allowed for policyholders to receive an advance of up to 75 percent of the policy’s death benefit, or up to $150,000 for a terminal illness with life expectancy of less than a year, the company said.
An immediate partial claims payment of $3,000 to the beneficiary remains intact, as do optional term riders for spouses and children.
Whole Life 1000, offered through payroll deductions and individual-pay group accounts, is designed to supplement an employer’s group term life program. Whole Life 1000 provides portable, permanent life insurance for employees, and the policies are issued based on an employee’s eligibility regardless of how many employees apply.
Whole life insurance guarantees stable premiums throughout the life of the contract and the policy builds cash value, tax deferred.
Colonial Life, based in Columbia, S.C., is a subsidiary of Unum Corp.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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