Is it Legal to Sell a Life Insurance Policy as Funding For Cancer Patients?
Finding funding for cancer patients can be challenging, but one option you may have heard about is selling your life insurance policy. Wondering if that’s legal? The short answer is yes. It is legal to sell your life insurance policy. But to help you understand how it works, here’s a look at the specifics.
The History of Viatical Settlements as Funding for Cancer Patients
When you sell your life insurance policy to get funding for cancer patients, it is called a viatical settlement. Although many people are just hearing about these settlements for the first time, they have actually been around in some form for over 100 years. In fact, selling life insurance policies were declared to be legal during a 1911 Supreme Court case.
At that time, however, life insurance was relatively rare. Over the next 80 years, life insurance policies became increasingly popular. In the 1980s, the viatical settlement industry was born during the AIDS crisis. Patients who were facing death and in need of extensive medical care sold their policies so that they could afford treatment and living expenses. Now, however, AIDS and HIV treatment has improved. Most people with these conditions are able to live long and healthy lives. As a result, the industry has shifted to help people who need funding for funding for cancer patients.
The Case of Grigsby V. Russell
In the 1911 case of Grigsby v Russell, Dr. Grigsby offered to accept his patient’s life insurance policy in lieu of payment. The patient, John C. Burchard agreed and handed over the policy to the doctor. In exchange for the ability to redeem the policy after the patient’s death, the doctor agreed to make the monthly payments on the plan.
However, after Burchard’s death, the executor of his estate (Russell) claimed that the doctor didn’t have a right to the insurance policy. The case went all the way to the Supreme Court, and the court ruled that the arrangement was absolutely fine from a legal perspective.
Justice Oliver Wendell Holmes delivered the decision in this case, and he stated that life insurance is an asset. When you own an asset, you have the right to sell it as you see fit, and that right extends to life insurance.
Senior’s Right To Know
Collectively American seniors own approximately 38 million life insurance policies. Together, these plans have a face value of over $3 trillion. Every year, seniors let life insurance policies worth a combined total of $100 billion expire. Usually, seniors make this choice because they can’t afford the premiums. They don’t know selling their life insurance or a viatical settlement is an option. Often, this happens because insurance agents don’t tell seniors about the true value of their policies. Senior Right to Know laws helps to prevent this from happening.
Many people know that they build up equity in their whole life insurance plans, but they aren’t aware that their term and universal plans may also have cash value besides the death benefit. In fact, throughout the insurance industry, there are widespread issues because agents don’t talk with their senior clients about the value of their plans. In some cases, when agents have informed seniors about viatical settlement as an option, they have lost their jobs.
Remember, insurance companies make more when someone just surrenders their plan, after decades of paying the premiums than they do when they have to pay out on a plan. As a result, it’s in the insurance companies best interest for people to be uninformed and never cash in on their policies.
To protect seniors from this type of activity, several states have passed or are considering Right to Know laws. These laws address a senior’s right to know the truth about their insurance and its value. In particular, seniors deserve to know how they can sell their policies for cash settlements through a viatical settlement company.
State Laws and Regulations About Life Insurance
Senior Right to Know laws varies from state to state. Florida has some of the most advanced laws on the books, and this state requires insurance companies to advise seniors to consult with an advisor before making changes to their life insurance plans.
In Oregon, insurers must let seniors know about reverse life insurance options. This option is where you take cash from your policy instead of letting it lapse. Texas uses public funds to educate citizens about Medicaid Life Settlement. Primarily so they can use the funds from their life insurance policies to pay for long term healthcare costs rather than getting on state Medicaid plans.
Depending on where you live, you may have other laws on the books protecting you from insurance companies and unscrupulous agents. You can learn more about the Senior Right to Know laws in your state by doing an internet search, talking with a financial advisor, or checking out state government websites. If you’re curious about the value of your life insurance policy, you can contact your insurance agent or a third party such as a viatical settlement company that buys life insurance policies.
Additional Information About Viatical Settlements
Many patients choose a viatical settlement over other forms of financial assistance because they can receive a larger sum of money, sometimes up to 70% of the value of their life insurance policy. There are also no restrictions on how you can use this money. It can be applied to medical bills as well as ordinary living expenses such as rent or utilities, or even to fund a vacation with family and friends.
If you or a loved one has been diagnosed with cancer, you’re likely facing large cancer-related expenses. To help offset your costs, you may want to look into using a viatical settlement as funding for cancer patients. To instantly see if you qualify, fill out our simple online form or call us today at 877-959-5855.