Critical Illness Insurance Success

Profile:
Name: Emily
Gender: Female
Age: 40
Health: Standard Nonsmoker
Type of Insurance: Indexed Universal Life (IUL) Insurance with Critical Illness Benefit
Iitial Coverage Amount: $250,000
Monthly Premium: $167
Background:
At age 40, Emily fulfilled her dream of starting her own business by taking out a $250,000 loan. To make sure her family and business were protected from the unexpected, she purchased an Indexed Universal Life (IUL) insurance policy with a death benefit matching her loan amount. She also added a Critical Illness Benefit to the policy, and her monthly premium was $167.
The Event:
Eight years later, when Emily was 48, she experienced a stroke that had a severe impact on her health. The stroke was considered a critical illness and doctors informed her that it shortened her life expectancy by 50%. Facing large medical bills and business-related expenses, Emily decided to use the Accelerated Death Benefit (ADB), a feature of her policy, to access some of the money from her death benefit early.
  • What is a Critical Illness? A critical illness includes major health problems like a stroke, heart attack, cancer, and other serious conditions. These illnesses often require expensive treatment and can drastically change a person’s lifestyle and financial situation.
  • What is the Accelerated Death Benefit (ADB)? The Accelerated Death Benefit allows policyholders with serious health conditions to receive part of their life insurance payout while they are still alive. This money can be used for medical expenses, personal needs, or business costs, providing much-needed financial support.
  • How the ADB Helped Emily: Emily chose to access $225,000, the maximum allowed under her policy. She received $42,248 in cash, which helped her cover medical bills and keep her business running while she recovered from the stroke.
What’s Left After Using ADB:
  • Age 48: After using the ADB, Emily’s life insurance coverage was reduced to $25,000.
  • Premiums: Her monthly premium payments were lowered based on the remaining coverage, but she continued to pay for the reduced death benefit.
Key Takeaways:
  • 1. Peace of Mind for Health Crises: By adding the Critical Illness Benefit to her policy, Emily had financial protection during a difficult time when she suffered a stroke.
  • 2. Immediate Financial Help: The Accelerated Death Benefit gave Emily access to cash that helped her handle her medical bills and keep her business on track.
  • 3. Continued Coverage: Although Emily used a large portion of her death benefit early, she still had $25,000 in coverage, and her premiums were adjusted accordingly.

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