Managing the cost of chronic illness with the Chronic Illness Rider

Plan for chronic illness and find peace of mind by enhancing your Group Term Life Insurance.

If you or a member of your family has ever had to care for a loved one with a chronic illness, you understand the toll it can take physically, emotionally, and financially. For many people, planning ahead for long-term needs has become more of a necessity than ever. Here’s where the Chronic Illness Rider can enhance your Group Term Life Insurance and help you and the people you love find peace of mind. Flexible and available at a price designed to fit your budget, the Chronic Illness Rider offers you protection in two ways:

  1. It helps you manage the expense of a chronic illness and gives you the security and value of Group Term Life Insurance. It does so by simply offering a tax-free acceleration of a portion of your Group Term Life Insurance policy death benefit in the event the insured becomes permanently chronically ill.
  2. By adding this rider, you are protected in the event you do need the benefit. And if you don't need it, you still have the death benefit protection.

Because you don’t have to submit receipts or a plan of care for reimbursement, the Chronic Illness Rider gives you the power to use benefits however you like. Benefits can be used at your discretion alone.

Chronic Disease: Learn the facts.

Remember, if you or someone you love is managing an illness that requires extended care, you're not alone. Consider these facts:

According to the Urban Institute, 70% of Americans who survive to age 65 develop severe long-term service and support needs for the remainder of their lifetime and 48% receive some paid care over their lifetime.1

Some 13.8 billion Americans age 65 and older are projected to have Alzheimer’s dementia by 2060. In 2021, Alzheimer’s and other dementias was projected to cost the nation $355 billion. By 2050, these costs could rise as high as $1.1 trillion, reports the Alzheimer’s Association.2

Women who reach age 65 are expected to live 2.5 years longer than men and spend twice as many years in a disabled state compared to men. Women who are caregivers traditionally have less savings stored to pay for long term needs underscoring the importance of the Chronic Illness Rider.3

A one-year stay in a private room in a nursing home averaged approximately $108,405.4 Even if you're young and healthy—with a strong support system and enough money set aside—you can never be sure what the future will hold.

So what’s next?

Check with your group plan administrator to see if your association offers a Chronic Illness Rider that can be added to your Group Term Life Insurance. It's a  valuable way to help protect your family by enhancing insurance you already have.

NOTE TO CLIENTS

The following disclosure must be added to all Chronic Illness Rider Marketing Materials:

This is a life insurance benefit that also gives you the option to accelerate some of the death benefit in the event that you are certified with a chronic illness as described in the certificate.

IMPORTANT NOTICE: This rider is not intended to be a federally tax-qualified long-term care insurance contract under Internal Revenue Code (IRC) Section 7702B. Therefore, the premiums payable for this rider do not qualify as long-term care insurance premiums and are not deductible from gross income for federal income tax purposes. This rider, however, is subject to the federal per diem limits set forth in IRC Section 7702B. Under this rider, New York Life will not pay claimants more than the federal per diem limits. Assuming the amount you receive in the aggregate from all applicable policies does not exceed the federal per diem limits set forth in IRC Section 7702B, the benefits provided by the Chronic Illness Rider are intended to be excludable from federal gross income under Section 101 (g) of the IRC.

Receipt of an accelerated death benefit may affect eligibility for Medicaid or other government benefits or entitlements and may have income tax consequences. Accelerating benefits before applying for these programs, or while you are receiving government benefits, may affect your initial or continued eligibility. Clients can contact the appropriate social service agency (e.g., the Medicaid Unit of your local Department of Public Welfare or the Social Security Administration Office) for more information.

1“What is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports?”, Urban Institute, June 24, 2021.

2“2021 Alzheimer’s Disease Facts and Figures,” Alzheimer’s Association, 2021.

3“Long-Term Care: A Resource Guide,” Women’s Institute for a Secure Retirement, 2022.

4“2021 Nursing Home Costs by State and Region”, American Council on Aging, March 04, 2022.

 

5034173.2