Life Insurance Selling - January 2011

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“Here’s where the Chronic Illness
Benefit has its greatest impact —
to protect the family’s assets and,
more importantly, extend care
for the insured.”

$91,250 per calendar year — less than the IRS per diem amount and less than 24% of the $1,000,000 life insurance death benefit at the time of claim.

• Benefit to be paid systematically on a monthly basis ($7,604.16 per month).

• He has met the waiting period and has been certified by a licensed practitioner for the severe cognitive impairment.

• At this point, he has no other long-term care or government assistance available.

no-lapse guarantee can also be adjusted downward to reflect the insured’s lower projected life expectancy.

This is just one example. Each individual’s situation should be carefully considered prior to making a claim for accelerated benefits. For no-lapse guaranteed policies that typically have little cash value to borrow or withdraw from without terminating the no-lapse guarantee, Accelerated Benefit riders can become even more important as living benefits or safety-net protection and peace of mind.

• Guaranteed Issue
• Up to $50,000+
Monthly Bene;t
• In Addition to
Underlying Group
Plan
• List Billing
• Up to Age 65

Prior to 1st Monthly Claim
After 1st Claim

Policy Value

$130,512

$128,928

Surrender Value

$122,873

$121,381

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Death Benefit

$1,000,000

$987,861

The Accelerated Benefit can provide the $91,250 the family needs for another six and a half years, assuming there are no increases in cost.

Notice that there is a proportional reduction in the death benefit and cash value as a result of the early payment of the death benefit. The adjustment reflects the loss of mortality and other policy charges and interest on early payment at a current rate of 5.75%. As a result of the lower death benefit, the ongoing no-lapse guaranteed premium is also reduced and needs to be paid, but the duration of the

Thomas E. Daley, CLU, ChFC, is regional director for the Penn Mutual Life Insurance Company’s New Jersey Metro Region of the Independence Financial Network.

He is a past president and a current board member of the South Jersey Chapter of the Society of Financial Service Professionals and a membership committee representative for the Association for Advanced Life Underwriting. His office is located in Mt. Laurel, N.J., and he can be reached at (856) 234-7366 or daley. tom@pmlmail.com.