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after a cancer diagnosis

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.

Life Settlements

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

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.

Policy Loan

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.

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What is a viatical settlement?

Diagnosis with a terminal illness sends reverberations far and wide through an individual’s life. Often, such shocking news is accompanied by uneasy thoughts regarding financial stability. A viatical settlement may provide an opportunity to alleviate those concerns in order to focus one’s time on truly important, quality of life issues like family, faith and near term health.

Simply put, a viatical settlement is the sale of an individual’s life insurance policy to a third party at a price higher than the cash surrender value of the policy. In this sense, it is similar to the more common life insurance settlement, but there are potentially positive tax implications that separate a viatical settlement from a life insurance settlements. These benefits are triggered when an individual is diagnosed with a terminal illness and expected to live for two years or less.

THE FIRST VIATICAL SETTLEMENT TOOK PLACE OVER 100 YEARS AGO

In 1911, the same year Ronald Reagan, Tennessee Williams, and Roy Rogers were born, the first viatical settlement was agreed upon and in the century since thousands have taken advantage of this opportunity to receive a lump sum payout for their life insurance policy.

 

WHY DO INDIVIDUALS CHOOSE VIATICAL SETTLEMENTS?

Reasons for choosing to sell a life insurance policy are varied, but many fall under a few key categories and/or correlate with specific life events.

 

End of life care

The cost of care at the end of one’s life can be sizable, and for many, it represents a burden on loved ones that is undesirable.  A lump sum payout can be used to cover expenses, ensuring peace of mind.

 

No heirs

Any number of life circumstances can leave individuals at the end of their lives with no heirs.  A viatical settlement may allow them to better manage their legacy and make gifts that expressly align with their goals and intentions.

 

Relieve the burden of monthly premiums

A viatical settlement eliminates the need to continue to pay monthly premiums (which can be a financial as well as an organizational challenge during this time).  Completing the life insurance process in this way allows for a more managed approach.

 

Fund memories

A viatical settlement provides you with the opportunity to build fond memories with your loved ones. Take the entire family to Disney World. Take your children to see the country of their ancestors.  Free yourself to enjoy the time you have – go out and live life!

 

ARE THERE TAX BENEFITS?

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 made payments from Viatical Statements income tax-free for terminally ill individuals.  This piece of legislation was welcomed news and has led to an increase in interest in these types of financial transactions.  Your specific eligibility should be discussed with a professional advisor, like the ones at Beco Life.

 

WHERE DO I BEGIN?

We understand discussing viatical settlements is not easy, but at Beco Life we approach these discussions with honest compassion and a desire to help our clients maximize the time they have to spread joy and build memories with family.  Call us at Beco Life at (443) 379-0190 or email hello@becolife.com.

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Simply put, a life settlement is the sale of an individual’s life insurance policy to a third party at a price higher than the cash surrender value of the policy. For many, a life settlement provides a welcome influx of cash, unlocking opportunities to improve medical care, address specific financial concerns and control expenses while on a fixed income. Some even use the opportunity to make memories with family, on trips of a lifetime or with meaningful gifts of time and resources.

Life settlements, and the market that supports them, have been around for over 25 years and have gone a long way towards tipping the balance of power back towards the consumer when it comes to life insurance. Many financial advisors and estate planners are still unaware of the opportunities life settlements can provide, but research (and thousands of satisfied consumers) can attest to the power of these financial transactions.

WHARTON RESEARCH STUDY FINDS POSITIVES IN LIFE SETTLEMENTS

A 2002 academic study performed by Neil Doherty and Hal Signer at the University of Pennsylvania’s highly influential business school, the Wharton School, highlighted the potential for life settlements to make a significant positive impact for consumers. In a paper entitled “The Benefits of a Secondary Market for Life Insurance,” Doherty and Signer found that “…life settlement providers paid approximately $340 million to consumers for their underperforming life insurance policies.” Simply put, the emergence of a market provided (and continues to provide) policy holders with an option to better control their financial situation.

WHY DO INDIVIDUALS CHOOSE LIFE SETTLEMENTS?

Reasons for choosing to sell a life insurance policy are varied, but many fall under a few key categories and/or correlate with specific life events.

Fund Assisted Living or Home Health Care

The cost of care as we age is an often unplanned for expense. A life settlement can help fund your care or for that of a loved one including facilities, medical expenses, home health and hospice care.

Relieve the burden of monthly premiums
After a certain age, term life insurance premiums become unmanageable for people living on fixed incomes. That is one reason so many policies lapse each year rather than reaching full payout. Imagine not having to pay those premiums every month.

Get back money from past premiums
Life settlements enable you to recover some of the money you’ve paid in over the years instead of simply letting the policy go.

Give gifts to family
A life settlement provides you with the opportunity to build fond memories with your loved ones. Take the entire family to Disney World. Buy an RV and tour the nation for the summer with grandchildren. Take your children to see the country of their ancestors.

Emergency Funds
Emergencies happen – even after retirement. Sometimes people need to liquefy assets fast in order to gain access to cash. In these instances, life settlements can provide a quick and large influx of cash.

Tax benefits
Life settlements are only taxed on the amount above and beyond what you’ve paid in premiums, and even that is taxed at regular income tax rates rather than as capital gains. Consult your tax professional on your specific tax situation.

WHERE DO I BEGIN?

If you are over 65 and have an existing policy you no longer need, contact Beco Life at (443) 379-0190 or complete this form on our website. One of our Life Settlement experts will contact you to discuss the specifics of your situation and offer you a free quote on your existing policy.

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