If you're eligible to elect this added coverage, you probably should. A 1996 change in the Internal Revenue Code allows life insurance plans and policies to provide for accelerated death benefits to a person who is chronically or terminally ill. This benefit could be a source of funds to individuals or families without other resources. The accelerated death benefit wouldn't be subject to federal income tax. These plans wouldn't ordinarily pay benefits to people with disabling diseases.
Some plans provide, or permit the employee to elect, life insurance for spouses or other dependents.
Dependent life policies almost always contain a conversion privilege. Because you may become more reliant on your spouse, you should request information on, and seriously consider whether to exercise, any available conversion privilege. You should compare the cost of the conversion policy against the cost and availability of a new life insurance policy. Defined-benefit pension plans promise to pay a fixed, monthly benefit beginning at retirement and continuing for the duration of your life. Such a plan may provide for other payout forms, such as a lump sum, and generally provide benefits to a participant's surviving spouse.