Cancer changes the lives of millions of people. In addition to the obvious physical and emotional hardships, a cancer diagnosis can cause many to suffer financial hardship. Typically, those with more deadly forms of and late-stage cancer suffer more substantially from the financial challenges that accompany a cancer diagnosis. In one study, researchers found 7.7% of those diagnosed with lung cancer (the deadliest form of cancer) filed for bankruptcy within five years of being diagnosed.
The most likely place for late-stage cancer patients turn to when looking for financial assistance for cancer is current assets. Unfortunately, a large number of people do not have meaningful “rainy day” funds to allow them to use current savings to fund cancer treatment and other daily living expenses. To the extent patients have savings available, often their savings is quickly depleted and is often difficult to replenish.
Another asset that may be helpful can be a cancer patient’s home. For many homeowners, it can be a source of significant cash, but accessing this value can be time consuming and more difficult when a family’s income is reduced by the inability to continue earning at the same level as prior to the cancer diagnosis.
For those late-stage cancer patients with a life insurance policy, there are a number of other potential options to help meet financial needs, such as a life insurance loan. Policy owners with built up cash value may take a life insurance loan or a withdrawal against that cash value from the insurer that issued the policy. Unfortunately, the vast majority of life insurance policy owners do not have significant, if any, cash value accumulated in their policies.
Access Funds from Your Life Insurance Policy
A second less traditional option for a policy owner to access value in their life insurance policy is a non-recourse loan secured solely by the policy’s death benefit. For example, Fifth Season Financial offers its Funds for Living Program to late-stage cancer patients, whereby qualifying insureds can obtain a loan for up to as much as 70 percent of the policy’s death benefit. As a non-recourse loan, the borrower has no obligation to make any loan payments or premium payments during the insured’s lifetime and the loan is repaid by the insurance company out of the policy’s death benefit at the time of the insured’s death.
The Funds for Living Program has been specifically designed to address the financial needs of late-stage cancer patients. It offers the following advantages over other options discussed above, including:
- there is no need to exhaust current assets,
- there is no restriction of the use of loan proceeds,
- there are no credit-based, needs-based or age qualifications,
- the loans are available for most insurance policies,
- the policy beneficiary still receives the residual death benefit after the loan is repaid and
- the transaction process is generally simpler and quicker.
To many, the financial challenges that accompany a late-stage cancer diagnosis can be as crippling as the disease itself. Knowing that there may be financial relief available for those in this unfortunate situation can sometimes provide the peace of mind needed to live a better quality of life. As medical bills pile up from the costs of treatments and medications, people start to worry about the costs and how it not only affects them, but their family as well. Using life insurance as an asset can help take the financial worry away and be part of the answer that allows individuals to focus on quality of life and enjoying time with family.