In the minutes, days and weeks following a cancer or severe illness diagnosis, the patient and their loved ones are faced with a series of almost unimaginable questions on everything from the minutest daily details to long-term planning for care and final expenses.
According to a Research Letter published in the Journal of the American Medical Association (JAMA) Oncology, and as reported on NPR, patients,”…even with insurance, spend about a third of their household income on out-of-pocket health care costs outside of insurance premiums.” And according to the Journal of National Cancer Institute, many cancer patients pay more than $10,000 per month for prescription drugs alone.
If you have a life insurance policy you have options that may assist you during this difficult time.
Accelerated death benefits
An accelerated death benefit is a clause added to many life insurance policies that give life insurance policyholders some cover in case they are diagnosed a other terminal condition. This benefit is mostly offered to permanent life insurance policyholders with death benefits of at least $25,000. Accelerated benefits is an excellent option for policy holders with life expectancies of 24 months or less.
Surrender of policy
Many permanent life insurance policies have cash accumulated in the policy. Policy owners have the option of paying their premiums with the existing cash in the policy or surrendering their policies for the cash value. Surrendering a policy is usually not the best course of action and should only be considered once its established that you cannot sell your policy for a higher value than the cash surrender value.
A life settlement is the sale of your existing life insurance policy at an amount higher than the cash surrender value. According to a 2014 London Business School Study, seniors who sell their life insurance policies in a life settlement transaction received on average more than four times the amount they would have received had they surrendered them for the cash value in the policies. Finding out the value of your policy is free and easy, simply complete this form to begin the process.
Viatical settlements, like life settlements, involve selling life insurance policies to a third party at a higher amount than the cash surrender value. This option is intended for individuals with a life-threatening terminal illness and a life expectancy of under 24 months. Policy owners stand to get more than 60-70% of the policy death benefit when entering into such a transaction. Notwithstanding, these settlements also have significant tax benefits and an accelerated underwriting process.
Certain policies are ideal candidates for policy loans. Creditors will loan policy owners at a 9% or higher interest rate before recouping the money when the death benefit is paid out. This option is limited and the types of policies available for policy loans are few and far between.
Defeating cancer or severe illness can be equal parts medical and mental and the peace of mind afforded by having a measure of control over one’s finances can be key as you and your loved ones face this significant challenge.
As with most things in life, answering the question, “Can I sell my life insurance?” begins with a conversation. Connect today with the caring team at Beco Life by completing this form. They can answer your questions and provide trusted advice on the paths available to you and your family during this difficult time.