Life Insurance

What You Need to Know About Life Insurance and Accelerated Death Benefits

By | Life Insurance, Life Insurance

How does Life Insurance & Accelerated Death Benefits Work?

Life insurance policyholders may have the option of adding ‘riders’ to their policies to cover particular circumstances. One of these riders known as an ‘accelerated death benefit’ may be useful in cases of a serious and life-threatening disease.

With the addition of this rider, the policyholder may be able to draw on the death benefit in advance to pay for medical care. It’s important to note that this only applies in cases of severe illnesses such as terminal cancer, or another disease requiring extensive medical intervention.

When the death benefit is drawn on in advance in this manner, it’s important to be aware that the amount due to beneficiaries upon death will be reduced. In cases where the policyholder recovers from the illness, he or she is not generally required to pay back the benefit. However the value of the benefit will have decreased by the amount previously drawn on it.

In some cases of an accelerated death benefit riders, insurance providers only charge extra for it if it is actually utilized. In other cases, insurers may charge extra for the rider. This is something that should be checked with the life insurance agent when taking out the policy, or when taking the option of adding a rider to an existing policy.

Contact Harrington Insurance Agency in San Jose, CA today if you any insurance needs that need to be met.

Key Employee Life Insurance from Harrington Insurance Agency

By | Business Insurance, Life Insurance

Does Your Business need Key Life Insurance

One variant of California life insurance is that taken out by companies on one or two key employees. Known as key employee insurance, this coverage financially protects a firm against the death of its key employees, providing compensation for any loss of earnings incurred.

According to figures published by the National Association of Insurance Commissioners, 71 percent of companies questioned in their survey said they relied heavily on the presence of one or two key employees for their continued financial well being. However only 22 percent said they had taken out key employee insurance to cover the death of the key worker or workers.

How Much Is Needed?

The amount of coverage purchased on the employee will depend on compensation needed for the replacement of the worker, including training and recruitment fees. Any loss of earnings suffered by the company by the death of the key employee will need to be factored in.

The policy is usually owned by the company and becomes payable upon the death of the employee. It’s a form of California life insurance with the beneficiaries being the firm not the family. It can also be used by in conjunction with another agreement drawn up by business partners to ensure arrangements are in place that would ensure neither the deceased partner’s family nor the surviving business partners would be out of pocket as a result of the death. Please contact us for further information if you are interested in purchasing such coverage.