Posted on | May 1, 2013 | 6 Comments
Receiving the news that you, or a loved one, has been diagnosed as “terminally ill” with a short life expectancy remaining deals a blow that is emotionally devastating. Furthermore, it can be financially devastating, especially if you or your loved one doesn’t currently possess the life insurance that would secure other loved ones when the time comes.
Unfortunately, traditional forms of life insurance, with typical month-to-month premiums, isn’t going to be available, but that doesn’t mean that there aren’t other options; it isn’t hopeless.
Find a Specialized Insurance Agent
First things first—find an insurance agent who specializes in terminally ill cases and thoroughly vet them! The importance of this can’t be stressed enough; crooked agents will take advantage of these sensitive situations, so it’s important to thoroughly vet both the agency and the agent you’re working with. Read all of the fine print and do not sign anything without cross-checking all matters with both a lawyer and the issuing agency. You can find out more at Suncorp Life Insurance Cover.
Once you have an agent that you can trust, let them outline all of your options and thoroughly explain them to you in detail.
Life Insurance Options to Consider
- Graded Whole Term Policy—Some insurance companies offer “graded policies” which are essentially whole terms policies with a few conditions attached. A predetermined amount of time will be attached to the policy (typically 2 years) and if you die within that period of time, your beneficiary will receive only a percentage of the death benefits, plus the premiums already paid. If you die after the predetermined time period, the beneficiary will receive full death benefits. Furthermore, these policies will sometimes have a cap on the amount of coverage they’ll provide, which is determined by the amount of time the insured has left to live.
- Limited Payment Life Insurance—In this case, premiums are very expensive as they’re compensating for a shorter amount of time that payments will be made. Usually, it is established in advance the number of months payments can be expected and the rest of the policy is determined around this number.
- Single Premium Policy—For those able to make a substantial single premium payment, this is an option to consider. Rates and stipulations vary from insurance company to insurance company, but typically you can expect to pay a lump sum of $20,000 for every $100,000 you want in coverage, with some time period provisions attached. Follow this link to read more.
- Mortgage Life Insurance Policy—If your primary concern is that your loved ones not be left with a hefty mortgage payment, then this policy might be of interest. In this case, the beneficiary isn’t your loved ones, but the bank; which will be paid the full amount of mortgage upon your death.
- Employment-Based Life Insurance—It’s always a good idea to contact your employer to see what kind of insurance they might offer in this situation. In most cases, a physical won’t be required, but your beneficiary won’t receive a substantial amount. Typically, death benefits will only go up to two times your annual salary. Those who chose this option often won’t outright quit their job due to their illness, but will instead take a leave of absence and continue paying insurance premiums to take advantage of this opportunity.