I like the idea of a critical illness insurance policy that will pay me cash if I have a heart attack, stroke, cancer, etc. What I don’t like is having to fork out more money for one more type of insurance.
This is no longer an issue since a handful of term life insurance companies are now offering critical illness insurance and chronic illness benefits on their term life insurance policies.
We feel Columbus Life has the best term insurance products that are offering these critical illness insurance and chronic illness “living benefits” right now. Below is a comparison of Columbus Life’s advantages over the competition.
In the chart above, ADBR stands for Accelerated Death Benefit Riders which include terminal illness, chronic illness and critical illness also called specified medical. These are also called Living Benefits.
Of the term companies that offer ADBR’s or living benefits, Columbus Life is the only one that offers a lump sum payment and a predictable benefit without charging you an additional up front fee.
Columbus Life’s predictable benefit will payout as follows:
- For Terminal Illness will pay out the lesser of $250,000 or 60% of the policy’s death benefit.
- For Chronic Illness will pay out the lesser of $250,000 or 40% of the policy’s death benefit.
- For Specified Medical or critical illness will pay out the lesser of $25,000 or 10% of the policy’s death benefit.
AGLA’s regular term life policy does not offer a predictable benefit for chronic or critical illnesses as you’d have to go through underwriting at the time of a claim to determine the amount of money they’ll offer. But you can pay an extra premium up front to get up to a 15% predictable benefit (that is up to 15% of the total life insurance amount).
Based on the quotes I’ve seen, I think AGLA’s up front charge is too high for something that may or may not ever get used. AGLA is definitely a “player” though in the term life insurance with critical and chronic illness benefits market.
I personally would prefer to pay no additional charge up front since there’s never any guarantee that I’ll use the “living benefits”. So why pay more money initially for a “just in case” scenario?
I like Columbus Life’s term with critical and chronic illness benefits better than the other companies that offer it because of the low cost of their term insurance and the extent of the benefits they offer.
The only negative about Columbus Life’s plan is that if you do take cash from your policy, they will charge interest if you do take money from your policy after a chronic or critical illness. As of right now, they are charging an 8% interest rate which can also just be deducted from the life insurance amount that your beneficiary would ultimately receive upon your death.
You do not have to actually make an interest payment to Columbus Life each year after a claim, but the ultimate death benefit that your beneficiary receives will be reduced by the amount of money you take after a claim including interest.
So to access money from your term policy for a critical or chronic illness, you’ll have to either pay more money up front or pay interest on the back end after a claim is paid. You should consider these 2 options before applying.
You may feel it’s worth paying more up front to get a predictable critical or chronic illness benefit later rather than paying interest after a claim. We can also offer you insurance from AGLA and all of the other companies that offer living benefits if this is the case.
Columbus Life’s 3 living benefits include:
- For specified critical illnesses such as first heart attack, first coronary angioplasty, first coronary bypass, stroke, life threatening cancer, end stage kidney failure, major organ transplant or for an AIDS diagnosis.
- For Chronic illnesses for which you are no longer able to do 2 out of the 6 activities of daily living which are eating, bathing, continence, dressing, toileting or transferring or if you require substantial supervision due to severe cognitive impairment.
- For terminal illnesses. Many term carriers offer this living benefit for terminal illnesses nowadays.
If you think you’ll never have a critical or chronic illness, think again, and check out these stats:
- There were over 1.6 million new cancer cases, 715,000 new heart attack cases and 795,000 new stroke cases in the U.S. last year alone.
- Many people are unable to work for a long period of time after one of these ailments. 32 months is the average for one long term disability absence.
- Medical problems were a cause of 50% of foreclosures and 62% of all bankruptcies.
So being able to get both cash from a life insurance policy while you’re still living or for your beneficiary at death makes these new term life insurance policies extremely valuable!!!
Gone are the days where you have to die to get money from your term life insurance!
These new term plans with living benefits also prevent you from having to buy two separate policies, one for critical illness and another for life insurance.
But these policies with the living benefits are a lot more expensive than regular term life, right?
They’re not much more expensive. Check out the absolute lowest rates below compared to the Columbus Life rates with living benefits. These are monthly rates at various ages and are all for $250,000 of 20 year term and assume that you’re a non-tobacco user and in good health:
Male Age Lowest Rate Columbus Life Rate
40 $18.29 $23.80
50 $43.47 $45.69
60 $112.66 $141.53
65 $208.78 $225.68
Female Age Lowest Rate Columbus Life Rate
40 $15.79 $19.76
50 $32.38 $34.64
60 $77.44 $88.19
65 $128.92 $145.35
So as you can see from above, the difference in cost of the absolute lowest term rates currently available compared to the Columbus Life rates that include the critical and chronic illness benefits is insignificant at the lower ages. The spread gets a little larger at the higher ages, because this is when you’d more likely suffer from a chronic or critical illness.
If you were diagnosed with diabetes over the age of about 45, your diabetes is well controlled and your overall health is pretty good otherwise, than you should be able to qualify for a policy with living benefits. We’ve had really well controlled diabetics diagnosed prior to age 45 qualify for policies with living benefits, but the younger your age of diagnosis and the longer you’ve had diabetes, the tougher it will be for you to qualify for a policy with living benefits.
If you’ve had a one vessel stent placed in a coronary artery at about age 55 or older, with no heart attack prior and relatively good health otherwise, than you may also be able to qualify for a policy with living benefits. If you have more extensive coronary artery disease with 2 or more stents or that required a double, triple, quadruple bypass then you probably won’t be able to qualify for a policy with living benefits.
To qualify for a policy with living benefits if you’re overweight and your health is good otherwise, below is a chart that shows the approximate weight you’ll have to weigh less than to qualify for a decent rate with living benefits:
5’ 0” tall- 217 pounds
5’ 1” tall- 224 pounds
5’ 2” tall- 232 pounds
5’ 3” tall- 239 pounds
5’ 4” tall- 247 pounds
5’ 5” tall- 255 pounds
5’ 6” tall- 263 pounds
5’ 7” tall- 271 pounds
5’ 8” tall- 279 pounds
5’ 9” tall- 287 pounds
5’10” tall- 296 pounds
5’11” tall- 304 pounds
6’ 0” tall- 313 pounds
6’ 1” tall- 322 pounds
6’ 2” tall- 331 pounds
6’ 3” tall- 340 pounds
6’ 4” tall- 349 pounds
6’ 5” tall- 358 pounds
6’ 6” tall- 367 pounds
I’ve spoken to underwriters at Columbus Life and other companies that offer living benefits and the guidelines that these companies use to determine what rate they’ll offer you or if you can or cannot qualify for a policy with living benefits are not always in “black and white”.
What I mean is that if you may be a couple pounds over the maximum allowable weights above, but everything else checks out as really good (i.e. your cholesterol, blood pressure, blood sugar, etc) then you may still be able to qualify for a policy with living benefits.
Or if you have 1 stent placed at age 51, for example, and all of your other coronary arteries showed no evidence of blockage based on the cardiac catheterization report and your health is good otherwise, then you still may qualify for a policy with living benefits.
We really need to shop each case when there is a preexisting health issue with Columbus Life and the other companies that offer living benefits to determine which may be best.
There are other term carriers that offer living benefits and that are more liberal for people with preexisting health issues than Columbus Life, so there may still be life insurance with critical and chronic illness riders available to you if you have some more serious health issues or if your weight is higher than shown above.
These companies that offer life insurance with critical and chronic illness living benefits underwrite a little bit differently than the insurance companies that just offer regular life insurance that only pays out for death. The reason is because of the higher likelihood that the companies that also offer the living benefits will have to pay out claims.
IMPORTANT: Rates, products and benefits can vary from State to State, so the above is only general information that will need to be verified based on State where you live and at the time you ultimately decide to apply. This is a market that will continue to change and evolve.
Contact us at 1-800-380-3533 or just email us at firstname.lastname@example.org if you’d like more information about life insurance with the living benefits mentioned above.