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Chronic illness insurance agreements

Chronic illness insurance gives individuals flexibility when deciding when and how they would like to receive care, should they become chronically ill. In addition, it can help protect their assets from the costly expenses associated with care, particularly over long periods of time.

Securian Financial offers tax-advantaged, long-term care (LTC) and chronic illness (CI) solutions to address a wide range of client needs. Help your clients secure their care, their assets and their future – for the long-term. 

Life policy agreements

Chronic Illness Conversion Agreement (CICA)

Availability1

  • Available with fully underwritten term policies with face amounts of $100,000 – $5 million
  • Must have the Extended Conversion Agreement (ECA)

Ideal client

  • Individuals who plan to convert their term policy to permanent coverage in the future
  • Want to lock in their insurability for chronic illness protection

Benefits

  • Guarantees the right to convert to an available individual life policy that offers chronic illness benefits
  • Does not require evidence of insurability at the time of conversion

How it works

  • Underwritten at issue; premium based on factors including age, underwriting class and coverage amounts
  • Upon adding the CICA to an Advantage Elite Select Term policy, the policyholder chooses the maximum chronic illness death benefit amount that will be available upon conversion
  • Owner may convert any percentage of this amount for chronic illness benefits with the addition of the Accelerated Death Benefit for Chronic Illness Agreement on the policy.2

Accelerated Death Benefit for Chronic Illness Agreement (ADB-CIA)3, 4

Availability1

  • Available with any of our currently available individual universal life (IUL) insurance policies

Ideal client

  • Protection-focused individuals

Benefits

  • Provides a chronic illness benefit payment through an acceleration of death benefit when the insured is chronically ill
  • Cash indemnity benefits can pay for care or anything clients choose

How it works

  • Underwritten at issue; charge based on factors including age, underwriting class and coverage amounts
  • 2% or 4% monthly chronic illness benefit payments reduce the policy’s death benefit dollar-for-dollar

Chronic Illness Access Agreement (CIAA)3, 5

Availability1

  • Available with Eclipse Accumulator IUL

Ideal client

  • Accumulation-focused individuals

Benefits

  • Provides a chronic illness benefit payment through an acceleration of death benefit when the insured is chronically ill

How it works

  • No underwriting or charge for this agreement
  • When an annual chronic illness benefit payment is made, the amount of death benefit accelerated will be greater than the chronic illness benefit payment

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1. “Availability” based on state approvals.

2. If the owner adds a Chronic Illness Agreement at the time of conversion, a minimum of $100,000 of the CICA amount must be converted. No more than the new permanent base face amount may be converted. If the policy has the Benefit Distribution Agreement, the CICA maximum is the base face amount.

3. The Chronic Illness Access Agreement, and Accelerated Death Benefit for Chronic Illness Agreement, may not cover all of the costs associated with chronic illness. The Agreements are generally not subject to health insurance requirements and do not provide long-term care insurance subject to state long-term care insurance law. The Agreements are not a state-approved Partnership for Long Term Care Program Agreement, and are not Medicare supplement policies. Receipt of Chronic Illness Benefit payments under these agreements may adversely affect eligibility for Medicaid or other government benefits or entitlements.

4. 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. 

5. The Chronic Illness Access 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 proceeds will be reduced when a chronic illness benefit payment is made under this agreement. The death proceeds will be reduced by the accelerated death benefit amount.

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.

Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.

Life insurance products contain fees, such as mortality and expense charges (which may increase over time), and may contain restrictions, such as surrender periods. Policyholders could lose money in this product.

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.

 

06-700, 09-932.04, 15-20035.04, 09-710.04, 15-20036.04, 07-660.04, 14-20018.04, 10-220.04, 15-20023.04, 12-140.04, 15-20044.04, 15-20001.04

For financial professional use only. Not for use with the public. This material may not be reproduced in any way where it would be accessible to the general public.

DOFU 9-2020
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