Understanding Term Life Insurance For The Terminally Ill

If you have been diagnosed with a terminal illness and need money to pay medical bills, your life insurance policy may offer you quick access to funds through accelerated death benefits, also known as terminal life insurance.



Terminal life insurance is not a separate life insurance product that can be purchased independently. It is a form of life insurance that is combined into a regular life insurance policy. This type of combined life insurance offers accelerated death benefits to those diagnosed with a terminal illness and expected to die within 12 months, according to a written statement from a physician who specializes in that specific area of illness.



What You Need to Do



Getting accelerated death benefits is a simple process. Call up your life insurance agent or the life insurance company directly and ask how you need to go about getting an advanced payment on your death benefits. Ask them to send you a list of relevant documents that are needed and how quickly the whole process can be expedited.



Each company has its own limits as to how much advanced benefits you can receive. Most companies will issue between 50 to 70 percent of the face value either as one lump sum or in installments.



The money you receive from accelerated death benefits can be used to pay off your current medical bills or any treatment that your medical insurance does not cover. You can also take a vacation with that money or distribute it as you want to. Policyholders get peace of mind knowing that money has been personally disbursed according to their wishes while they are alive. Alternatively, any amount of money left over, after paying your medical costs, can be left to your beneficiaries through your last Will and Testament.



What if you have a terminal illness and do not have any life insurance coverage?



Many people consider life insurance only when they think they may die soon. Being diagnosed with a terminal illness is definitely a wake-up call to tie up loose ends and get your finances in order. However, there are not as many life insurance options open to you at this time and the ones that are available come with a pretty price but if you or someone you know is terminally ill and is looking for life insurance it is completely possible to find a life insurance policy despite having a terminal illness.



While it is true that most life insurance companies will not offer coverage to those who have already been diagnosed with a terminal illness, there are possibilities of getting coverage through life insurance companies who specialize in terminal illnesses. These are called graded life insurance policies and are obviously more expensive than the traditional type of life insurance policies. The maximum amount of coverage you can receive is $50,000. Stipulations within a graded policy require you to stay alive for at least two years after the policy has been issued in order to receive benefits. If you die within two years, your beneficiaries will only receive a refund of the premiums paid to date. For a terminally ill patient, two years may be a long time to wait for an amount to come through, but there are cases where such a policy has been extremely beneficial for the policyholder and therefore, worth considering.



Final expense life insurance is also an option for those who do not want to burden their loved ones with funeral expenses after they die. This type of policy does not require you to go through a medical examination and typically provides enough coverage to pay for funeral expenses.



Selling an Existing Life Insurance Policy



A last option to get the cash you need would be to sell your life insurance policy to a third party through a viatical settlement funding company. You can receive 40 to 85 percent of the face value of your policy straightaway. But you need to go about this through the right channels to ensure safety and security. The money you receive from this type of settlement is free from income tax if your life expectancy is 24 months or less. Because of the rising popularity of viatical settlements, many life insurance companies are now offering accelerated death benefits to those who have one year or less to live, even if your policy was not originally combined with terminal life insurance.



Conclusion



The best way to plan for terminal illness is to get a life insurance policy when you are still young and healthy. This not only gets you the best life insurance rates but it also provides protection against an illness that may develop later on in your life and render you uninsurable. Having a policy would also entitle you to get accelerated death benefits if you are diagnosed with a terminal illness.



But even if you do not have a policy, you can still find coverage through life insurance companies who specialize in terminal illnesses. Getting free life insurance quotes through aggregator life insurance websites that hold thousands of life insurance policies in their databases may be the easiest way to locate such policies.



About AccuQuote:



AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.