Learn about financial help for cancer patients, life insurance loans, borrowing against your life insurance death benefit, viatical settlements, and many other topics. Life Credit Company thrives on being your resource when it comes to financial help for cancer patients.
Like with any loan program, borrowing against life insurance can sometimes make people wary, as they worry about taking on more debt. While mounting debt is certainly an issue that can impact some people negatively, loans themselves don’t have to necessarily be risky—and can actually be productive. Particularly when it comes to one’s own investments, such as lending against life insurance policy, being able to draw value on that product to combat other debts is a sensible and practical approach. If you’re weighing whether to borrow against life insurance, you first need to have life insurance explained in a way that makes sense for your particular situation. Many people anticipate only using the death benefit of their life insurance policy after their death, to help pay for final arrangements and take care of their loved ones. However, if a financial crisis arises, such as a cancer diagnosis, life insurance can be a logical source of income: Policyholders may have paid into the plan for decades and, by drawing on its value, they can address pressing, and often quickly escalating, financial needs to improve their quality of life and possibly even their prognosis. So what happens when you borrow from life insurance? There are pros and cons of life insurance loans, depending on the program. Like most loans, life insurance loans typically involve interest, so policy holders will have to pay back the debt, along with the added interest, to regain control of the policy. However, the benefits that life insurance loans—both immediate and long-lasting—bring can far outweigh whatever interest the policy holder incurs. Having the ability... read more
Just how much does cancer cost? It’s difficult to pinpoint, but what is easy to determine is that cancer can be extremely expensive, even financially toxic for some people. The Cancer Action Network estimates that the 2014 cost of cancer care in the United States was a staggering $87.8 billion, a number shared by patients, employers, insurance companies and public programs. CAN notes it’s difficult to put a price tag on the individual costs of cancer because there is so much variation in treatment methods and insurance options, but out-of-pocket expenses may easily exceed $200,000, according to the organization’s cancer treatment cost statistics. Forbes estimates that the average cost of cancer treatment was equal to about 11 percent of patients’ income in the United States. Where does all the money go? There are a number of things that drive expenses, such as high prescription costs, copays for doctor visits, exorbitant costs of treatments like chemotherapy and hospital fees for surgery. Then there is the indirect, and often unexpected, cost of cancer care. Expenses like childcare, mental-health treatments, transportation to appointments, lost income from reduced working hours and potentially a job loss all add onto the cancer treatment cost, and can significantly overwhelm patients. Financial Help For Cancer Patients Some may be so eager for quick cash that they decide to sell their life insurance policy in what is called a viatical settlement. Such an agreement involves the transfer of a policy to a third party for less than what it is worth, with the policyholder able to use the lump sum proceeds to address his or her immediate financial needs.... read more
When facing mounting debt, some people may begin to explore the best way to convert life insurance into income. This is a challenge frequently encountered by those grappling with a medical emergency, such as cancer. Income for cancer patients is often sorely needed. When someone is undergoing cancer treatments, he or she may not be able to work or may have to work fewer hours, leading to reduced pay, which can make paying necessary bills like mortgage or rent a major roadblock. On top of shifting lifestyle changes, cancer and other medical conditions often come with hefty price tags. From treatment to medication and everything in between, patients facing serious illnesses are also likely facing serious costs. That’s why some searching for ways to generate money for cancer patients may turn to life insurance. Life insurance is generally considered a way to protect one’s assets and beneficiaries after death, but in some cases, its value can be maximized while a person is still living. Some insurance companies allow for an individual to draw cash advances from the amount they have paid into a policy in case of emergency, such as if he or she is facing a terminal illness. However, the type of policy is key, as such an allowance is typically only used for permanent, or whole, policies. Policyholders can consider converting term to whole life in order to access funding for cancer patients, though that approach can have some drawbacks, such as higher premiums, which can be an obstacle for those already dealing with increased medical costs. Life Credit takes a different approach with loans that allow... read more
Life insurance is traditionally understood as helping people plan and prepare for the end of their lives. Many policyholders aim to use the amount of their plan to help beneficiaries pay for things like funeral costs, to settle final arrangements or to help reduce debt once they have passed. However, after the lifelong investment that many sink into a plan, they should be able to use the value whenever they need it and, that’s where a death benefit rider may come in. How Does a Death Benefit Rider Work? A rider functions like an add-on to an insurance plan, allowing the policyholder to opt for certain protections that are customized to his or her particular situation. There are different forms a death benefit rider can take, but many center on giving the individual access to the cash value of his or her insurance plan while he or she is still alive. For instance, an accelerated death benefit generally enables policyholders who have been diagnosed with a terminal illness to draw cash advances against the value of the death benefit. Another option is the enhanced death benefit, which pays out the highest investment gain the policy attained, even if the market value is less. Those with a variable annuity death benefit may be able to attach riders to enable cash advances and a payout that is higher than the minimum. Pros and Cons of Death Benefit Riders Death benefit riders can help policyholders customize a plan that makes sense for them; however, there are some factors to consider. Riders do increase the cost of a plan, which could be a... read more
If you’re looking to sell your life insurance policy, you have likely encountered the concept of a viatical life settlement. While such a life settlement can provide quick cash, it does so at a cost—and for some, that price may be too high. What is a Viatical Settlement? Weighing the pros and cons of a viatical settlement first comes down to understanding what it is. A viatical settlement involves the sale of a life insurance policy to a third party. This type of life settlement typically occurs when a person is facing a terminal illness and would rather have a lump sum of money from his or her life insurance while still living, as opposed to passing the death benefit down to a beneficiary. This arrangement, also called a senior settlement, usually results in a payment that is higher than the cash value of the policy, yet less than the death benefit. Essentially, the policyholder is compromising on the policy’s value in order to be able to get a rapid payoff. Often, such money may be needed to ease the burden of medical bills, or could even help a person live out his or her final months in comfort. However, a viatical settlement isn’t the only option for those looking to draw value from a life insurance policy. What Other Options Are There? Loans on life insurance can also provide financial assistance to cancer patients and others in need. Such options, however, don’t involve the full surrender of a life insurance policy, but rather a temporary transfer, which means the holder and his or her family can ultimately regain... read more
When you purchase life insurance, you typically do so to prepare for after your death. However, an insurance policy is an owned entity and, as such, can be sold or used as collateral for a loan in order to provide cash value to someone in need. Just as there are many questions when considering which type of life insurance to get, there are also a lot of factors to consider if using that policy to access the cash you’ve invested in it. It’s important to understand terms like absolute assignment and collateral assignment, as well as weigh the differences in order to satisfy your particular financial needs. What is absolute assignment of life insurance? Absolute assignment in insurance involves signing over your entire policy to another person or entity. The person who is selling or gifting the policy is known as the assignor, and the individual or individuals who receive it are the assignee. The assignee takes full ownership of the policy, being held liable for any premiums and also having the authority to change or designate new beneficiaries. What is a collateral assignment of life insurance? Collateral assignment of life insurance essentially works like a standard loan. The insurance policy is “collateral” for a loan, and the person or organization that pays out that loan is the temporary beneficiary of the policy’s death benefit until the loan is repaid. The entity taking over the policy does so on a conditional basis and, therefore, doesn’t have the authority to make changes to it, re-sell it or take any of its cash value. Instead, the assignee can only draw on... read more