Accelerated Benefits Rider National Life Insurance Company

Life Insurance with
Accelerated Benefits
Rider
Products issued by
National Life Insurance Company®
Life Insurance Company of the Southwest™
10%
National Life Group® is a trade name of National Life Insurance Company,
Montpelier, VT, Life Insurance Company of the Southwest (LSW), Addison, TX
and their affiliates. Each company of National Life Group is solely responsible
for its own financial condition and contractual obligations. LSW is not an authorized
insurer in New York and does not conduct insurance business in New York.
Not For Use in Oregon
63501a MK2834(0412) TC65940(0412)
A Common Dilemma
You’re building a good life for yourself and your family. You have accumulated
assets in anticipation of a comfortable lifestyle at retirement. Purchasing
life insurance will help provide a measure of security to your families in the
event of death.
At your death, the income tax-free proceeds provided by life insurance are
paid directly to your beneficiary; free from the costs, delays and publicity of
probate. Additionally, while you are living, some types of life insurance have
the potential to build cash value on a tax-deferred basis. Because the cash
value belongs to you, you are allowed to borrow or withdraw from the policy.1
There are many optional riders available at an additional cost that may
also be added to customize life insurance based on your needs, including
such riders as:
• Waiver of Premium Rider
• Children’s Term Rider
• Other Insured Rider But how do you protect
against an unforeseen
illness?
You don’t want to see all your
hard earned assets jeopardized
by expensive long-term care
costs brought on by a terminal,
chronic or critical illness.
Americans
are living longer.
A higher standard of living and
medical advances have had a
positive effect on mortality.2 But
a terminal, chronic or critical
illness can result in more people
surviving in poor health with an
illness that greatly affects
lifestyle.
So what can you do?
1 Policy loans and withdrawals reduce the policy’s cash value and death benefit
and may result in a taxable event. Surrender charges may reduce the policy’s
cash value in early years.
2 US National Cancer Institute’s Surveillance Epidemiology and End Results
(SEER) Database, revised 2010.
3 Payment of accelerated benefits may reduce the cash value and death benefit
and may result in a taxable event.
Men have a
1 in 2 lifetime risk
of developing cancer
during their lifetime, for
women the risk
is 1 in 3.2
An Uncommon Solution
You can add a rider to your insurance policy that will also protect you while
you are alive from the potential financial impact of a terminal, chronic or
critical illness. We call this life insurance you don’t have to die to use.
Accelerated Benefits Rider (ABR)
ABR is a no-additional cost rider which lets you access your death benefit,
on a discounted basis, should you become terminally, chronically or
critically ill.3 This rider can provide the funds you need to pay any expenses
you incur, allowing you to preserve other assets or investments.
The use of benefits are not restricted and may be used for any expense
including:
• medical expenses
• additional care
• home renovation • business expenses
• travel
ABR proceeds for chronic illness in the state of Massachusetts can only be
used to pay for expenses incurred for Qualified Long-Term Care Services. 4
4 Qualified Long-Term Care Services: The necessary diagnostic, preventative,
therapeutic, curing, treating, mitigating and rehabilitative services, and
maintenance or personal care services that are required by a chronically
ill individual and are provided pursuant to a plan of care prescribed by a
licensed health care practitioner.
Do You Have Living Benefits?
Isaac
Isaac’s doctor has told him he has
less than two years to live. Using the
Terminal Illness rider, he chooses to
access his death benefit to enjoy life to
the fullest during his last two years.5
Sophie
Sophie, at age 79, becomes chronically
ill and enters a nursing home. Her
Chronic Illness rider allows her to help
pay for her nursing home stay and
other medical expenses.5
The cost of
a semi-private room
rose 3.5% in 2010 to
an average of $205 a day
($74,825 per year). The cost of
a private room rose 4.6% to
an average of $229 a day
($83,585 per year)6
5 Payment of accelerated benefits may reduce the cash value and death benefit,
may be a taxable event and may affect eligibility for public assistance programs.
ABR proceeds for chronic illness in the state of Massachusetts can only be used
to pay for expenses incurred for Qualified Long-Term Care Services.
6 US News and World Report, 2010
Nicholas
Nicholas, a husband and father of two,
suffers a severe heart attack at the age
of 54. He is able to use the money
from his Critical Illness rider to cover
his medical expenses, and pay off his
family’s mortgage.5
Barry and Melissa
Barry and Melissa are parents of college
age children. Through policy loans and
withdrawals, they are able to use some
of their policy’s accumulated value to
offset tuition payments.7
Surviving
stroke victims face
an average of
$140,000 in
personal costs
over their
lifetimes.8
Every
45 seconds
someone suffers
a stroke.
7 Policy loans and withdrawals reduce the policy’s cash value and death benefit
and may be a taxable event. Surrender charges may reduce policy cash values
in the early years of the contract.
8 American Heart Association: Heart disease and stroke stats, 2009.
When are Rider Benefits Available?
Terminal Illness – If you are suffering from a terminal illness that will
result in death within 24 months,9 you may elect to accelerate benefits
under the rider.
Chronic Illness – If you are certified chronically ill by a licensed health
care practitioner within the last 12 months, and are unable to perform
without substantial assistance, two out of six Activities of Daily Living
(ADLs) for a period of at least 90 days, you may choose to accelerate
benefits under the rider. The six activities are defined as eating, toileting,
transferring, bathing, dressing and continence.
Critical Illness – If you suffer a critical illness, such as a heart attack,
stroke, a major organ transplant or have been diagnosed with cancer, end
stage renal failure or ALS (Lou Gehrig’s disease) or blindness, your benefits
can be accelerated.
Covered critical illnesses are heart attack (myocardial infarction), stroke,
diagnosis of cancer, diagnosis of end-stage renal failure, major organ transplant, diagnosis of ALS (amyotrophic lateral sclerosis), or blindness (corrected
vision no better than 20/200 in both eyes). Covered Critical illness in the state
of MA 8165MA(0609) includes: Coronary artery disease resulting in acute
infarction vascular or requiring surgery; End-stage Renal Disease; Major organ
transplant; Permanent neurological deficit resulting from cerebral vascular
accident; Diagnosis of an invasive malignancy characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue. Cancer
does not include: Stage A Prostate Cancer, Any skin cancer, except invasive
malignant melanoma into the dermis or deeper, Pre-malignant lesions, benign
tumors, or polyps, and Carcinoma in situ.
Of all
Americans 65 or
older, one-half of the
women and one-third
of the men expect to
spend at least 2.5
years in a nursing
home.7
Waiting Periods
ABR Terminal does not have a waiting period.
ABR Chronic must be in force for two years
before benefits are available.10 ABR Critical
must be in force for 90 days before benefits
are available.
9 Twelve Months CT, NY and PA.
10 There is no waiting period for chronic illness
benefits in NY.
By 2020
12 million older
Americans will
require long-term
care services.
Once you have added the rider, you can
rest assured, knowing you have the benefits
needed to help with the costs associated with
a terminal, chronic or critical illness.
By 2025, it is projected that
the 75+ population will
increase 70%12
• up to $113,150 (2012) per year for chronic illness (indexed annually)
• up to a total lifetime benefit of $1 million for a terminal and chronic illness11
• ABR benefits are intended to qualify for favorable tax treatment
With ABR, you can protect your assets, maintain choice and independence
and help ensure you will have the funds needed to get the care you need
should a terminal, chronic or critical illness strike.
Some restrictions regarding minimum policy size apply.
11 Lifetime benefits for chronic illness in NY are $2,000,000.
12 Senior Care Market Place Statistics, 2010
The Accelerated Benefits Rider (form series 7490/7493/9744/ICC10-8843(0310))
is available on various Whole Life, Universal Life and Indexed Universal Life
policies underwritten by National Life Insurance Company. The Accelerated
Benefits Rider (form series 8052/8095/8165/ICC10-8844(0310) is available on
various universal life and indexed universal life policies underwritten by Life
Insurance Company of the Southwest. Riders are optional and may not be
available on all policies or in all states.
The Accelerated Benefits Rider offered under these riders are intended to qualify
for favorable tax treatment under the Internal Revenue Code of 1986. Whether such
benefits qualify depends on factors such as your life expectancy at the time benefits
are accelerated or whether you use the benefits to pay for necessary long-term care
expenses, such as nursing home care. If the acceleration-of-life-insurance benefits
qualify for favorable tax treatment, the benefits will be excludable from your income
and not subject to federal taxation. Tax laws relating to acceleration-of-life-insurance benefits are complex. You are advised to consult with a qualified tax advisor
about circumstances under which you could receive acceleration-of-life-insurance
benefits excludable from income under federal law. Some restrictions regarding
minimum policy size apply.
Receipt of acceleration-of-life-insurance benefits may affect you, your spouse or your
family’s eligibility for public assistance programs such as medical supplementary
social security income (SSI), and drug assistance programs. You are advised to
consult with a qualified tax advisor and with social service agencies concerning
how receipt of such a payment will affect you, your spouse’s and your family’s
eligibility for public assistance.
We currently limit the amount of death benefit that may be accelerated under all
accelerated benefit riders applying to the same insured to $1,000,000. We reserve
the right to change this limit in the future, however the limit will never be less
than $500,000.
Critical illness is not available in Connecticut and New Jersey. Please see below for
information about the New York version of the Chronic Illness rider.
The ABR Chronic II Accelerated Benefit Rider for Covered Chronic Illness (form 8591NY
(0108), Covered Chronic Illness ABR with Traditional Life (20006NY(0511) is
optional and only available in New York on policies underwritten by National
Life Insurance Company. The maximum amount, over the entire lifetime of the
Insured, that will be accelerated or converted to reduced paid-up insurance under all
contracts made on the life of the Insured is $2,000,000.
Receipt of Accelerated Benefits may be taxable and may affect eligibility for public
assistance programs such as medical assistance (Medicaid), Aid to Families with
Dependent Children, and Supplemental Security Income. Prior to applying for Accelerated Benefits, policy owners should seek assistance from a qualified tax advisor
and consult with the appropriate social services agency concerning how receipt will
affect the eligibility of the recipient and/or the recipient’s spouse or dependents.
This product is a life insurance policy with a rider that accelerates the death benefit
on account of chronic illness and is not a health insurance policy providing long-term
care insurance subject to the minimum requirements of New York Law, does not
qualify for the New York State Long-Term Care Partnership program and is not a
Medicare supplement policy.
National Life Group® is a trade name of National Life Insurance Company,
Montpelier, VT, Life Insurance Company of the Southwest (LSW), Addison, TX
and their affiliates. Each company of National Life Group is solely responsible
for its own financial condition and contractual obligations. LSW is not an authorized
insurer in New York and does not conduct insurance business in New York.
Centralized Mailing Address:
One National Life Drive, Montpelier, VT 05604 | www.NationalLifeGroup.com