Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, April 16, 1991                   TAG: 9104160608
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/1   EDITION: EVENING 
SOURCE: FRED BAYLES ASSOCIATED PRESS
DATELINE:                                 LENGTH: Medium

LIFE INSURANCE CAN PAY FOR LIFE-SAVING TRANSPLANTS

Then she remembered the life insurance policy she had bought. Under a new provision, she could tap into its benefits before she died in order to live.

"If it weren't for the policy, I would be dead by now," she said. "I wouldn't have had the transplant because I couldn't pay for it."

Shelby, 59, of Decatur, Ill., was the beneficiary of a quiet revolution in life insurance.

Traditionally, policies paid out benefits after a policyholder died. Now many insurers give the money to customers before they die, to help pay for a transplant, finance nursing home costs or provide money to ease the final months of AIDS or cancer.

The American Council of Life Insurance says at least 70 insurance companies offer life insurance products that also cover catastrophic health care.

A major impetus of change came last year when the Prudential Insurance Co. of America announced that all its 3 million policyholders could collect their own death benefits if they were terminally ill or permanently confined to a nursing home.

Some insurers already were selling such coverage as riders to life insurance policies at an additional cost. Prudential was the first major insurer to offer it free as a standard feature in a regular life insurance policy. Other companies jumped into the market.

Although insurers have done little advertising while awaiting regulatory approval, consumers have responded, especially those not usually interested in life insurance.

John Hancock Mutual Life Insurance Co. has seen a doubling of demand for its "living-care benefit" in its second year on the market. The plan is sold as a life insurance rider that provides money for long-term care.

"The need is becoming more and more obvious to younger and younger people," said Holly O'Toole, brand manager of life insurance at John Hancock. "Younger people are aware of many examples of the financial effects of long care needs."

Prudential President Ron Barbaro first explored accelerated benefits as president of the company's Canadian subsidiary. While working as a volunteer at an AIDS hospice, he saw that one tragic side of terminal illness was the poverty it often caused its victims.

He approached his company with the idea that death benefits might be paid early in order to lessen the burden of the dying.

"I was told 100 reasons why we couldn't do it," he said. "I kept boiling it down to reasons why we could do it."

Now Prudential allows policyholders to dip into death benefits to pay for life-saving transplant operations. For Janet Shelby, the option permitted her to take $93,500 on her $100,000 of insurance coverage. While Prudential doesn't raise premium costs for the option, it deducts six months of interest from the policy's value.