Life Insurance Veteran’s Book Spells Out Living Benefits

By David Dankwa

InsuranceNewsNet

Richard Drazien thought he knew life insurance after 50 years in and around the business. But it wasn't until a few years ago that he learned about a company selling a product that allowed policyholders to access a portion of the death benefit while alive, at no extra cost.

Drazien had worked many years as managing director of life insurance benefits at the Florida Medical Association – an organization with nearly 30,000 physician members – and had not once heard about the concept of 'living benefits' life insurance. Prior to that he worked in life insurance sales and agent training for more than 30 years.

“My basic reaction was ‘You’ve got to be kidding, right. This exists?’” said Drazien, who recently published a book titled "No One Ever Told Me: Your Guide to Living Benefits."

“Somebody actually got an insurance carrier to allow people to access the face amount of a policy when they haven’t died or [are] not about to die? That’s amazing,” he told InsuranceNewsNet.

The product that Drazien had learned of is sold by the Alliance Group, a Florida-based, independent marketing organization that pioneered the concept of life benefits about 15 years ago. Last year, the company did $20 million in business, according to Drazien.

It’s a lot of money for a small IMO, especially one in a business that not many people know about. The product Alliance sells, which Drazien has dubbed living benefits life insurance, is underwritten by only a handful of insurance carriers. They include Life Insurance Co. of the Southwest, which is part of National Life Group; Western Reserve Life, and more recently Transamerica.

Here’s how it works. An insured with a $500,000 term insurance policy suffers a heart attack, stroke or is diagnosed with cancer. He or she may or may not have health insurance.

“If they don’t have health insurance, they can’t afford to pay for the treatment so they are stuck. If they do have health insurance the treatment may be so expensive or just not completely covered by the health insurance carrier and so they are stuck again,” said the author.

Where can they go to get the money? Under the living benefits solution, you simply call your agent and ask to cash out some of the death benefit. “The insurer will let you access it even if you are not going to die. There is no term-limit provision where you have to prove to you are going to die in a year or two. In fact, we actually hope you survive, and we will let you access he cash amount based on your age, how long the policy has been in force, severity, etc.,” said Drazien, who retired in 2006 but now works as a communications consultant for the Alliance Group.

In his book, Drazien provides real examples of families who have benefited from living benefits. He also cites some frightening statistics: For instance, a severe heart attack could result in $1 million in direct and indirect costs. Also, 62% of bankruptcies are due to critical illnesses, and 75% of those who filed for bankruptcy had a health insurance policy.

“No One Ever Told Me,” he says, is his attempt to blow the whistle on one of the best kept secrets in the life insurance business. The 50-page book tells emphasizes the importance of obtaining living benefits coverage and encourages agents to learn about the product.

“I don’t know of anybody who I’ve ever talked to about this who has said ‘I’d rather have a contract that did not allow me to do that if I felt it was important for me to survive.’ The premise being, if you believe in your doctor, you get the treatment you need, you actually may live and have a quality of life and isn't that the whole purpose of having insurance.”

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