Terminal Illness: Using Viatical and Other Life Insurance Options

When there is terminal illness everything suffers. Finances can become a day to day worry eclipsing more important matters.

Commonsense things which may help include

Making a budget and sticking to it
Buying generic brands when possible
Selling off luxury items no longer needed
Living frugally
Taking in a boarder or moving in with family

Other less common measures might include mortgaging or reverse mortgaging your home, enrolling into a prescription drug or patient assistance program.

Viatical and other Life Insurance Options

Most life insurance policies have provisions which can be used to create cash in times of need. Some are in the realm of the insurance company which issued the policy. Cash Value and Accelerated Death Benefits are two of these. Others can be realized only by selling the policy to an investor for the potential value of the death benefit. These are known as Viatical or Life Settlements.

Viatical Settlements were devised in the 1990's as a way to help AIDS patients pay for the high cost of drug therapies and other medical expenses. The amounts vary but usually range between 65 and 75 percent of the face value. Your financial advisor, insurance agent, viatical or life settlement broker can help you find an investment company to buy your policy.

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Life Settlements are similar to viaticals. Also known as Senior Settlements, these do not require the insured to be terminally ill. Anyone age 65 or older may use their life insurance policy for this. A good option for a spouse to use to help meet the financial needs brought on by the terminal illness of a loved one.

Accelerated Death Benefits are provided by most life insurance companies as an alternative to Viaticals. Usually these can be processed quicker than a viatical. You should ask your insurance agent about this even if it is not mentioned in the policy.

Cash Values of life insurance can be accessed by loans or withdrawals. These are usually much smaller than the other three options mentioned above. The advantage being the policy stays in force leaving money for the beneficiaries.