Long Term Care Insurance and Linked Life Insurance

A life insurance policy with a 101g rider is a life insurance policy that has a feature that allows you to accelerate some or all of the death benefit if you become chronically ill¹⁴. 

A chronic illness is defined as a condition that prevents you from performing at least two activities of daily living (such as bathing, dressing, eating, etc.) or causes severe cognitive impairment (such as Alzheimer's disease)⁴. The accelerated death benefit is paid to you tax-free if you meet the criteria for chronic illness and the physician certifies that your condition is likely to last for the rest of your life¹⁴.

Some advantages of a life insurance policy with a 101g rider are:

- It can help you pay for your long-term care expenses without having to buy a separate long-term care insurance policy² .

- It can provide you with a lump sum or a monthly income that you can use for any purpose, not just for long-term care² .

- It can reduce your premiums compared to a life insurance policy with a 7702b rider, which is another type of long-term care rider that has more stringent requirements and limitations² .

Some disadvantages of a life insurance policy with a 101g rider are:

- It can reduce the amount of death benefit that your beneficiaries will receive after you die, since the accelerated amount is deducted from the original face value² .

- It can limit your eligibility for claiming the benefit, since you have to be diagnosed with a non-recoverable chronic illness that is expected to last for your lifetime²⁴.

- It can cap the amount of benefit that you can receive per day or per year, based on a percentage of the death benefit or an IRS limit¹⁴.

A life insurance policy with a 101g rider is not for everyone. It may be suitable for people who want to have some protection against the risk of chronic illness, but also want to keep their premiums low and their flexibility high. However, it may not be enough for people who need more comprehensive and guaranteed long-term care coverage, or who want to preserve their full death benefit for their heirs. 

You should compare different options and consult with a professional insurance advisor before deciding whether a life insurance policy with a 101g rider is right for you.

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(1) Covering the costs of long-term care. https://portal.equitable.com/appentry/EDoxRedirect?node_id=61772307.

(2) Long Term Care vs Chronic Illness - NAHU. https://nabip.org/media/2826/long-term-care-vs-chronic-illness.pdf.

(3) Covering the costs of long-term care: 7702B vs. 101(g) - Equitable. https://equitable.com/selling-life-insurance/learning/long-term-care/ltc-vs-chronic-illness-white-paper-7702B.

(4) Purchasing a Long-Term Care Rider: What to Know | Kiplinger. https://www.kiplinger.com/article/insurance/t036-c032-s014-purchasing-a-long-term-care-rider-what-to-know.html.