Terminal Illness Benefits <> Death Benefits

[Take 2]

If a life policy permits terminal illness benefits, are they accounted for as death benefits?

[Car'a'carn]

If a life policy permits terminal illness benefits, are they accounted for as death benefits?

Yes. It is processed as a loan* and the payoff value is subtracted from the DB.


*At least this is how it is done here.

[Take 2]

Yes. It is processed as a loan* and the payoff value is subtracted from the DB.


*At least this is how it is done here. So which jurisdictions does here cover?

[Car'a'carn]

So which jurisdictions does here cover?

Sorry. Here is the company I work for.

[JMO Fan]

Yes. It is processed as a loan* and the payoff value is subtracted from the DB.


*At least this is how it is done here. This generally seems the most reasonable treatment, even if no interest is charged on the acceleration.

There are a few "accelerations" that are true additional benefits with their own ongoing premium charges, e.g., long-term care. Those seem more appropriately treated according to the benefit provided. (This wouldn't include LTC via reduction in death benefits.)