Remember the commercial, "Aspirin different? Peanut butter different." You don't? Well maybe that's because you are under fifty.
But the point is, not every brand in a product is the same. The trick is to know the right questions to ask to distinguish between the market leaders and the also-rans.
A number of companies have rushed to throw their entry into the living benefit race. A living benefit transforms an insurance policy’s death benefit into a benefit that can serve you while you are alive.
Here is what to look for:
Critical Care Trigger: do they have one? You are far more likely to trigger one of the many critical care events than the chronic care event. What constitutes a critical care event? Some brands have longer list than others. How long do you have to own the policy to trigger this benefit? How long after the event can you accelerate another benefit? If you suffer two heart attacks within a year, will the company permit you to take a second benefit?
Chronic Care Trigger: How long do you have to wait: thirty days or two years before triggering this benefit? Can you take as much as you want or are you limited to a monthly payment? Point blank question: how much of the death benefit can you take for Chronic Care? If you accelerate part of the benefit to meet the costs of one year of chronic care, can you take it a second and third times in subsequent years? What happens if you need long term care for five years?
Terminal Illness Trigger: How many months in advance of death can you tap the benefit? Twelve? Twenty-four? Who makes this determination? How soon after the diagnosis do you have to accelerate the benefit? If you qualify for the Terminal illness benefit, do you have to go through hoops to receive additional money from the policy?
How does an acceleration of benefit affect the death benefit? When you draw down a dollar of death benefit will the company give you a dollar of living benefit? If there is a “haircut” or reduction, how does the company come up with that reduction? Is there a fee to use the benefit?
As Detective Columbo would say, "Sometimes knowing the question is more important than thinking you know the answer." What? You don’t know who Columbo is? Gosh, am I feeling old.