Hundreds of years ago, the young financial industry invented life insurance to meet an emerging customer demand: The breadwinner of a family – almost always the husband, in those days – wanted to protect his family in the event of his sudden death. Life insurance was a way to provide income to his dependents.
Over the years, as funeral expenses increased, many families began to extend coverage to all members of the family such as the spouse and children. Today we recognize that even a non-working spouse should be covered by life insurance, as the surviving spouse will incur significant childcare and other expenses in their absence.
In recent years, new life insurance needs have emerged. And of course, as with all products, the insurance industry is changing its offerings in order to meet consumer demand. We have learned that people are more likely to survive a major health crisis, thanks to our superior health care system. And yet, surviving that crisis may leave you temporarily or permanently disabled, struggling with large medical bills. If you become unable to work due to this illness or accident, your family is just as financially vulnerable as they would be in the event of your death.
In the past, these situations have led the family to bankruptcy. In slightly better scenarios, loved ones could fall back upon the disabled breadwinner’s retirement fund – until that account was completely drained, leaving them nothing for the future. This is hardly a situation you want to befall your family.
In response to this demand, life insurance companies have introduced the living benefit rider. If your insurance policy includes this rider, you can receive a cash payout of benefits in the event of a major health crisis. This cash can help with medical bills or replace your lost income, and protect your family from foreclosure, bankruptcy, and other financial emergencies.
Does your life insurance policy include a living benefits rider? If you’re relying upon an outdated policy to protect your family, we recommend updating it to a more modern policy which offers better coverage. Call us to schedule an appointment, and we will help you perform a needs analysis, compare different life insurance policies, and select a new one that offers updated protection for your loved ones.
Portions of this article have been excerpted from “Living Benefits Rider” from New York Life.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.
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