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
Form of insurance that insurance companies buy for their own protection, "a sharing of insurance." An insurer (the reinsured) reduces its possible maximum loss on either an individual risk ...
Table charting relative costs of a group of cash value life insurance policies derived by using the net cost method of comparing costs (traditional net cost method of comparing costs; net ...
Rule concerning stock sold and then repurchased or a similar security repurchased (warrants or options) within 30 full days before or after the day of the sale. Losses established from such ...
Employee's right to transfer pension benefit credits from a former employer to a current employer. ...
Same as term Corridor Deductible: type of major medical deductible amount that acts as a corridor between benefits under a basic health insurance plan and benefits under a major medical ...
Group that advises on employee benefit plans as to amount of benefits to be paid, how benefits are to be financed, and how employees are to qualify for benefits (vesting requirements). An ...
Analytical procedure to predict the failure rate of a system still in the design stage. ...
Provision commonly found in fire insurance contracts. If the insured knows that a hazard is increased, most property contracts permit the insurance company to suspend or terminate coverage. ...
Total limit on the amount of coverage an insurer will underwrite on an individual risk. The amount underwritten includes the amount to be ceded through a reinsurance agreement. ...
Have a question or comment?
We're here to help.