From grants to loans and everything in between, financial options for cancer patients are wide-ranging, and widely needed.
As medical bills mount and working hours are restricted, cancer patients and their loved ones often start exploring ways to stabilize what can be shaky financial footing. One option that can be complex, yet valuable, is a life insurance policy.
If you’ve begun researching whether you can cash out of term life insurance as a cancer patient, chances are you’ve gotten a number of answers. There isn’t a simple response, though there are a number of conditions, as well as many factors to consider.
First, it’s important to understand the difference between the leading types of life insurance, term and permanent.
- Term: This policy protects the holder for a set number of years, such as 10 or 20. The individual pays premiums during that time and, should anything happen to him or her in that timespan, the policy holder’s beneficiaries would receive an agreed-upon benefit. However, if the person lives past that expiration date, the coverage stops and the holder receives no benefit.
- Permanent: As the name suggests, this policy covers a person throughout his or her entire life, and pays out a lump-sum benefit upon his or her death. It often requires a larger investment than a term policy but comes with the guarantee of a payout.
With financial toxicity a serious threat of cancer, there is a real need for financial assistance for cancer patients. A number of options exist for those who are considering tapping into term life insurance policies.
There are Financial Options for Cancer Patients
Some insurance companies will allow for cash advances, also known as an accelerated death benefit, in which a portion of the person’s death benefit is paid out while he or she is still living. Such an option often requires a terminal prognosis and other eligibility factors. The availability of such programs also depends on how the policy itself is written.
Insurance companies may also offer the opportunity to borrow against your death benefit in the form of a loan. This route can provide emergency financial assistance for cancer patients, though patients should think seriously about the implications for their beneficiaries, who would be responsible for repayment should he or she pass before the loan is repaid.
Third-party organizations like Life Credit Company also offer the opportunity to draw against a policy for cash assistance. Living benefit loans let cancer patients tap into their policies quickly and smoothly to access funding that can be used for a range of vital needs.
Life insurance is an investment that you may have paid into for years, so shouldn’t you be able to access it when you’re in a pinch? There are a number of ways to do this, and the right route requires some open conversations with your health-care team, financial advisors and loved ones. A smart financial plan can help you navigate the often-costly journey of a cancer diagnosis so you can concentrate on preparing for the future.