Flexible Care Benefit Rider — Protection for Life and Long-Term Care (Not available in CA and NY)
With the Flexible Care Benefit rider from State Farm Life Insurance Company (Not licensed in MA, NY or WI), if you become chronically ill and are eligible to receive benefits, you can access a portion of the policy's death benefit every month. These flexible benefits, or accelerated benefits, can be used at your discretion to help offset the costs of long–term care.1 In addition, the cost of insurance, monthly charges for any riders, and monthly expense charges for the policy will be waived while claim requirements are met.
Chronically ill means a licensed health care practitioner has certified that you:
- Are unable to perform at least two activities of daily living (as defined in the rider) without substantial assistance, for a period of at least 90 days due to a loss of functional capacity; or
- Require substantial supervision to protect your health and safety due to severe cognitive impairment.
Let's see how it works
To understand how this rider can help pay for your long-term care expenses, let's look at a hypothetical example. Melinda was healthy and active until she suffered a stroke, and as a result, became chronically ill. To continue living in her home, Melinda needed part-time care five days a week, at $20 to $25 per hour,2 for the remaining four years of her life. She also had to pay for services that she could no longer do on her own, such as housecleaning and yard work.
Fortunately, she had a Universal Life policy with a $250,000 death benefit and the Flexible Care Benefit rider and was eligible to receive benefits. She chose to receive payments of $4,000 per month to help offset the costs of assisted care.3
What was the cost of Melinda's care?
|Home health care: $162 per day x 5 days a week x 52 weeks for 4 years||$168,480|
|Other living expenses (house cleaning, yard work, etc.)||$7,500|
How much did Melinda and her beneficiaries receive?
|Flexible Care Benefit rider benefit: $4,000 per month x 12 months for 4 years||$192,000|
|Melinda's death benefit ($250,000–$192,000)||$58,000|
In this example, Melinda opted to receive a larger monthly benefit than her actual long-term care expenses. Even after providing benefits to help cover those expenses, her life policy still paid a sizeable lump sum to her loved ones.
It is possible that benefits provided by this rider may be taxable. You should consult your personal attorney or tax advisor.
For details about the cost, coverage, and limitations, see a State Farm agent.
1 Monthly benefit payments will lower the policy's death benefit and account value in proportion to the benefit paid.
2 Based on average cost of home health aides. Genworth Financial. Genworth Financial Cost of Care Survey. Conducted by CareScout, an independent research firm. (May 2016).
3 The maximum monthly benefit is the lesser of:
- Two percent of the life insurance death benefit (at the time of the claim) and the
- IRS per diem amount ($370/day in 2019) times the number of days in the month. (Not applicable in Canada)
The policyholder can choose a lesser amount, subject to a monthly minimum defined in the rider.
Insurance policies and/or associated riders and features may not be available in all states, and policy terms and conditions may vary by state.
Monthly charges for the Flexible Care Benefit Rider are not guaranteed and can be increased subject to maximum charges and the terms of the policy.
The premium class may vary based on underwriting review and may be different or the policy may not be available. A medical exam may be required. This policy has exclusions and limitations. For costs and complete details of the coverage, please contact a State Farm agent/insurance producer.
PREEXISTING CONDITION LIMITATIONS. We will not pay for a loss due to a Preexisting Condition which you did not disclose in the application unless the loss begins more than six (6) months after the Effective Date of this Rider. However, providing incorrect information may cause us to rescind this Rider or deny an otherwise valid claim. If this Rider replaces another long-term care insurance rider or policy, the six (6) month time period above is waived to the extent that it has been satisfied under the replaced rider or policy.
LIMITATIONS AND EXCLUSIONS. No Monthly Benefit will be paid for any loss that:
(1) results from an attempted suicide or intentionally self-inflicted injury;
(2) results from the Insured's alcoholism or addiction to drugs or narcotics; but not addiction which results from the administration of those substances in accordance with the advice and written instructions of a Licensed Health Care Practitioner;
(3) occurs or continues while the Insured is living outside of the United States of America or its territories or possessions;
(4) results from the Insured's participation in a felony, riot or insurrection, or involvement in an illegal occupation; or
(5) results from any act due to war whether or not the Insured is in the military service. "War" means declared or undeclared war or military activity by one or more national governments and does not include terrorist acts, other random acts of violence not perpetrated by the Insured, or civil war or community faction.
Life insurance and annuities issued by:
State Farm Life Insurance Company (Not licensed in MA, NY, or WI)
State Farm Life and Accident Assurance Company (Licensed in NY and WI)
Each insurer is financially responsible for its own products.