Riders and Benefits

 Adding Riders and Benefits for future needs

As I have stated before, I really have a lot of admiration for the various insurance companies that are at the forefront of modifying and enhancing their products and portfolios to meet the current and future needs of people.  It’s no longer just about single purpose policies, it’s about working with your client on a plan that will work today and be a building block for their future.

Here’s a quote I found that I believe is appropriate when planning with your clients:

Preparation for old age should begin no later than one’s teens. A life which is empty of purpose until 65 will not suddenly become filled on retirement.-Dwight L. Moody

Planning for these times begins early and with the right steps, makes handling the rough patches in life easier. An ounce of prevention is worth a pound of cure!

Today, more and more products have living and dying benefits, which have changed not only the perception of these products, but the functionality and opportunities for them to benefit their purchasers and beneficiaries.  These products have introduced riders like critical illness, long term care, and chronic illness riders, further providing coverage for unforeseen events in life. What’s great about these riders are many come at no initial or annual cost.

With people living longer, supported by mortality tables indicating life expectancy into the mid 80s, agents have to carefully plan to secure coverage into these years.   For example, while term insurance is a viable solution for short term needs, longer term, make sure it’s convertible to a product that has a guaranteed death benefit and premium structure for example.  Also confirm that any riders will convert as well. Not only do you set yourself up for a future sale via a conversion, but you place your client in a better position long term for their insurance needs as they age.

The best rider we have seen in the past few years is the critical and chronic illness/long term care riders that are available on linked benefit or hybrid life policies. Providing these living benefits for your client under these arrangements allows the client to benefit in life and their beneficiaries in death.   Many of these riders are attached to permanent policies like GUL’s and IUL’s at no initial cost to the client.  What I think makes presenting clients with these no cost riders is that it becomes a “pay to play” scenario.

What I mean is if the client goes on claim for a chronic illness condition, the insurance company at that time will take a percentage of the benefit as a charge for providing the rider. If a client never goes on claim, they paid nothing for this coverage. So only if you “played” via a claim, did you pay for the coverage.   Conversely, never having a claim would have saved the client thousands of dollars in premiums to purchase this coverage elsewhere.

Other features of these riders are that premiums can be waived during a claim period, further benefiting the insured.  Many policies provide an indemnity or cash benefit versus a reimbursement arrangement, thus placing the insured in control of their spending and medical needs.

Lastly, many will provide a residual death benefit in the event someone had to utilize their entire policy’s benefits to treat their condition(s).  

So what is the take away from this?

My advice is to research and secure contracts with carriers that have products with linked benefits/living benefits. People are searching for affordable ways to have coverage for things like long term care later in life. Planning today and utilizing the right products and strategies will help you and your clients come into a soft landing later in life versus a crash landing.

Sadly, more and more of us are affecting or know someone that has a loved one requiring long term medical care. Having the opportunity to remove some or all of the financial burdens can have a positive impact by allowing those affected to place their efforts on improvement and patient care, not the financial viability of the required care.

Contact us today to learn more about the products that contain these riders and benefits and start leveraging your clients insurance dollar to provide more lines of coverage today and in the future.