Chronic illness accelerated benefit riders

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By Carl A. Friedrich, Teresa McNeela | 04 May 2012

More and more companies are seeking ways to enhance their life insurance offerings. One particular approach is through the offering of various forms of living benefits that are provided by the acceleration of life insurance death benefits under certain situations.

This research report discusses chronic illness accelerated benefit riders and covers the following areas:

  • A review of relevant NAIC model regulations and certain aspects of applicable federal tax law
  • Identification of chronic illness rider benefit structures available in the marketplace
  • A review of funding methods and designs, including the lien approach, the discounted death benefit approach, and the dollar-for-dollar death benefit reduction approach
  • Actuarial considerations
  • Identification and analysis of differences in key rider features
  • A review of sales information with various breakdowns by base plan chassis, distribution outlets, and issue age
  • Results from a late 2011 Milliman survey of 43 companies regarding chronic illness riders