by Life Credit Company | Apr 3, 2019 | Understanding Your Life Insurance Policy
If you’re facing a financial crisis because of a medical diagnosis, you may be considering selling a life insurance policy. On the surface, this option may seem like the right path, if you can net enough money to pay your bills and live out the rest of your days without focusing on finances. However, for those with terminal illnesses, selling a life insurance policy through a process known as a viatical settlement can have many unintended side effects — putting your financial health, and that of your family, at risk. So just why are viaticals a bad investment? Here are three of the primary reasons to steer clear of these settlements and consider instead options like LifeCredit’s Living Benefits Loans, in which you simply borrow against — and not sell — your life insurance policy. 1. Jeopardizing Your Finances When you enter into a viatical settlement, you’re selling a life insurance policy for less than it’s worth. You’re not only cheating yourself out of that money you deserve but you may also be jeopardizing your current income. Because of the influx of cash, you may be cut off from income-based benefits like Medicaid — again, these are benefits you deserve and have paid into; however, the viatical settlement may mean this income that you likely count on could end. Additionally, you will have to pay taxes on the amount you receive in the viatical settlement, which could significantly reduce the total. 2. A Gamble with Time Those who are considering selling a life insurance policy may have received a terminal diagnosis and are likely scrambling to get their affairs...
by Life Credit Company | Aug 30, 2018 | Understanding Your Life Insurance Policy
Health insurance for cancer patients can be one of the most significant factors that determines a person’s prognosis. It is an unfortunate reality that cancer is costly; even with a good insurance plan, cancer patients can face steep co-pays, treatment costs, and medication prices. However, health insurance can defray exorbitant out-of-pocket expenses to a degree. Research has shown that financial concerns can discourage some patients from seeking proper care, or cause them to be non-adherent to their medication regimen, putting their health and recovery at risk. While it’s a necessary part of care, understanding health insurance can seem like yet another challenge for cancer patients who already have so many other decisions and details to sort through. To ease that burden, here is a rundown of the steps cancer patients should take to ensure they’re making the most of insurance. Get insured: If you don’t have health insurance, the very first action you need to take after a diagnosis is to enroll in a plan. Visit the federal healthcare site to learn about the private and public plans that are available. If your or your spouse’s employer offers insurance, a cancer diagnosis typically will be considered a qualifying life event, so you can enroll in a plan outside of typical enrollment periods. Other options include Medicare, generally applicable to those over 65, and Medicaid, for low-income or disabled individuals. Stay insured: Cancer treatments may necessitate your taking time off of work or could even result in the loss of a job. Prepare ahead of time. The COBRA program provides temporary insurance coverage, often used by those whose employers discontinue coverage during a leave. Get informed: Learn about your...
by Life Credit Company | Jun 14, 2018 | Understanding Your Life Insurance Policy
Claiming life insurance death benefits can be a lifesaving option for a person’s family after he or she passes away and can even be beneficial for the policyholder while he or she is still alive. When selecting a life insurance policy, it is important to consider the pros and cons of each option, especially the policy’s death benefit. Death Benefit Pros Death benefits are generally designed to help a policy holder’s beneficiaries pay for his or her final arrangements, to settle debts and, in some cases, to help them save and build wealth. Some policies also include the option of claiming life insurance death benefits through loans while the individual is still alive. That can be an effective way of paying down debts and confronting financial emergencies, such as cancer or other critical medical conditions. Death Benefit Cons Death benefits vary greatly depending on the individual’s policy. For instance, term policyholders generally cannot draw on their benefits while they’re still alive. Those who want that option would need to invest in a whole or permanent life insurance policy, which is generally more expensive as it lasts throughout the duration of an individual’s life. That means higher premiums each month, which can be challenging for many, especially those who are just starting out. Another Option Those considering the best options for claiming life insurance death benefits can also explore avenues like Life Credit’s Living Benefit Loans. This program allows policyholders—regardless of whether they have term or whole life insurance—to borrow against their policy’s death benefit to address immediate financial concerns. Individuals can receive up to half of their death benefit,...
by Life Credit Company | Jun 7, 2018 | Understanding Your Life Insurance Policy
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...
by Life Credit Company | May 24, 2018 | Understanding Your Life Insurance Policy
If you’re considering investing in life insurance, one of your first decisions is likely term insurance vs. whole life insurance. The type of insurance you choose will dictate the level of protection you get, and for how long, so it’s important to understand which policy fits best for your individual situation. What is the Difference Between Term and Whole Life Insurance? There are a few key differences between term and whole life insurance, including: Length of coverage: Term policies only offer death-benefit coverage for the policyholder for a set number of years, while whole life, instead, extends through the person’s death. Whole life insurance typically provides both a death benefit and a cash savings, where term does not accumulate cash value. Premiums: Because whole life has a longer coverage period, monthly premiums may be higher than those associated with term policies. Living death benefit: Many policies only allow clients to add a rider such as a living death benefit—which enables the person to draw cash from the policy in the event of a terminal illness—to a whole life policy. Life Credit’s Living Benefit Loans, however, allow policyholders to borrow against the death benefit of both term and whole life policies. Term Insurance vs. Whole Life Insurance So which type of policy is better? It largely depends on a person’s unique situation. Term insurance is often a good fit for younger individuals, who want to protect their families in the event of an unexpected loss, all at a price that doesn’t break the bank. However, when the term finishes, the policyholder will lose protection, which can be a...
by Life Credit Company | May 10, 2018 | Understanding Your Life Insurance Policy
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...
Recent Comments