Many individuals have declined to purchase long-term care insurance, mostly out of fear of spending money on a situation that never occurs. As a result, some life insurance companies have offered variations on traditional life insurance policies in order to induce consumers to purchase some degree of long-term care funding. Accelerated death benefits (ADBs) are a feature of some life insurance policies, which allows you to use some of the policy’s death benefit prior to death, as a sort of cash advance. These benefits often come at an additional premium, but may be an automatic provision in some policies. By using these accelerated death benefits, either alone or in conjunction with other life insurance-related products, you may be able to fund the steadily rising costs of long-term care, either for yourself or for a loved one.
There are different types of ABDs that are available in different situations. For instance, ABDs may cover one or more of the following situations:
- Terminal illness
- Life-threatening diagnosis
- Need for long-term care for an extended period of time
- Permanent confinement to a nursing home due to an inability to perform the activities of daily living, such as bathing, dressing, or brushing one’s teeth
Many ADB policies that cover long-term care services are capped at 50% of the policy’s death benefit. Some policies, however, will allow you to lose the entire amount of the death benefit. Most policies allow you to use two percent of the face value of the life insurance on a monthly basis. If home care is needed and is covered by the policy, then the monthly limit is typically one-half of that amount. Whatever the amount of ADB that you receive from your life insurance policy, that amount is subtracted from the amount that the policy will pay out to your beneficiaries upon your death.
There are some important considerations to take into account, however, in deciding whether to purchase a life insurance policy with ADBs. For example, qualifying for a policy with ADBs may not require you to undergo health screenings, such as might be required if you attempted to purchase long-term care insurance. Thus, if you have a health condition that might prohibit you from qualifying for long-term care insurance, then an ADB policy may be your best option. On the other hand, ADB policies often are much more limited than the services that are typically covered by long-term care insurance. Additionally, the face value of your life insurance policy may be too low to sufficiently provide for your long-term care needs. If this is the case, then you may need additional coverage or another source from which to fund long-term care.
Unfortunately, long-term care also can result in problems that may lead to serious injuries or even death, in some cases. If you have lost a loved one as a result of any type of abuse or neglect while he or she was residing in a nursing home or residential facility, you may be entitled to compensation. This inquiry involves determining which party or entity was at fault for the accident, acted negligently, or otherwise caused the conditions that led to your loved one’s death. At Boller & Vaughan, our Madison elder abuse lawyers can help you with these determinations, and support you through any wrongful death claims that you may have.