Many cancer patients are facing significant financial burdens, and a life insurance payout for cancer patients can be one way to overcome some of those obstacles. Whether or not you can cash out your policy may depend on the type of life insurance you own – term or whole – and if you have accumulated cash value throughout your life.
Can you cash out a term life insurance policy?
Term life insurance policies do not accumulate cash value. A term life insurance policy provides an individual with coverage for a set number of years. At the end of the time period, coverage is suspended and the policyholder cannot draw on any of the premiums he or she paid throughout the duration of the policy. Although this type of insurance will pay a health benefit to the beneficiary, a term life policy holder cannot borrow money from the policy.
Can you cash out a whole term life insurance policy?
A policyholder can withdraw cash from a whole life insurance policy. A policy’s value grows as the individual pays the agreed-upon premiums. A portion of the premiums goes toward the death benefit, which will be paid out to survivors when the policyholder passes away, and a portion will accumulate to build the cash value of your life insurance policy. Your life insurance policy’s cash value can help you confront a medical crisis, but it is important to understand how your cash value accumulates and what happens after a policy payout. The cash surrender value is often lower than the actual cash value of the policy when they decide to payout or sell their life insurance policy. If you are handling cancer or another serious medical issue you may settle for this option in order to get a quick cash payout to help pay for medical treatments and other indirect costs that occurs after cancer diagnosis.
Is there an alternative to Life Insurance Payouts
Life Credit takes a different approach and is an alternative to a whole life cash payout if you get cancer. A Living Benefit Loan program allows cancer patients and terminally ill borrow up to half of their life insurance policy’s death benefit. You do not need to sell your life insurance policy and surrender your cash value. While a quick cash payout is tempting, options like Life Credit allow policyholders to both address their immediate financial concerns and still protect themselves and their beneficiaries in the long term.
Contact us to learn how Life Credit’s Living Benefit Loans can help you manage medical emergencies and pay for high-cost treatments, Borrow against your policy’s death benefit and live your life with less financial burden. Call us at 888-274-1777.