Living Death Benefits
Definition of "Living death benefits"
Early payout of anticipated death benefits from a rider attached to an existing policy or from a separate policy. The purpose is to allow the terminally ill insured an additional source of finance to pay medical bills and/or nice-to-have items. There are basically two methods for paying out these benefits: the policy-holder gains access to the benefits when the policyholder contracts an illness that has been diagnosed as terminal with a life expectancy usually of less than two years; the policyholder gains access to the benefits when the policyholder is confined to a nursing home or a long-term care facility and can be expected to remain in this facility until death. Generally, as long as the policyholder is expected to die within 12 months of the date of the payment of the living death benefit, and that benefit is discounted only by an amount that is consistent with a life expectancy no greater than one year in duration, the beneficiary (s) is not taxed on the life insurance proceeds.
Popular Insurance Terms
Donation of amount "A," made by donor X to a charity. The charity agrees to pay donor X an amount ("B") for the rest of donor X's life. Since the donation is used to fund an annuity, only a ...
Technique used by insurance companies in the purchasing of debt obligations of corporations as a means to: (1) avoid the uncertainties of the market; (2) replace market negotiations with ...
Insurance policy that pays a face amount/ lump sum if the insured is diagnosed with a specified critical illness. This sum is paid directly to the insured regardless of any other sources of ...
Gain when the underlying asset that moves in one direction is significantly different from the loss when the underlying asset moves in the opposite direction; for example, when gains and ...
Methods by which a home office underwriter chooses applicants that an insurer will accept. The underwriter's job is to spread the costs equitably among members of the group to be insured. ...
Reinsurance clause that stipulates that the reinsurer will be subject to the same fate as the ceding company. ...
Provision found in juvenile insurance that waives the premiums due on the insured child's policy provided that the payor of the premiums becomes totally disabled or dies before the child ...
Same as term Participating Insurance: policy that pays a dividend to its owner. ...
Basic requirements of an employee benefit insurance plan such as minimum age and years of service with an employer. ...
Have a question or comment?
We're here to help.