Living-benefit riders: what to say about chronic, critical and terminal illness accelerations

Most term products carry accelerated benefit riders now, and most presentations either ignore them or oversell them. Neither helps.

Terminal illness. Nearly universal. If a physician certifies a life expectancy under a stated window, often 12 or 24 months, the client can accelerate part of the death benefit. Say it plainly: "If the news is the worst news, the money can come while you're still here."

Critical illness. Triggered by specified events like heart attack, stroke, invasive cancer, as defined in the policy. The amount is usually a discounted acceleration based on the severity and the reduction in life expectancy, not a flat lump sum. Don't quote a number you can't defend.

Chronic illness. Triggered by the inability to perform a stated number of activities of daily living or a cognitive impairment. Same idea: an acceleration, discounted, with carrier-specific limits.

What to say: these riders let the client use some of their own death benefit early when life takes a hard turn. What not to say: that this replaces disability insurance, long-term care coverage or a health plan. It doesn't, and a client who finds that out at claim time remembers who told them otherwise.

Read the rider language for each carrier you write. They differ in triggers, caps and how the acceleration is calculated.