Coming Soon! ... Life When You Need It!

Accelerated Benefit Riders - for Life's Unexpected Illnesses

As 16,000+ baby boomers turn 65 every day, a growing number are concerned about the possibility of facing long term illnesses which could threaten their ability to pay bills, retain the family home or leave a legacy for their children and grandchildren. Although these chronic, critical and terminal
illnesses are of great concern, the vast majority of consumers are not buying long term care type of coverage. Why? To understand fully, we need to first look at the state of the Long Term Care market.

Long Term Care Market

Although everyone should purchase stand alone Long Term Care (LTC) coverage, the fact remains that most consumers can not afford the coverage or will not commit to the premium even if affordable. As we have seen, many insurance companies offering LTC coverage have increased premiums in recent times.  Several have pulled products off the market or are in the process of doing so this year. The expectation is that we have not seen the end of increasing premiums for inforce coverage and new sales as insurance companies still do not have enough data to grasp the full exposure to future claims. There is a huge need for long term care type of coverage going forward, but how does the insurance industry meet the needs of the consumer? By analyzing three separate income segments of low, middle and
high income consumers, we can further understand purchasing behavior or the lack thereof.

Low Income Consumers

To put it bluntly, this segment does not have the cash flow to purchase long term care coverage. These consumers are struggling daily to pay for bills due now and consider all of their income allocated. There is no savings and although many will buy life insurance because they understand the need to protect their families, stand alone long term care coverage is not an option. Unless there is a no cost alternative, these consumers will have to rely on inheritance, government programs, family support or just being extremely lucky by not getting ill.

Middle Income Consumers

Consumers in this segment have emergency funds, investments and the cash flow to pay for long term care premiums. So why aren't more of these consumers purchasing LTC coverage?  Many of these consumers ask the question... what happens if I pay the LTC premiums for the remainder of my life but never experience a chronic, critical or terminal type of long term
care illness? The answer of course is the consumer has paid for the coverage but will not receive anything in return except the peace of mind knowing the coverage exists to protect the family's assets. Instead of accepting this "use it or lose it" scenario, many times this consumer segment does not purchase
LTC coverage and gambles on the possibility of having enough money set aside to cover the ever increasing health care costs associated with long term care type of illnesses.

High Income Consumers

The high income segment of consumers has a high net worth with a broad mix of assets. Their debt is usually low or nonexistent, but many high net worth consumers today are asset rich and cash poor. Yes, these consumers still have high incomes but the income being generated from assets has diminished
considerably over the last several years. Many of the high income consumers believe they can "self insure" if they ever experience a prolonged illness; therefore do not purchase LTC coverage. The big question is... what happens if the current economy returns when the consumer needs the liquidity to pay
for long term care type of expenses? If the current economy were to repeat itself, what legacy assets will the consumer be willing to liquidate? Will they be able to leave a legacy to their children or grandchildren? Will the family farm or ranch have to be liquidated? What about the commercial building that was worth $3,500,000 five years ago but has a current market value of  $1,750,000? A plan should be in place for the exposure to long term care type expenses no matter the income level. The worst plan is no plan.

A Solution for All Income Levels

There is an answer for all income levels. For the consumer who can't afford or will not buy stand alone long term care coverage, the solution is as easy as securing a permanent life insurance policy (ANICO Executive Universal Life, ANICO Indexed Universal Life, Affinity 7 Par Whole Life) from American
National Insurance Company. ANICO's permanent life policies listed above and issued after the Riders are released, may include three separate Accelerated Benefit Riders (ABRs) which will enable the consumer to accelerate the full eligible death benefit for liquidity when they need to cover expenses
associated with chronic, critical or terminal illnesses. The ABRs are included with no increase in premiums on the life insurance coverage. After all, why should the consumer pay for something which may never be used?

As an advisor, the ABR living benefits offer you the perfect opportunity to contact new and existing customers to introduce ...Life When You Need It!

Accelerated Benefit Rider Summary (refer to product guide for full details including state approvals.)

Chronic: insured is unable to perform 2 of 6 activities of daily living or insured requires supervision due to severe cognitive impairment. ABR payment is expected to be tax qualified depending on the amount received.

Critical: benefit triggered by specific qualifying health events such as heart attack, stroke, cancer or renal failure (16 triggers available). ABR payment is expected to be taxable from a life insurance perspective.

Terminal: death is expected in less than 24 months. ABR payment is expected to be tax qualified in most situations.