Before you cancel life insurance to make room in the budget for pancreatic cancer care, find out whether the policy has money you can use during treatment.
For U.S. policyholders, an existing life insurance policy may provide money through an accelerated death benefit, access to cash value, or a life or viatical settlement.
Treatment Costs and Household Bills
Ask the cancer center for an estimate of your share of treatment costs. Include medicines taken at home. The Pancreatic Cancer Action Network explains that some patients need prescription enzymes to help digest food. If these are part of your care, include their ongoing cost in the budget.
Allow for travel, help at home, and missed work, too. Your cancer center’s financial navigator or social worker can help you find assistance. That may reduce how much money you need from the policy.
The type and stage of pancreatic cancer also matter. The National Cancer Institute cautions that survival statistics cannot predict an individual’s outcome. Your oncology team can discuss your prognosis; the diagnosis alone doesn’t establish eligibility for an insurance advance or sale.
Check the Benefits Already in Your Policy
An accelerated death benefit lets you receive money from the death benefit while you are living, if you meet the policy’s illness requirements. Your insurance company pays it, reducing the amount left for your beneficiaries. Beneficiaries are the people named to receive the policy’s payout.
Look for a rider, an additional provision in the contract, describing this benefit. Requirements vary. Nationwide, for example, describes an accelerated death benefit rider that applies when life expectancy is 12 months or less. Check your own contract’s requirements and ask what medical documentation the insurer needs.
Get the payment amount after deductions in writing. Ask how much coverage would remain and whether you would still owe premiums.
With whole life or universal life, you may also have cash value to borrow against or withdraw. Guardian cautions that unpaid loans and interest reduce the death benefit; a growing balance can put the policy at risk. Before borrowing or withdrawing cash, have the insurer explain the effect on future premiums and coverage. Surrendering the policy ends coverage in return for its available cash surrender value.
Selling a Policy During a Serious Illness
A viatical settlement is a way to sell an existing policy when the insured person has a terminal or qualifying chronic illness. The buyer pays a lump sum and takes responsibility for future premiums. In a full sale, the buyer collects the death benefit after the insured person dies, leaving none for the original beneficiaries.
Some sales let your family keep part of that benefit. When reviewing how a viatical settlement works, ask how retaining coverage changes the offer.
Buyers examine the policy and, with your authorization, medical records. The amount of coverage, premiums, and estimated life expectancy affect pricing. A pancreatic cancer diagnosis doesn’t guarantee an offer.
New Jersey’s Department of Banking and Insurance recommends comparing buyers’ bids with options available through the insurer in its consumer guidance on life settlements.
Seniors who don’t meet terminal-illness requirements may still qualify for a life settlement, depending on health and coverage.
Check the Conversion Deadline on Term Insurance
Term insurance usually has no cash value, though it may offer an accelerated death benefit. Guardian explains that a conversion option can let you switch to permanent insurance without another medical exam. The right to convert can end even while your term coverage is still active. Get the conversion deadline and the cost of the available permanent coverage from the insurer.
For a possible settlement, have the policy reviewed before paying to convert it. The higher premiums on the new policy affect whether a buyer will make an offer. Tell the reviewer if the conversion deadline has already passed.
What Your Family Would Keep
If your spouse expects to use the death benefit for household bills, work out how much protection you can afford to give up. An advance or a small policy loan may cover the care expenses while leaving some insurance in place.
For each option, get a written figure for the cash you’d receive after fees and any loan balance. Put the remaining death benefit and any premiums you’d still owe alongside it. Before choosing, find out what paperwork is required and when you could expect the money.
Firms such as Citizens Life Group gather bids from several institutional buyers. Compare those written offers with the insurer’s figures, and check whether the amount quoted is a firm offer or an estimate that could change. Individual results vary.
Once you take an accelerated death benefit, a buyer has less coverage to purchase and may change the offer. If time allows, compare a sale with the insurer’s terms before accepting an advance. If you have already received one, give the reviewer the updated policy figures.
Before accepting payment, talk to a qualified tax professional. If you receive Medicaid or other assistance tied to income or assets, ask a benefits counselor how the money might affect your benefits.
Before You Call
Pull out the policy and its riders, along with the latest statement, loan balance, and premium notice. If you’d like help sorting the papers or making calls, a family member can join you. Before agreeing to share medical records for a settlement review, ask who will see them and how they’ll be used. Ask the insurer what authorization it needs before discussing the policy with someone else.
Keep required premiums current while the options are being reviewed. If a payment is already overdue, tell the insurer and the person evaluating the policy.
