When can I access my life insurance coverage if I have a serious illness?

Some policies are “indemnity” plans and others are “reimbursement” plans. Indemnity means the life insurance company will payout in the form of a check (either monthly, quarterly, semiannually, or annually) in the case that you meet the criteria for the health condition you are covered for through verification of a U.S. healthcare professional. Reimbursement means the life insurance company will payout after receiving receipts or proof of specific care outlined in the policy details, such as admittance into a nursing facility, hospice, or other. - Long term care - most often you can take out 2% of your policy amount per month (within a state maximum) tax-free after a 90 day waiting period. Withdrawing the long term care benefit will decrease the death benefit if added as a rider to a life insurance policy. - Chronic illness - can be accessed after a waiting period of 90 days and within 12 months of a healthcare professional certifying the insured is chronically ill. The maximum amount withdrawn in a given year is the lesser of 24% of your death benefit, $135,050 (per diem amount for 2019), and $240,000. Withdrawing the chronic illness benefit will decrease the death benefit if added as a rider to a life insurance policy. - Critical illness - a physician must certify that the insured has a critical illness that will result in death if untreated in 12 months. For most policies, the insured will have access to 90% of the death benefit or up to $500,000. Withdrawing the critical illness benefit will decrease the death benefit if added as a rider to a life insurance policy. Stand-alone critical illness policies can vary in structure. - Terminal illness - a physician must certify that the insured has a terminal illness that is expected to result in death within 12 months of the diagnosis. The insured will be able to accelerate 100% of the total coverage amount or up to $1,500,000, whichever is less.