Accelerated Death Benefit Option

Accelerated Death Benefit Option

The accelerated death benefit option is designed to respond to people's financial concerns while they are terminally ill. Under your basic and supplemental life insurance plans, you may be eligible to receive up to 50% of your coverage amount ($50,000 maximum) while you are living. You may not exercise this option if you have assigned the ownership of your life insurance. This benefit option is not available for dependent life insurance.

If you exercise this living benefit option and accept payments, you should be aware of the following:

• Some portion of the payments may be taxable income
• Your ability to receive certain government benefits or entitlements may be affected

You should seek advice from a tax advisor and/or attorney if you have any questions about how the election of this option may affect your personal tax situation.

Eligibility for Accelerated Death Benefits

You are eligible for accelerated death benefits if all of the following conditions are met:

• You request the benefit in writing while you are living (your legal representative may request it if you are unable)
• You are insured for at least $10,000 of basic and supplemental life insurance coverage
• You provide a doctor's statement that indicates the diagnosis of your medical condition and that your life expectancy is no more than six months (the insurance company reserves the right to investigate further to verify eligibility)
• You have written consent from any irrevocable beneficiary (if applicable), assignee, or your spouse if you live in a community property state

How Accelerated Death Benefits Are Paid

Accelerated death benefits are paid in one lump sum to you. How you use the money is completely up to you. Accelerated death benefit proceeds may be reduced if a reduction in coverage due to age would have applied to the amount of your employee term life insurance. In that case, the amount of living benefit proceeds you receive may not exceed the amount of insurance in force after applying the age reduction.

The rest of your life insurance benefits will remain with the plan and will be payable to your beneficiary upon your death. The remaining life insurance amount is subject to future age reductions. Premiums will continue to be paid on the full amount of your life insurance, including the accelerated death benefit.

You may not increase your life insurance amount after the insurance company approves your request for an accelerated death benefit. In addition, if you convert your life insurance at a later date, the conversion amount is reduced by any accelerated death benefit payment. If you recover from a terminal condition, you may not reinstate your coverage to its full amount.

Accelerated Death Benefit Limitations

Accelerated death benefit proceeds will not be payable if:

• The premiums have not been paid, or
• The terminal condition is directly or indirectly related to an attempted suicide or intentionally self-inflicted injury, whether sane or insane.