Great news! John Hancock has expanded their living-benefit offerings to include an Accelerated Death Benefit for Chronic Illness rider — giving clients “just in case” protection should they become chronically ill by providing early access to their death benefit on a tax favored basis.
This rider does not have a monthly rider charge, so including it will not have an impact on the policy’s cash value. Instead, the benefit payment will be reduced by charges associated with early payment of a portion of the death benefit.
Here’s what you need to know:
- Allows partial acceleration of 75% of the death benefit, up to $1M if the insured requires assistance with 2 activities of daily living for a period of at least 90 days or supervision due to a cognitive impairment.
- Satisfies a 90-calendar day elimination period.
- May request accelerated benefit payments once every 12 months while chronically ill.
- Rider charge applies when benefits are accelerated and will be deducted from the chronic illness accelerated benefit payment.
- Intended to qualify for favorable tax treatment under IRC section 101(g).
- Available to applicants ages 18-85, up to a maximum 200% rating or a $5 flat extra.
- Must be elected at issue.
For clients concerned about long-term care, John Hancock’s LTC rider remains one of the strongest solutions on the market. This Chronic Illness rider provides some protection for clients who are not currently focused on LTC planning.