Experience & Vision

Many policies contain a provision that allows a terminally ill person to collect a significant portion of his or her policy’s death benefit while still alive. The money can be used to get family finances in order, pay for uncovered medical expenses, or simply do certain things for your family or friends while you still can. It’s important to note that the amount taken out while still living is subtracted from the death benefit payments your beneficiaries receive, along with an interest charge for early payment of benefits.

• Always name a contingent, or secondary, beneficiary just in case you outlive your first beneficiary.

• Select a specific beneficiary rather than having the proceeds of your life insurance paid to your estate. One of the great advantages of life insurance is that it can be paid to your family immediately. If it is payable to your estate, however, it will have to go through probate with the rest of your assets.

• Be very specific in wording beneficiary designations. Saying “wife of the insured” could result in an ex-spouse getting the proceeds. Naming specific children may exclude those born later. If your child dies before you, do you want the proceeds to go to that child’s children? Changing the beneficiary designation is easy, but you have to remember to do it.

Due to the various issues involved, an agent can be an excellent source of information to help you properly set up your beneficiary designation.

Think twice before you do, because in many situations it may not be to your advantage. Before dropping any in-force policy, consider:

• If your health status has changed over the years, you may no longer be insurable at standard rates.

• Your present policy may have a lower premium rate than is required on a new policy of the same type, if only because you’re older.

• If you replace one cash-value policy with another, the cash value of the new policy may be relatively small for several years and may never be as large as that of the original one.

• You will be subject to a new contestability period.

You should ask insurance agents for a detailed listing of cost breakdowns of both policies, including premiums, cash-surrender value, and death benefits. Compare these along with the features offered by both policies. If you decide to surrender or reduce the value of the policy you now own and replace it with other insurance, be sure that:

• The agent making the proposal puts it in writing.

• You pass any required medical examination.

• Your new policy is in force before you cancel the old one.

If you miss a premium payment, you typically have up to a 31-day grace period during which you can pay the premium with no interest charged. If you own a term policy and fail to pay your premium within the grace period, your insurance company will typically terminate the policy. If you own a permanent policy and fail to pay your premium within the grace period, your insurance company, with your authorization, can draw from your policy’s cash value to keep the policy in force. In some flexible-premium policies, premiums may be reduced or skipped as long as sufficient cash values remain in the policy. However, this will result in lower cash values and a shortened coverage period.

Whether you should consider adding a rider to a policy you’re considering really depends on your specific needs, objectives and budget. Here are a few riders that you at least should take a close look at and consider.

A disability waiver of premium rider stipulates that if you become totally disabled for a specified period of time, you don’t have to pay premiums for the duration of the disability. Why might you want to consider such a provision? Disabling illnesses and injuries are much more common than you realize. If you become disabled and your income declines or disappears for a period of time, a disability waiver of premium can ensure that your life insurance policy will remain in force.

An accidental death benefit is another common rider. It will pay an additional benefit in the case of a death resulting from an accident.

Many companies offer accelerated death benefits, also known as living benefits. This type of rider allows you, under certain circumstances, to receive the proceeds of your life insurance policy before you die. Such circumstances include terminal or catastrophic illness, the need for long-term care, or confinement to a nursing home. Ask your agent for information about these and other policy riders.

Doctors, hospitals, facilities (such as labs) and other professionals who give health care services may have a contract with us. If they do, they’re in our network – also called in-network providers. That means they’ve shown they provide quality care and they accept our payment rates when our members go to them for care. If they don’t have a contract with us, they’re outside of our network – or out of network providers.