How much money can you access?
Once eligibility requirements are met, and subject to policy limits, the benefit payment is 10% of the policy’s face amount or $25,000, whichever is less. Your insurance professional or our team of life insurance specialists can help you better understand the coverage available on your specific Nationwide policy.
What can you use the money for?
Because Nationwide doesn’t place restrictions on how the benefit is utilized, you can use critical illness coverage to pay for anything you need, including:
- Medical bills
- Co-pays
- Deductibles
- Transportation expenses
- Even non-medical-related services while you heal (such as yardwork, child care, pet care, grocery/meal delivery or in-home care)
Are there any tax implications?
The death benefit, or the payout from your life insurance policy, is not taxable (subject to Internal Revenue Service limitations). However, it’s always a good idea to consult with a tax advisor about your specific situation.
Will you have to pay it back at any point?
No. The amount that you access is removed directly from your death benefit. However, for every dollar taken out, the death benefit will be reduced by more than one dollar because of a reduction factor.
Who needs critical illness coverage?
Critical illness coverage is automatically included on most life insurance policies. It’s for people who may experience a medical emergency and need help paying medical costs. There are some product and personal eligibility requirements, though:
- It’s not eligible on 10-year term life products
- There are certain underwriting restrictions
- You must be under age 55
What else should you know?
In addition to the payout being taken from your death benefit at a more than dollar-for-dollar reduction, there’s also a $250 administrative fee. You’ll receive a snapshot of your policy before and after your claim, so you’ll know upfront what impact to expect.
Life insurance is meant to help you and your family feel confident that they’ll be protected if the unexpected happens. Critical illness coverage allows you to cash in life insurance while still alive for an added layer of protection.
