The following is a guest post.
Unfortunately, the life insurance options that a terminally ill patient is going to be afforded will not be any of the traditional sort. Standard month-to-month premiums on a policy with longevity isn’t something that an insurance company will hand out when the time period over which premiums will be paid is likely to be short.
However, there are a few non-traditional options that can be obtained; especially if you seek out the council of a certified life insurance agent who specializes specifically in terminally ill cases. These specialists will provide invaluable insider’s knowledge on what options are available, with all of the need-to-know details.
Some of these options will include the following:
This is a whole term policy that has several conditions for death benefits to be claimed and paid out to your beneficiary; these conditions will vary from insurer to insurer, so be sure that you utilize your specialist when shopping around.
Typically, an insurer will set a predetermined time period that must be surpassed for a full death benefit payout to occur. In most cases, this time period is 2 years. If you die within the designated time period, then the payout will be minimal—usually, the beneficiary will only receive the premiums you’ve paid, and in some cases, a percentage of the total death benefits. For example, a $100,000 policy may only payout $3,000 in death benefits plus your premiums.
However, if you die after the designated time period, your beneficiary will receive a full death benefit payout from the policy.
These policies can definitely be a good way to go, but it’s still important to consider all options, especially if you have a very limited life expectancy. If this expectancy is very short, a significant cap might be place on the amount of coverage you can obtain—sometimes it can be as little as $10,000, which might only cover funeral costs.
LIMITED PAYMENT POLICIES
These policies compensate for the short period of time they will be active by charging expensive premiums. Usually, the insurer will take into consideration your total life expectancy and dictate an expected amount of months to receive payments. Total coverage and premiums will be calculated based off of this expected time period.
SINGLE PREMIUM POLICIES
Some insurers offer the option to make one huge lump sum payment in exchange for a certain amount of coverage, annually. Typically, these policies aren’t usually recommended; if you can afford to put such a large amount into a policy like this, then it might be a better idea to invest it into a trust, or some other investment opportunity that will benefit your loved ones. This largely depends on what coverage is available and what stipulations the insurer dictates for receiving a payout.
BE DILIGENT… BE PREPARED!
The best option for you is going to largely depend on your own diligence, as well as the due diligence of a life insurance agent that you can trust. Shop around, fully understand your options, and if you should find no luck with obtaining coverage, seek out the guidance of a financial expert for even more investment options. Above all, don’t lose hope!