Good Life Insurance

A number of carriers are offering and/or deferring the maturity of a critical illness insurance policy beyond age 100. There are two methods that are used- the Death Benefit Guarantee and the No-Lapse Guarantee. With either method, carriers may charge nothing, expense costs only, or expense charges plus cost of insurance. At this time, there are no actually calculated Cost of Insurance charges for ages greater than 100.

With secondary guarantee-supported critical illness insurance, the few carriers that offer the death benefit extension, as opposed to the cash value extension, provide an enormous consumer benefit. In the case of our 4 -year old male again, his $12,607 premium purchased $1 million of critical illness benefit with cash values in the guaranteed column that zero out, at age 71. Cash value at age 100 is obviously still zero. A number of carriers provide a death benefit extension, though, which supports the death benefit until death actually occurs.

No-Lapse Guarantee clause – under a typical clause; the policy would be guaranteed to stay in-force for a number of years, as long as you have paid at least as much as the required premiums. This is called a no-lapse guarantee. Even though it contains the no-lapse guarantee, this policy may provide non-forfeiture benefits (such as cash surrender values) which are less than those that would be provided if the no-lapse guarantee were issued as a separate policy (for example, as a term policy). However, the premiums for the term policy might be higher than those for the no-lapse guarantee in this policy. When considering the purchase of this policy, you should consider the value to you of higher non-forfeiture benefits versus the level of the premiums required to keep your insurance coverage in-force.

Death Benefit Guarantee – This is a guarantee that the policy will remain in effect, provided you pay sufficient premiums and you do not take loans. This guarantee will depend on such factors as the amount and timing of premiums paid and withdrawals taken, and changes made to the critical illness policy.