Within Ameritas’ Life insurance contracts, they have a built-in provision called the Accelerated Benefit Rider. This built-in rider provides an opportunity for you to use some of the death benefit while you are still alive. It is not a long term care policy.
How it Works:
If you are consequently diagnosed with a terminal illness, you can get the lesser of 50% of the death benefit, up to a $250k maximum. Ameritas defines a terminal illness as a condition that a physician certifies will reasonably be expected to result in death in 24 months or less.
If you needed to access these funds, payment of the accelerated benefit will decrease the death benefit proceeds by the following:
The amount of the accelerated benefit paid; plus
Any premiums paid by Ameritas; plus
Interest, as defined in the rider, on the amount of accelerated benefit and premiums paid by Ameritas; plus
Any administrative fee.
Note: The acceleration-of-life insurance benefits offered under this rider are intended to qualify for favorable tax treatment under the Internal Revenue Code of 1986. If the acceleration-of-life insurance benefits qualify for such 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.
As an example, let’s say that you have a terminal illness diagnosis. Let’s also say that you are aware of some experimental treatment that is being tested in Brazil; it is quite expensive treatment but may give you a better chance of survival. Even though this new drug or immunotherapy has shown great promise, it is not FDA approved here in the USA; regardless, you decide to go to Brazil for the treatment to try and save your life. You can imagine the expenses of that trip; this rider will let you access some of your death benefit (up to the limits mentioned above) while you are still alive. (Incidentally you do not have to spend these funds on anything medical at all, it’s your money and free for you to use anyway you see fit, after all, it is your money.
To learn more about this built-in provision and how it could help you at a time when you need it most, please contact us today.
