by pa5762 » Mon Jun 01, 2009 10:39 pm
Hello and thanks in advance for any input. I just found this forum and thought I'd put my situation and question out there for help.
Last Sept I had to stop working due to progression of breast cancer and now I'm stage IV (late stage). I "ported" my group life insurance and the first payment is due this month.
Can I request to take the accelerated death benefit anytime or is there a waiting period ?
What if I am given the benefit and say some time down the road I get better and want to try to work a couple of days a month (I'm a nurse and can work in a hospital pool as little as I want).....will they ask for the money back seeing I haven't died yet??
The fact is I'd like to use the money to fix up my house so when I pass away my son can just sell it and move on. Just planning ahead.
Pat
Last Sept I had to stop working due to progression of breast cancer and now I'm stage IV (late stage). I "ported" my group life insurance and the first payment is due this month.
Can I request to take the accelerated death benefit anytime or is there a waiting period ?
What if I am given the benefit and say some time down the road I get better and want to try to work a couple of days a month (I'm a nurse and can work in a hospital pool as little as I want).....will they ask for the money back seeing I haven't died yet??
The fact is I'd like to use the money to fix up my house so when I pass away my son can just sell it and move on. Just planning ahead.
Pat
Posted: Wed Jun 03, 2009 06:35 pm Post Subject:
Thank you for your kindness/prayers sil!
Pat
Posted: Wed Jun 03, 2009 06:53 pm Post Subject:
Do all insurance companies provide accelerated death benefits? Can I purchase one for my ailing mother?
Just my 2 cents: The agent for my homeowners insurance said if I didn't already have a life insurance policy they could provide a small one of $15,000.00 for $172.00/month, no exam required, but I didn't need it. I never realized you could get small policys like this. Yes it's expensive but the way I see it if you know you may need to use it soon and can make the payment until then, then it beats not having funds to bury your loved one.
I've always had group medical and life coverage with work and now see why they say not to let it lapse.
Posted: Wed Jun 03, 2009 06:58 pm Post Subject:
I suppose it should only be taken if needed.
Posted: Thu Jun 04, 2009 03:04 am Post Subject:
To The OP and sil:
I'd also like to mention that the benefits you receive from accelerated death benefits may be considered as income. If you have Medicaid, this might affect it adversely.
It is rare that accelerated death benefits are considered taxable income. It used to be the case, but the IRS changed the IRC a short while ago to make just about every accelerated death benefit tax free. It has to be from a life insurance policy, and you need to meet certain guidelines which are only that the insured is either terminally ill or meets one of the qualifying events as listed in the policy. See the following link for details:
http://www.wwwebtax.com/income/accellerated_death_benefits.htm
If you use the benefits for long term care and the benefits exceed the daily allowance of tax-free benefits, the insured is taxed on the excess. As well, don't confuse an accelerated death benefit with a viatical (or structured life) settlement contract.
As far as Medicaid is concerned, life insurance policies are only considered a "countable asset" if the life contract is a cash value policy. Term polices are exempt regardless of face amount as they have no value until the death of the insured, and the insured isn't going to be the one who gets the death benefit. Cash value policies, on the other hand, can absolutely effect Medicaid eligibility depending on how much cash value you have over the exempted amount (I think that's only $1500, although I could easily be wrong).
InsTeacher
8) 8)
Posted: Thu Jun 04, 2009 05:19 am Post Subject:
Hi JTinsure,
I suppose it should only be taken if needed.
Things like accelerated death benefits would be good to people who're terminally ill. If you're not, then it's not worthy of paying for it. But don't you feel it's not always possible for us to weigh our risks in advance?
I'd never mind paying to cover unforeseen risks if that doesn't mean curtailing my basic needs. What do you think?
Steven
Posted: Thu Jun 04, 2009 07:32 am Post Subject:
Things like accelerated death benefits would be good to people who're terminally ill. If you're not, then it's not worthy of paying for it.
Many policies now-a-days have this benefit built-in which doesn't cost the insured. Adding this rider to your policy normally don't alter your premium rate much.
Posted: Fri Jun 05, 2009 12:39 am Post Subject:
I don't qualify for medicaid anyway since I worked for the past 35 years and now my ssdi payments are above the amount to qualify.
But the paperwork I on the life ins says the accel benefit is not considered income and is not taxable, I was sure to check on that.
Posted: Fri Jun 05, 2009 12:43 am Post Subject:
And I it was built into the plan per my long time employer (hospital) and I just ported the plan when I had to terminate work.
Posted: Fri Jun 05, 2009 04:54 am Post Subject:
PA- read a bit further back in the thread, which you probably already have. My previous posts echoes your paperwork in that it won't create a taxable event if you take an accelerated death benefit advance. :!: :!:
Quit listening to anyone that says it's taxable...it's NOT except for RARE circumstances, and you are NOT one of those RARE circumstances.
Hey everybody that says the OPs going to get taxed :arrow: :arrow: :arrow: :!: Quit confusing the OP!! She won't get taxed, ok? :D
Have a wonderful evening everyone.
InsTeacher 8)
Posted: Mon Jun 08, 2009 04:28 pm Post Subject:
I really like accelerated benefits for long term care purposes only. Otherwise if your life insurance is you only asset (should you be terminally ill) then better preparation was needed.
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