Facing a terminal illness is an incredibly personal journey, and planning for the future can feel overwhelming. During this time, knowing that your life insurance policy may offer financial support can provide some relief.
Many insurance companies offer options that allow individuals to access a portion of their death benefit while still living. This can help ease medical bills, support your loved ones, or provide flexibility to make the most of the time ahead.
How to Access Life Insurance Benefits for a Terminal Illness
If you have an existing life insurance policy, you may be able to receive a lump sum payment through an accelerated death benefit rider. This allows individuals diagnosed with a terminal illness to access a portion of their death benefit early, helping to cover medical bills, daily expenses, or provide financial peace of mind.
Not all life insurance companies automatically include this option, so it’s important to review your policy or speak with your insurance company to understand what benefits are available.
Making the Most of Your Life Insurance Payout
Once you’ve confirmed eligibility for an accelerated death benefit rider or other financial options, planning how to use these funds can make a meaningful difference. Many individuals choose to:
- Pay medical bills – Reduce out-of-pocket expenses for treatments, medications, or in-home care.
- Support loved ones – Provide financial stability for family members during a difficult time.
- Eliminate debt – Settle outstanding loans or mortgage payments to ease financial strain.
- Improve quality of life – Use the money to make meaningful memories, whether through travel, time with loved ones, or personal goals.
If your life insurance company does not offer early access to benefits, a viatical settlement may be an alternative, allowing you to sell your policy for a lump sum payment based on your age, diagnosis, and policy value.
Viatical Settlements: An Alternative Option
If your life insurance company does not offer an accelerated death benefit rider, or if the payout is limited, a viatical settlement may provide another way to access the value of your policy.
A viatical settlement allows individuals diagnosed with a life threatening illness to sell their life insurance policy to a third-party company in exchange for a lump sum payment. This payout is often higher than what an insurance company would offer through an early withdrawal of benefits. Unlike a loan, a viatical settlement does not require repayment, and the money can be used however you choose – whether to cover medical expenses, provide for loved ones, or ease financial stress.
How Does a Viatical Settlement Work?
The process of securing a viatical settlement is straightforward:
- Policy Review – A viatical settlement provider assesses your life insurance policy, considering factors like age, diagnosis, and policy value.
- Offer & Payout – If you qualify, the company offers a lump sum payment based on your policy’s worth.
- Payment & Policy Transfer – Once the settlement is complete, ownership of the life insurance policy transfers to the settlement provider, who takes over premium payments.
Who Qualifies for a Viatical Settlement?
Most people who seek a viatical settlement have a serious illness, such as cancer, ALS, organ failure, or another life-threatening condition. The amount you receive depends on factors such as your age, health status, and the death benefit of your policy.
At American Life Fund, we specialize in helping individuals through this process with compassion and transparency. If you’re considering a viatical settlement, our team is here to answer your questions and help you determine if this option is right for you.
Next Steps: Finding the Right Option for You
If you’re exploring ways to access the value of your life insurance policy during a terminal illness, reviewing your options is the best place to start.
Every situation is unique, and making the right financial decision depends on your personal circumstances, goals, and the needs of your loved ones. At American Life Fund, we specialize in helping individuals with a life threatening illness review their financial options, offering personalized guidance on whether a viatical settlement is right for you.
If you’re considering selling your life insurance policy, our team is here to help. Contact American Life Fund today to learn how we can provide the financial resources you need.
