Explaining the Death Benefit
Preserve Assets for the Client's Beneficiaries
Unlike the Medicaid Compliant Annuity, the state Medicaid agency does not need to be designated as a beneficiary of the Medicaid Compliant Group Life product. Therefore, the client can name whomever they wish to receive the death benefit. This allows for up to 100% of the client’s assets being transferred to their intended heirs.
Option One: Five-Year Payout
The death benefit is distributed in the form of a monthly payout over a five-year term, similar to a single premium immediate annuity. The annuity will earn interest, and the growth rate is determined by how long the life insurance policy is in effect before the owner passes away.
Premium Amount: $100,000.00
| Premium Amount | Length Policy is in Effect | Monthly Payout | Total Payout |
|---|---|---|---|
| $100,000.00 | 0-12 months | $1,670 | $100,200 |
| 12-24 months | $1,675 | $100,500 | |
| 24-36 months | $1,679 | $100,740 | |
| 36-48 months | $1,683 | $100,980 | |
| 48-60 months | $1,691 | $101,460 |
Note the total payout continues to increase as the length the policy is in effect increases beyond 60 months. For a full quote illustration, contact our office.
Option Two: Commuted Lump Sum
The other death benefit option is for the beneficiary(ies) to select a lump sum payout with a discounted value. The commuted amount is based upon current market rates and how long the policy was in effect prior to the owner’s passing. The below provides an example of what a commutation may look like, but please note it is intended for illustrative purposes only and does not reflect what the actual commutation may be as the discount rate may vary over time.
Premium Amount: $100,000.00
| Premium Amount | Length Policy is in Effect | Commuted Lump Sum |
|---|---|---|
| $100,000.00 | 0-12 months | $86,712 |
| 12-24 months | $86,972 | |
| 24-36 months | $87,188 | |
| 36-48 months | $87,404 | |
| 48-60 months | $87,837 |
Note the commuted lump sum continues to increase as the length the policy is in effect increases beyond 60 months. For a full quote illustration, contact our office.
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