Life insurance, Living Benefits, and Alzheimer's Disease

Most people know that life insurance provides a death benefit when you die.

But life insurance often also comes with Living Benefits that can provide financial resources to pay for expenses due to a qualifying event. ¹

Living Benefits are available with every life insurance policy issued by one of the companies of National Life Group (depending on state approval). One example is the Alzheimer's Disease Rider.

Learn more about Living Benefits and watch stories from policyholders who used them during difficult times.

Key takeaways:

Life insurance can provide financial support after death and during your lifetime.
The Alzheimer Disease Rider from National Life Group may provide accelerated benefits when the insured has a qualifying diagnosis of Alzheimer’s disease or Lewy Body Dementia. A specialist’s diagnosis and certification are required.
Not all forms of dementia are covered, and family medical history may affect eligibility.
Accelerating benefits reduces the overall death benefit, and cash value of the policy, if any.
Living Benefits can be used to pay for any expenses, not just medical costs.
Living Benefits may not be available in all states.

Life insurance with Living Benefits can provide protection during your lifetime

About 1 in 9 people	$9,733 per month
Age 65 and older has Alzheimer's dementia²	The average cost for a shared room in a skilled nursing facility in the U.S.³

Many people worry about Alzheimer's disease. To provide peace of mind, National Life Group offers an optional Alzheimer's Disease Rider, available with term and permanent life insurance policies (depending on state availability).

This rider allows for payment of a portion of an insured's death benefit, on a discounted basis.

Requirements to qualify to receive this accelerated benefit

To qualify for the benefits under the Alzheimer's Disease Rider, the following conditions must be met:

A specialist must provide a qualifying diagnosis of Alzheimer's disease or Lewy Body Dementia.
The specialist must certify:
- A score of less than 20 out of 30 on the Mini-Mental State Exam (MMSE), or an equivalent of this score under a widely accepted test of cognitive function
- Clinical impairment in at least two areas:

In determining whether an insured has experienced a qualifying event, National Life Group may consider both the certification and the records of the insured’s medical history, diagnosis, and treatments to ensure that the records support the certification.

Who does not qualify for this rider?

The rider is not available if the insured has a first-degree relative (mother, father, or siblings) with a history of Alzheimer’s disease.

If you are 60 or older when you buy your policy, this rider won’t be included.

Are all types of dementia covered by this rider?

No, only a qualified diagnosis of Alzheimer's disease or Lewy Body Dementia is covered by the Alzheimer’s Disease Rider. All other forms of dementia are not covered by this rider but may be covered by National Life Group’s Chronic Illness Rider.

Examples of forms of dementia that aren’t covered include (but are not limited to):

Dementia induced by alcohol-related brain damage, toxic substance, or medication
Dementia associated with Parkinson’s disease, other than Lewy Body Dementia
Vascular dementia
Frontotemporal dementia
Primary progressive aphasia
Dementia associated with infectious disease such as, but not limited to, COVID, encephalitis, and meningitis

Why is the accelerated benefit lower than the death benefit?

The actual payment received is less than the portion of the death benefit accelerated because the benefits are paid before death. Values are based on a current interest rate and mortality rates.

There is an initial administrative fee at the time the rider is exercised. The amount accelerated reduces the death benefit and the cash value.

What can you use the money for?

You can use the money for any purpose, including¹:

Medical and non-medical expenses
Structural changes to a home to accommodate the illness
Compensation for non-licensed care providers
Income replacement

Are there any tax implications?

Benefits are intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code.

Whether such benefits qualify depends on factors such as your life expectancy at the time benefits are accelerated.

Consult with your personal tax advisor to determine the tax status of any benefits paid under this rider and with social service agencies concerning how receipt of such a payment will affect eligibility for public assistance.⁴

Next Steps

Find out what is best for you and your unique situation: Work with your agent or a financial/tax professional.
Learn more about life insurance options offered by National Life Group.
Learn more about Living Benefits.
Ready to buy life insurance? Request a call from a National Life agent.

¹ Accelerated Benefits Riders, form series 7490(0200)/7493(0200)/9744(020 4)/ICC10-8843(0310)/8765(0609)/8591NY(0108)/20285(1014)/ICC1520285(0115)/20286(1014)/ICC15-20286(0115)/20803(0222)/ICC2220803(0222)/20804(0222)/ICC22-20804(0222), 20817(0622)/ICC2220817(0622) are underwritten by National Life Insurance Company, Montpelier, Vermont.
Accelerated Benefits Riders, form series 052(0798)/8095(0399)/8165(0703)/8766(0609)/ICC10-8844(0310)/20287(1014)/ICC15- 20285(0115)/20286(1014)/ICC15-20286(0115)/20805(0222)/ICC2220805(0222)/20806(0222)/ICC22-20806(0222)/20818(0622)/ICC22-20818(0622) are underwritten by Life Insurance Company of the Southwest, Addison, TX.

Accelerated Benefit Riders are optional, may be subject to underwriting, exclusions and/or limitations and may not be available in all states. Receipt of accelerated benefits reduces the Death Benefit and cash value (if any) otherwise payable under the policy, may be a taxable event and may affect your eligibility for public assistance programs, such as medical assistance (Medicaid), Aid to Families with Dependent Children, and Supplemental Security Income. Please consult your personal tax advisor to determine the tax status of any benefits paid under this rider and with social service agencies concerning how receipt of such a payment will affect you, your spouse and your family’s eligibility for public assistance. This rider is intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code (26 U.S.C. Sec. 101(g)). Whether such benefits qualify depends on factors such as your life expectancy at the time benefits are accelerated or how the benefits are used. There is no restriction placed on the use of the accelerated benefit with the exception of ABR proceeds for Chronic Illness in the state of Massachusetts which are defined as The necessary diagnostic, preventative, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance or personal care services that are required by a chronically ill individual and are provided pursuant to a plan of care prescribed by a licensed health care practitioner. The actual payment you receive will be less than the portion of the death benefit accelerated because the benefits are paid prior to death. Values are based on a current interest rate and mortality rates. There is an initial administrative fee at the time the rider is exercised. We currently limit the amount of death benefit that may be accelerated under all contracts made over the entire lifetime of the insured to $1,500,000 for terminal or chronic illness, and $1,000,000 for critical illness or injury. We reserve the right to change this limit in the future; however, the limit will never be less than $500,000. Other restrictions, limitations, and waiting periods may apply.

Our Terminal Illness riders allow for the payment of a portion of an insured’s death benefit, on a discounted basis, if the insured has an illness or chronic condition that can reasonably be expected to result in death in 24 months or less. There is no additional premium for this rider.

Our Chronic Illness and Covered Chronic Illness riders allow for the payment of a portion of an insured’s death benefit, on a discounted basis, if the insured is Chronically Ill. A chronic illness is defined as one that leaves you unable to perform, without substantial assistance, two of the six normal activities of daily living for a period of at least 90 days due to a loss of functional capacity or requires substantial supervision for 90 days to protect oneself from threats to health and safety due to severe cognitive impairment. The six activities of daily living include bathing, continence, dressing, eating, toileting, and transferring. There is no additional premium for this rider.

Our Critical Illness or Critical Injury Riders allow for the payment of a portion of an insured’s death benefit, on a discounted basis, if the insured is Critically Ill or Critically Injured. Covered critical illnesses are ALS (Lou Gehrig’s disease), Aorta Graft Surgery, Aplastic Anemia, Blindness, Cancer, Cystic Fibrosis, End-Stage Renal Failure, Heart Attack, Heart Valve Replacement, Major Organ Transplant, Motor Neuron Disease, Stroke, Sudden Cardiac Arrest. Covered Critical Injury illnesses are Coma, Paralysis, Severe Burns, and Traumatic Brain Injury. Covered critical illnesses and covered critical injuries may vary by state. There is no additional premium for this rider.

Our Alzheimer’s Disease Rider allows for payment of a portion of an insured’s death benefit, on a discounted basis, with a qualifying diagnosis of Alzheimer’s disease or Lewy Body Dementia, as determined by a Specialist. There is no additional premium for this rider.

Accelerated Benefits Riders (ABR) vs. Long-Term Care (LTC) Insurance

California requires advertising for ABRs to compare to the benefits provided by LTC insurance. However, Accelerated Benefits provided by the ABR riders are not long-term care insurance, and are not intended to be the same as, or an alternative to, long-term care insurance.

This is a life insurance benefit that also gives you the option to accelerate some or all of the death benefit in the event that you meet the criteria for a qualifying event described in the policy. This policy or certificate does not provide long-term care insurance subject to California long-term care insurance law. This policy or certificate is not a California Partnership for Long-Term Care program policy. This policy or certificate is not a Medicare supplement (policy or certificate).

ABR Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Receipt of benefits may reduce or eliminate the availability of other policy riders and benefits. Benefits available are calculated at time of claim based on the age of the policy and our expectation of your future mortality. The amount of Accelerated Benefit available will depend on your life policy’s death benefit value when ABR benefits are claimed. For policies in good standing, if ABR benefits are not used, policy death benefits and other rider benefits are still available.

Long-term care (LTC) insurance is not life insurance, and as such, has no death benefit or cash value. LTC insurance benefits are specified at the time of the contract. LTC benefits are paid as a form of expense reimbursement for qualified long-term care expenses. By comparison, since there is no restriction placed on the use of ABR benefits, they are paid once qualifications are met, and do not require you to provide receipt of specific expenses to qualify for the benefit. LTC premiums vary based on the level and length of benefit chosen by the policyholder. Premiums are paid on a recurring basis, and failure to pay premiums will generally lapse the policy. If LTC benefits are not claimed, they are typically forfeited. LTC insurance policies may offer non-forfeiture benefits for additional premium.

This is a solicitation of insurance. An insurance agent may contact you.

² 2024 Alzheimer's Disease Facts and Figures, https://www.alz.org/media/Documents/alzheimers-facts-and-fi gures.pdf, March 2024

³ Paying For Alzheimer's Care: Financial Help, Costs & Care Options, https://www.payingforseniorcare.com/memory-care, March 2024

⁴ The companies of National Life Group® and their representatives do not offer tax or legal advice. For advice concerning your own situation, please consult with your appropriate professional advisor.

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