Issue link: http://clhia.uberflip.com/i/405151
32 TODAY'S WORLD - TODAY'S NEEDS Many people suffering from a lengthy and terminal illness, such as AIDS or cancer, find themselves financially strapped to cover the growing expenses of care and infirmity, especially if they do not have adequate disability insurance. Life insurance companies have responded to this need by making it possible for the terminally ill to receive a partial pre-payment (called living benefits or accelerated benefits) of the death benefit from their existing life insurance policies. Guidelines vary from company to company, but, typically, a percentage of the death benefit up to a certain limit is allowed. A claim must be accompanied by medical documentation that the life insured is terminally ill. Sometimes a release from the beneficiary acknowledging the pre-payment is also required since it will reduce the amount he or she gets. Living benefits The primary reason for life insurance is to provide income to those who would suffer financially from the life insured's death. That means having insurance on the breadwinner(s) is the priority. It is unusual for a child to be an important source of family income. Some parents arrange to have a small amount (e.g., $5,000) of insurance on each child through a rider on their personal insurance or by taking dependent insurance through their group insurance at work. Other parents choose to take out a separate policy insuring the child. It gives the child a head start, at low premiums, on what will be one of the cornerstones of his or her financial portfolio as an adult. And if the policy has a guaranteed insurability rider, the child will be able to purchase additional insurance in the future, regardless of disability or illness. Life insurance on children