Are you or someone you know diagnosed with diabetes? Have you considered the financial implications should you develop any complications? We want you to take a second look at life insurance with living benefits with diabetes. We consider it a “must-have” for anyone diagnosed with this illness or who has higher chances of developing diabetes.
In this guide, we would go over why you need to reconsider what life insurance can do for you; what exactly are living benefits in life insurance, and why you should upgrade your coverage.
If you have any questions we are not covering in the guide or would like us to discuss with us your personal situation and see if you qualify, simply reach out to us. You can give us a call, fill out the instant quote form, or send us a message.
Here is what we would cover
- Life insurance with living benefits 101
- Why a person with diabetes needs to consider life insurance with living benefits
- What are the qualifications
Ok, let’s dive in…
Life insurance with living benefits 101
Life insurance with living benefits is a new take on life insurance. It allows you to access your death benefit and use a portion of it, while still alive. Yes, you do not have to die for your life insurance policy to payout.
In order to file a claim to accelerate your death benefit (pay it in advance), you need to suffer a qualifying medical condition. It is oftentimes referred to as a trigger. There are various conditions that could qualify you for acceleration ranging from a heart attack, stroke to a terminal or chronic illness.
Here are some guides, outlining more information on life insurance with living benefits and to help you understand this feature
- Is life insurance with living benefits worth it – outlining what exactly are living benefits and how they can help you
- Are living benefits the same as cash value– explaining the difference between cash value and living benefits and when you can use one or the other
- FAQs about life insurance with living benefits – answering some of the most common questions as to who receives the money or do you need to pay the benefit back.
In a nutshell, living benefits could be the peace of mind that there is financial help, after a major health condition.
Why a person with diabetes needs to consider life insurance with living benefits
The answer to this question lies in the triggers that could qualify you to exercise the accelerated benefit riders (aka living benefits).
Did you know that:
“Association from 2012 shows 65% of people with diabetes will die from some sort of heart disease or stroke. In general, the risk of heart disease death and stroke are more than twice as high in people with diabetes.“
“Besides cardiovascular disease, having diabetes could lead to an increased risk of Nerve damage (neuropathy), Kidney damage (nephropathy), Eye damage (retinopathy), Foot damage, etc.“
Source: Mayo Clinic
This is where living benefits could come handy. They can help you survive financially what you’ve physically survived.
You could qualify to accelerate your life insurance if you experienced:
- Heart attack,
- Diagnosis of End Stage Renal Failure
- Major Organ Transplant
- Diagnosis of ALS
- Paralysis, etc.
Let’s look at an example:
Let’s look at Kim. Kim is 45 years old and is diagnosed with Type 2 diabetes. She manages her condition by taking a daily dose of Metformin along with a healthy diet and exercise. Unfortunately, despite Kim’s effort to manage her diabetes, she suffers a major heart attack. She survives it, however, she spends a month in the hospital and requires physical therapy. Kim is not able to go back to work as if nothing happened, and her medical bills are piling up.
Luckily, Kim had bought a $500,000 life insurance policy with living benefits. She decides to exercise the rider and files to accelerate $300,000 out of her $500,000 policy. After the company reviews her claim and medical records, they make her an offer of $165,000, which she accepts.
Here are the results of her accelerations:
- Kim will be left with $200,000 in life insurance for her family
- She would receive a check for $165,000 which she can use however she seems fit. She can pay off her medical bills, living expenses, or afford to higher extra care around the house, while she is back on her feet.
Now, this is just an example. Every situation is different and no one could give you an accurate breakdown of how much a company would payout as a result of acceleration. The rule of thumb is that if the condition has seriously affected your life expectancy, you would receive a higher percentage.
We also understand that in the example above, Kim had to “give up” $300,000 in death benefit to receive “only” $165,000. However, this is money that she receives TODAY. Her family would be able to cover any expenses while she is still living.
The last thing to keep in mind is that she does not have to go through the acceleration. It is an option that she can decide to pursue or not.
We are strong believers that in a situation like that is better to have the choice of rejecting vs not be given the choice at all.
As a summary, due to the increased risk of subsequent health conditions, life insurance with living benefits with diabetes is worth a consideration.
What are the qualifications
This is the part, where take over and assist you in every step of the process. We would take the time to ask you pre-qualification questions to ensure eligibility and match you with the carrier that would offer you the best price and easiest approval process.
Here are some of the requirements the companies would have in order for you to qualify for life insurance with living benefits as a diabetic:
Type of diabetes
The very first thing they would need to know is are you diagnosed with Type 1 or Type 2 diabetes. This makes a big difference in the underwriting options.
Age of diagnoses
Typically later in life, you are diagnosed, the better rating you can get from the life insurance company
Type of treatment
Are you currently being treated with oral medication, a form of insulin, or a combination of both?
What is your current A1C level
Companies use the A1C level as a guide to how well is the diabetes managed. Higher A1C would mean that the condition is not responding well to treatment and you might be at a higher risk of developing health complications
Companies would ask what is your current height and weight. If your BMI (Bodi Mass Index) is high you could expect to pay a higher rate.
Having diabetes with tobacco use could be viewed as not a favorable combination. Some companies would ask the number of cigarettes you smoke and could decline your application when combined with diabetes.
Do you currently have any complications from the diabetes
As we mentioned above, diabetes could lead to many complications. For example, if you’ve suffered nephropathy due to diabetes, it might be challenging getting an approval.
Keep in mind,
If your diabetes is not very well managed, some companies might still offer you coverage, however without the living benefits. While this might not be an ideal situation, we would encourage you to take the policy. If your condition is not well managed, this is a sign that you have a higher mortality risk and you need to ensure your family is well protected.
Should your situation improves, you can always re-visit and see if there is a better alternative in the future.
Life insurance with living benefits for people with diabetes has lots of advantages. It could offer you financial support should you suffer any qualifying health condition. You do not have to die for the policy to payout.
We hope you find this helpful. If you would like us to review your situation, simply reach out to us!