what does the guaranteed benefit mean?
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My company offers voluntary life insurance. I don’t understand the terms. It shows an employee benefit of 50,000 and 12.65 a day. It shows a maximum benefit of 500,000 and a spouse maximum benefit of 500,000. It also shows a guaranteed benefit of 200,000. I don’t understand how all this works. Can you help me?”
Asked August 21, 2017
Your company is giving you the option of buying supplemental life insurance coverage. They will pay for basic coverage and you will be responsible for the remainder of the premium. Your acceptance is guaranteed.
The $50,000 is the minimum amount of additional coverage you can apply for. Your beneficiary will receive a $200,000-$500,000 payout after your death. They are guaranteed $200,000 regardless of your health status.
Verify whether your designee can request a lump sum payment or an annuity agreement. Is the policy portable, meaning if you change jobs does the contract remain in place as long as premiums are paid?
Should you need the payment during your lifetime acceleration of the payout is possible. One scenario is long term care (LTC), the policy will pay a daily maximum amount of $12.65. This amount will increase yearly, typically by 5%.
If your are choosing the largest amount of coverage, provide evidence of insurability or a statement of health. This documentation will qualify you and/or your spouse for the policy amount.
Hope this answers your question. Consultation with an insurance or benefits professional is a good plan.
Answered August 28, 2017 by tim