Important Facts

3 Ways to Utilize Your Life Insurance Policy for Terminal Illness

There are many good reasons for having life insurance. Not only can it help protect the people you love from suffering financial hardship after you're gone, but it may also provide you with options that allow you to use a portion of your policy's death benefit should you become terminally ill. Moreover, you may still have the option to buy larger amounts of insurance as your need for coverage increases.

If you or someone you love is facing a terminal illness or serious disability, the following are three things you may be able to do with your life insurance policy:

1. Access Your Benefits with an Accelerated Death Benefit Rider

If your policy includes an accelerated death benefit rider, this feature can allow you to receive a portion of your policy's benefits in advance of your death. This can be helpful if you need money to cover medical expenses, other short or long-term care needs. To claim benefits early, the rider must be included in your policy and you must qualify for coverage according to your individual life insurance contract.

2. Take Out a Policy Loan

If your policy doesn't have an accelerated benefit rider and you want to access the cash value in your permanent life insurance policy, contact your agent or company representative to see if you can take a loan against your policy. While a policy loan can be an option for getting the cash you need while you are still alive, borrowing against your policy will reduce your death benefit if left unpaid, leaving your loved ones with less cash than you may have wanted. Like any other loan, a policy loan will also accrue interest.

3. Buy Additional Coverage with Your Guaranteed Insurability Rider

If at the time of your life insurance application you opted to buy a guaranteed insurability rider, you may be able to buy additional coverage to protect your loved ones - despite being diagnosed with a terminal illness. Also known as a guaranteed purchase option or future increase option rider, the guaranteed insurability rider essentially allows you to buy more life insurance without having to undergo the underwriting process in order to qualify for more coverage. Keep in mind that most policies generally only allow you to exercise this option at certain intervals - such as at your policy anniversary date or every five or 10 years. Check with your agent or company representative to learn more about your options.

To read more about being better prepared when a serious illness or disability strikes, visit the Protective Learning Center.

Was this article helpful?
3
2

For more information, visit the Protective Life Learning Center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

WEB.876312.04.18