by Life Credit Company | Mar 29, 2018 | Understanding Your Life Insurance Policy
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...
by Life Credit Company | Mar 15, 2018 | Understanding Your Life Insurance Policy
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 whether to get term insurance or whole life insurance, there are also a lot of factors to consider if you choose to use your 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...
by Life Credit Company | Mar 2, 2018 | Understanding Your Life Insurance Policy
Life insurance is typically considered something that assists people after death—however, permanent life insurance with living benefits can provide immediate, and significant, financial assistance to people in need. A living benefit rider can be written into a life insurance policy to allow the client to draw upon the policy’s cash value in the event of a terminal illness. What are the benefits of whole life policy with this option? Financial assistance: Mounting medical bills from serious illnesses like cancer can quickly bankrupt a patient. Future financial security: Taking care of debt associated with a medical crisis as it occurs helps families avoid years of complications. Peace of mind: Knowing that you can tap into the cash value of your life insurance policy may provide a needed sense of security in an otherwise worrisome time. Dignity: Having access to financial assistance means a patient with a terminal illness is able to control his or her final days. Stress reduction: Stress has been shown to increase a person’s risk for medical complications, so someone fighting an illness can benefit physically from being able to proactively manage finances. There are life insurance advantages and disadvantages, however, as not all plans offer the living benefit option. For instance, if you’re considering what are the benefits of term life insurance, it’s important to note that term policies don’t allow policyholders to draw on the cash value during life, as they’re only available for a certain length of time. That’s where Life Credit’s Living Benefit Loans can come in. The benefits of this program include: Financial help, regardless of policy: Life Credit provides loans no...
by Life Credit Company | Feb 13, 2018 | Understanding Your Life Insurance Policy
If you have been diagnosed with cancer or another serious, terminal medical crisis then you know preparing for your financial future involves many challenges. You may have thought of creative ways to spend your savings, taken a closer look at your annuities and investments, and even explored cashing out your life insurance policy. But, can you cash out a living benefit option on annuities and receive immediate cash assistance for cancer treatment and at-home medical care? Or, do you qualify for a cancer loan using your death benefit on your life insurance plan? You may be considering a number of add-ons and riders in your life insurance policy or annuities. Can I get Cash for Cancer Treatment Using my Annuity’s Living Benefit Option? An annuity is a collection of investments, which can often be diversified to maximize the returns. As part of the portfolio, an annuitant may be able to opt for a living benefit, meaning he or she can draw cash from the value of the annuity if needed. If you are considering borrowing from your annuities and use it as financial assistance for cancer treatments or care, there are a few things to consider: Value of upfront investments – A policy holder must invest a certain amount in order to guarantee he or she will receive a set living benefit, no matter how the investments perform, which may require a significant amount up front. Costly Fees – Most annuities charge fees for choosing the living benefit feature, which may be paid on a yearly, quarterly or monthly basis, depending on the agreement. Incremental Financial Payout – Living...
by Life Credit Company | Jan 25, 2018 | Understanding Your Life Insurance Policy
When it comes to choosing a life insurance policy, there are a dizzying number of options. Prospective policyholders have to consider everything from group vs. individual and term vs. whole, depending on personal circumstances. Additional, customizable options are also available in the form of benefit riders. Insurance benefit riders are, most simply, add-on elements to an insurance policy that can be invoked throughout the duration of the policy, depending on individual situations. For instance, those in need of finances for cancer patients may be eligible for living benefits, if the policyholder added such a rider to the policy. Most Common Benefit Riders Used For Cancer Treatment Funding Accelerated death: This worst-case scenario option typically is provided in the case of a terminal illness, in which the policyholder is not expected to live more than two years.If eligibility requirements are met, the accelerated death benefit rider usually allows the individual to access cash advances from their death benefit. Though it can provide funding to help a person live out his or her final days comfortably, it will reduce the amount left to beneficiaries’, which is a consideration. Accidental death: Insurance companies often offer the option for an accidental death rider, which provides added money on top of the standard death benefit if the policyholder dies of a non-medical cause. Such riders can be used in the case of a car accident or a slip and fall. Disability income: This add-on allows for monthly payments from the insurance company if the policyholder becomes permanently disabled. Cancer treatment funding could be accessed through this type of rider, depending on the person’s prognosis....
by Life Credit Company | Jan 18, 2018 | Understanding Your Life Insurance Policy
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. Can Your Life Insurance Policy Help You Access Cash Fast? Know what type of life insurance policy you have. Term life insurance protects the holder for a set number of years. 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 life insurance policies cover a person throughout his or her entire life, builds cash value, 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. Find out if your policy has a cash value. If you are considering a payout from your life insurance policy, then you must the policy must have cash value. A whole life insurance policy it is likely you have build up a cash value. Check your policy for an accelerated death benefit rider. 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...
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