Mutual of Omaha automatically issues a Chronic Illness Rider on all Income Advantage and Lifetime Protection Advantage IULs, no additional underwriting required.
If your client doesn’t qualify for the Long-Term Care Rider, we still issue the policy with the Chronic Illness Rider – at no additional cost and with no additional underwriting. With the Chronic Illness Rider, if your clients are chronically ill (can’t perform two of six activities of daily living) or have severe cognitive impairment, they can accelerate a portion of the death benefit early. This can provide funds for your clients to pay for long-term care expenses – or for whatever else they choose. By having these funds, clients can avoid spending down personal assets to pay for their long-term care services.
Chronic Illness Rider – What You Should Know:
- Benefits are available as a lump-sum payout, up to the IRS per diem limit
- Accelerated benefits can be taken once every 12 months
- No upfront cost – an actuarial discount and flat $100 fee are charged only if your client uses the benefit
- Maximum cumulative chronic illness benefit is up to 80 percent of the policy face amount at the time of the first acceleration request (with a maximum of $1 million)
What is the Actuarial Discount?
When insurance companies price the cost of life insurance, they plan on the beneficiary receiving the full death benefit upon the insured’s death. Since the insured is taking a portion of his or her death benefit early, the client is getting an advance payment. The actuarial discount is based on the insured’s life expectancy and the Moody’s Corporate Bond Yield average, and it’s our way of taking into account the time value of money between the advance payment date and the insured’s actual life expectancy (when the insured is expected to die). The shorter your client’s remaining life expectancy, the less his or her actuarial discount will be.