A life insurance policy rider that provides coverage for the insured if the insured requires long-term care services. These riders typically function by creating a “benefit pool” that is attached to the life insurance policy and is part of the death benefit.
When the insured qualifies for long-term care services, the rider is triggered and the insured may go “on claim”. When this happens, a portion of the policy’s death benefit, set aside as the “benefit pool” for the long-term care rider, is advanced to the policyholder. The death benefit is advanced under the rider on a $1 for $1 basis, and treated as a partial surrender or “cash withdrawal” of the death benefit.
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