1. If owner/insured are different, benefits will be paid to the owner upon the insured being certified as a chronically ill individual.
Chronically Ill Individual:
All states except NY: Insured has been certified by a licensed health care practitioner within the preceding 12-month period as: (1) being unable to perform, without substantial assistance, at least two Activities of Daily Living due to loss of functional capacity (activities that include eating, bathing, toileting, continence, dressing and transferring) for period of at least 90 days3 or (2) requiring substantial supervision to protect the insured from threats to health and safety due to severe cognitive impairment. (Confinement due to medical condition is required to be permanent in CT.)
New York: Insured has been certified by a licensed health care practitioner as: (1) being unable to perform, without substantial assistance from another person, at least two Activities of Daily Living due to a loss of functional capacity for at least 90 days; or (2) requiring substantial supervision to protect the person from threats to health and safety due to a severe cognitive impairment.
2. As long as premiums are paid and the policy remains in force. Guarantees are based on the claims-paying ability of the issuing insurance company.
3. The IRS daily per diem rate takes into consideration benefits received by an individual from all long-term care and chronic illness contracts.
4. Due to uncertainty in the tax law, chronic illness benefits paid from a life insurance contract may be taxable. Please ensure that your clients consult a tax advisor regarding chronic illness care benefit payments from a life insurance contract.
5. The accumulation value, surrender value, loan value and death benefit will be reduced by a chronic illness benefit payment under this agreement.
6. Eligibility for ADB-CIA benefits varies by state.
7. If the policy accumulation value goes to zero while chronic illness benefit payments are being made, all policy and agreement charges that would otherwise be assessed against the accumulation value will be waived.
Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.
Guarantees are based on the claims-paying ability of the issuing insurance company.
Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions such as surrender charges. Variable life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. There may also be underlying fund charges and expenses, and additional charges for riders that customize a policy to fit individual needs. Charges and expenses may increase over time. The variable investment options are subject to market risk, including loss of principal.
The Accelerated Death Benefit for Chronic Illness Agreement may not cover all of the costs associated with chronic illness. The Agreement is generally not subject to health insurance requirements and does not provide long-term care insurance subject to state long-term care insurance law. This Agreement is not a state-approved Partnership for Long Term Care Program Agreement, and is not a Medicare supplement policy. Receipt of Chronic Illness Benefit payments under this agreement may adversely affect eligibility for Medicaid or other government benefits or entitlements.
Due to uncertainty in the tax law, chronic illness benefits paid from a life insurance contract may be taxable. Please ensure that your clients consult a tax advisor regarding chronic illness care benefit payments from a life insurance contract.
The Accelerated Death Benefit for Chronic Illness Agreement is a life insurance policy agreement that provides an option to accelerate the death benefit in the event that the insured becomes chronically ill.
The accumulation value, surrender value, loan value, and death benefit will be reduced by a chronic illness benefit payment under this agreement.
CA Residents: This is a life insurance benefit that also gives you the option to accelerate some or all of the death benefit in the event that you meet the criteria for a qualifying event described in the policy. This policy or certificate does not provide long-term care insurance subject to California long-term care insurance law. This policy or certificate is not a California Partnership for Long-Term Care program policy. This policy or certificate is not a Medicare supplement policy.
Additional agreements may be available. Agreements may be subject to additional costs and restrictions. Agreements may not be available in all states or may exist under a different name in various states and may not be available in combination with other agreements.
Policy loans and withdrawals may create an adverse tax result in the event of lapse or policy surrender and will reduce both the surrender value and death benefit. Withdrawals may be subject to taxation within the first fifteen years of the contract. Clients should consult their tax advisor when considering taking a policy loan or withdrawal.
This information is a general discussion of the relevant federal tax laws provided to promote ideas that may benefit a taxpayer. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. Taxpayers should seek the advice of their own advisors regarding any tax and legal issues specific to their situation.
Insurance products issued by Minnesota Life Insurance Company
Policy form numbers: ICC16-20057, 16-20057 and any state variations; 15-20026; ICC19-20204, 19-20204 and any state variations; ICC18-20150, 18-20150 and any state variations; ICC18-20149, 18-20149 and any state variations; 18-20155
The information presented above is solely intended for use by financial professionals. Such information is not intended for public consumption or dissemination.