Flexible Care Benefit Rider1 — Protection for Life and Health
To understand how this rider can help pay for your long-term care expenses, let's look at a hypothetical example. Melinda was healthy and active until she suffered a stroke, and as a result, became chronically ill. To continue living in her home, Melinda needed part-time care five days a week at $18.50 an hour2, for the remaining four years of her life. She also had to pay for services that she could no longer do on her own, such as housecleaning and yard work.
Protection for Life and Health
Fortunately, she had a Universal Life policy with a $250,000 death benefit and a Flexible Care Benefit rider and qualified to receive benefits. She chose to receive payments of $4,000 per month3.
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What Was The Cost of Melinda's Care?
Home health care:
$148 per day x 5 days a week x 52 weeks for 4 years
|Other living expenses (house cleaning, yard work, etc.)||$7,500|
What Was The Cost of Melinda's Care?
|Flexible Care Benefit rider benefit - $4,000 per month x 12 months for 4 years||$192,000|
|Melinda's death benefit ($250,000 - $192,000)||$58,000|
The purpose of this communication is the solicitation of insurance. Contact will be made by an insurance agent or insurance company.
When the insured becomes chronically ill and is eligible to receive benefits, he/she can access a portion of the policy's death benefit every month. The monthly benefit amount can be used at the policyholder's discretion. Monthly benefit payments will lower the policy's death benefit and other policy values. In addition, cost of insurance, monthly charges for any riders, and monthly expense charges for the policy will be waived while claim requirements are met.
Chronically ill means a licenced health care practitioner has certified that the insured: is unable to perform at least two activities of daily living (as defined in the rider) without substantial assistance, for a period of at least 90 days due to a loss of functional capacity; or requires substantial supervision to protect the insured's health and safety due to severe cognitive impairment.
In this example, Melinda opted to receive a larger monthly benefit than her actual long-term care expenses. Even after providing benefits to help cover those expenses, her life policy still paid a sizeable lump sum to her loved ones.
For some situations, including business situations, benefits received under the Flexible Care Benefit Rider may be taxable as income. The policyholder should consult their tax advisor to determine the tax impact that this rider may have.
For details about the cost, coverage, and limitations, see a State Farm agent.
1Flexible Care Benefit rider is the marketing name for Accelerated Death Benefit for Long-Term Care Rider.
2 Based on average cost of home health aides. Genworth Financial. Genworth Financial Cost of Care Survey. Conducted by CareScout, an independent research firm. (April 2009).
3 The maximum monthly benefit is the lesser of:
Two percent of the life insurance death benefit (at the time of the claim).
An amount chosen by the policyholder subject to a monthly minimum defined in the rider.
Universal Life policy series C11030.
Accelerated Death Benefit for Long-Term Care Rider, used with Universal Life, policy series C10220.
Insurance policies and/or associated riders and features may not be available in all provinces, and policy terms and conditions may vary by province.
LIMITATIONS AND EXCLUSIONS PROVISION: The Monthly Benefit will not exceed the Maximum Monthly Benefit. No Monthly Benefit will be paid for a period more than 12 months prior to the date we receive a request for benefits under this Rider. No monthly benefit will be paid for any loss that: starts before the effective date of this rider; results from an attempted suicide, while sane or insane, or intentionally self-inflicted injury; results from the insured's alcoholism or addiction to drugs or narcotics; but not addiction which results from the administration of those substances in accordance with the advice and written instructions of a licenced health care practitioner; occurs or continues while the insured is living outside of Canada, the United States of America or its territories or possessions; results from the Insured's participation in a felony, riot or insurrection, or involvement in an illegal occupation; occurs or continues during the insured's incarceration; or results from any act due to war whether or not the insured is in the military service. "War" means declared or undeclared war or conflict involving the armed forces of one or more countries, governments, or international organizations.
State Farm agents do not provide tax or legal advice. Please consult your tax, legal, or investment advisor regarding your specific circumstances.
Coverage will expire when either no premiums are paid following the initial premium or subsequent premiums are insufficient to continue coverage.
Dividends are a return of premium and are based on the actual mortality, expense, and investment experience of the Company. Dividends are not guaranteed.
State Farm International Life Insurance Company Ltd.
Licenced in Alberta, New Brunswick and Ontario.